Customer Value: Do you Know What You’re Worth?
If you’re wondering why you’re not getting great customer service, you might be surprised to discover that it has something to do with a top-secret rating assigned to you by a company or service provider.
Customers get rated all the time and the reality is, not all customers are worth the same. Companies assign a value to their customers called the customer lifetime value (CLV). There are many ways to calculate CLV and many companies and the data analytics firms they hire are very secretive about it. Although it’s not a simple formula, the result is extremely valuable in analyzing and assessing the financial value of each customer.
Once a score is assigned, a company can segment their customers based on their value. Depending on an individual’s CLV, a customer might have a shorter wait time for a customer service agent, an upgrade on an airline or better discounts and perks.
Consumers often don’t realize that they are being ranked, even though this ranking affects their customer experience. Companies are not transparent about the calculation process or the score and there is absolutely no government regulation that oversees this type of customer ranking. Unlike a credit score, a consumer is essentially in the dark about how they are ranked, though they may have an idea based on how they’re treated. Sometimes, customers are wrongly labeled as “cheap” or as a “cheater” and the lack of transparency makes it virtually impossible to do anything about it.
Although this type of “sizing up” of customers is not new business owners have been doing it forever the intricate algorithms perfected by marketing firms use a variety of data to make their calculations. This essentially means that a consumer’s every action is used to determine how valuable they are to their company or service provider.
According to Wharton marketing professor Peter Fader, “Not all customers deserve a company’s best efforts.” This means that preferred customers will get much better service than those with a lower score. When it comes to your phone service, this can be especially frustrating. According to the Wall Street Journal, customers who are valued higher and are at a greater risk of switching to another carrier will get routed quickly to a top customer service agent. Companies like Zeta Global, which use artificial intelligence to help their clients improve marketing efforts, collect mounds of data on consumers. For example, they might know whether a consumer visits the website of a competitor or how many times they’ve called customer service. Based on the data they collect, they can even predict whether a customer is likely to switch carriers. If that customer also has a high CLV, they’ll get flagged to receive faster, better service.
Although analyzing customers and predicting their behavior is an important part of any successful business, this type of top secret (and sometimes inaccurate) ranking can substantially affect a customer’s experience. At Billshark, we don’t play favorites. Every single customer is treated equally because we advocate for ALL consumers. So don’t wait on hold with companies that don’t value your business. Send us your bills, and we’ll lower them.