For example, with life stage indicators there is an opportunity, especially for a bank, to recognize that a poor college student or a hard-strapped person in law school might be very valuable in the near future. The bank may want to treat that person more for potential customer value than current value.
When we think about forward-thinking companies who are predicting what a customer will be worth in the future in addition to what they're worth now, one example we've seen of that in the financial services industry was in Canada. One bank was assigning customer managers to groups of customers and then holding those customer managers accountable at the end of the quarter for two things simultaneously. First, how much was the customer worth this past quarter: How much money has the bank made from this customer? And at the same time: How much will that customer be worth to the bank over the next three years? That is a very important measure because it means that no customer relationship manager at the bank is ever going to be tempted to do something that wins a lot of business in the short term but isn't really good for building trust or customer relationships in the long term. We have seen several other companies starting to follow suit and thinking in terms of how much a customer is worth today and how much that same customer will be worth in the future. This also creates the possibility of measuring the value of customers we don't even have yet.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.
This was first published in January 2008