How much do you know about your customers?

The world of people measurement has never been as advanced as it currently is.  Services like Klout allow us to measure ourselves in terms of our online influence for instance.  In the corporate world Big Data promises to give us more information about consumers than ever before.

Now I should say at this point that the very best companies will have been doing this long before Big Data has arrived as the latest buzzword.  They will have been segmenting their customer base so they are fully aware of their most profitable users, and of course making sure those users are as happy as possible, whilst their less profitable users are given much less attention.

They will have used things like the Net Promoter Score to determine who amongst their customers are most likely to promote the company to their friends and colleagues, and with that information ensure that these influential social connectors are happy and excited by what you’re doing.

So those things aren’t new, but a new form of measuring customer value for e-commerce sites is nonetheless interesting.  It’s called the e-score and it measures our potential value as customers.  It’s interesting because whilst traditionally companies could measure their own customers nicely enough, the e-score lets them measure people that aren’t customers yet.

E-score is measured by a number of start-ups that are specialising in the field of predictive customer analytics.  It basically uses a shed load of data and uses algorithms to make sense of it.

Of course you might say that credit ratings have been around for donkey’s years, but e-scores are a step further on.  They can take into account facts like occupation, salary and home value to spending on luxury goods or pet food, and do it all with algorithms that their creators say accurately predict spending.

Companies can then use this information to both target their marketing more effectively to attract the right kind of customer.  These scores can determine whether someone is pitched a platinum credit card or a plain one, a full-service plan or none at all.

Suffice to say that the potential power of these scores has worried as many people as it has excited, with the clear potential to create a financial underclass on a whole other level to existing credit scores.  What’s more, the values used to create the score are largely secret, so it’s not like people can work to improve their score as they can with a credit rating.

It’s just another sign of the rise of what might be called the Scored Society. Google ranks our search results by our location and search history. Facebook scores us based on our online activities. Klout scores us by how many followers we have on Twitter, among other things.

By: adi gaskell