Customer Option Value: Counting the Apples In a Seed

“Ken Kesey, the celebrated author of One Flew Over the Cuckoo’s Nest, once remarked: ‘You can count the number of seeds in an apple, but you can’t count the number of apples in a seed.’ Kesey’s words resonate strongly in the context of customer data analytics. In particular, they can be interpreted to mean that a company can determine the current value of its customer base but not the future value of an individual customer. This was true enough in the past. Today, however, the ability to ‘count the number of apples in a seed’ is fast becoming a reality. So, too, for that matter, is the ability to target those ‘seeds,’ or customers, who hold the greatest potential, or option value, with customized messages and offerings through precision marketing campaigns. Determining customer option value means first resolving the problem of isolated data silos. While the problem has received widespread attention in recent years, it continues to plague most large companies. Put simply, it relates to the fact that the blueprint for customer data management in these companies tends to resemble that of a penitentiary. One divider wall is the channel through which a customer makes a purchase. Another divider wall is the business unit, or product division, from which a customer makes a purchase. Yet another divider wall is the channel through which a customer obtains information or resolves a problem. Too often, the data that gets generated behind any one of these walls remains stuck there, confined to data warehouses that never ‘talk’ to one another. The result is a fractured view of the customer relationship.”

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