Optimizing around the Customer: Measuring the Success of Customer-Based Initiatives
We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.
Traditional marketing measures such as response rates, cost per 1,000, gross ratings points, and awareness levels help a company understand how successful a campaign has been or how successful or efficient a particular message is, on average, in reaching a target market. But when using interactive technologies and dealing with customers one at a time, the key task most marketers face is how to optimize the enterprise’s behavior around individual customers rather than products. Optimizing the enterprise around a customer is the problem confronted whenever a firm is trying to decide how to design a Web site, how to define objectives and scripts for a contact center, or how to frame the selling strategy for a face-to-face meeting with a customer. The question being asked in these situations isn’t, What’s the best overall message for this particular product, when talking to everyone? but What’s the best message for this particular customer, during this particular interaction? As we learned in the chapters on Identify-Differentiate-Interact-Customize (Chapters ...