marketing strategy consultants | direct marketing consulting | customer lead generation | business intelligence management | client database management | direct mail marketing companies

	Sometimes we’ll get an answer that contains the number of active customers, average lifetime spend, average purchase and the like. But by far the most common response is what we call the ‘creative brief profile’. It goes something like this: “Our customer is a married woman between the ages of 24 and 35, college educated, with young children; a household income of $55k to $75k; yadda, yadda, yadda…” The fact is, both of these admittedly simple conceptualizations of your customer base are inherently and grossly inaccurate rendering any targeting efforts based on them flawed from the outset. This isn’t my opinion. This is scientific fact. The problem is that both presume — inaccurately — that your customer base is essentially homogeneous. That presumption is akin to characterizing the U.S. population by some average of our demographic characteristics — an interesting factoid, perhaps, but of no practical value. The reality is that your customer base is comprised of ‘clusters’ of customers that each share a complex set of characteristics that statistically distinguishes one from the next. These clusters occur in varied sizes and ‘shapes’. Further, the set of characteristics that define each cluster may or may not contain the same elements (age, income, etc.). Oh, and to keep things interesting, they change over time. Not only are the clusters different, they also have differing ‘values’ as customers. We all wish things were simpler but alas, they're not. Sorry. There is a related ‘universal truth’ about customers called the 80/20 Rule. (we cover this in greater depth here) What the 80/20 Rule says, among other things, is that approximately 20% of your customers supply 80% of your revenue. A suprisingly small part of your customers are responsible for the majority of your business. The corollary also holds: the majority of your customers produce only a small part of your business. <back> <next>

Sometimes we’ll get an answer that contains the number of active customers, average lifetime spend, average purchase and the like. But by far the most common response is what we call the ‘creative brief profile’. It goes something like this: “Our customer is a married woman between the ages of 24 and 35, college educated, with young children; a household income of $55k to $75k; yadda, yadda, yadda…”

The fact is, both of these admittedly simple conceptualizations of your customer base are inherently and grossly inaccurate rendering any targeting efforts based on them flawed from the outset. This isn’t my opinion. This is scientific fact. The problem is that both presume — inaccurately — that your customer base is essentially homogeneous. That presumption is akin to characterizing the U.S. population by some average of our demographic characteristics — an interesting factoid, perhaps, but of no practical value.

The reality is that your customer base is comprised of ‘clusters’ of customers that each share a complex set of characteristics that statistically distinguishes one from the next. These clusters occur in varied sizes and ‘shapes’. Further, the set of characteristics that define each cluster may or may not contain the same elements (age, income, etc.). Oh, and to keep things interesting, they change over time. Not only are the clusters different, they also have differing ‘values’ as customers. We all wish things were simpler but alas, they're not. Sorry.

There is a related ‘universal truth’ about customers called the 80/20 Rule. (we cover this in greater depth here) What the 80/20 Rule says, among other things, is that approximately 20% of your customers supply 80% of your revenue. A suprisingly small part of your customers are responsible for the majority of your business. The corollary also holds: the majority of your customers produce only a small part of your business.

<back> <next>