Big Data

Who are my Most Important Customers?

Bill Schmarzo By Bill Schmarzo Chief Technology Officer, "Dean of Big Data" September 19, 2011

I was recently running a customer workshop on how big data and advanced analytics could power some of their key business initiatives. One of the participants, from the business side of the organization, looked at me and said that she only needed to answer three simple questions:

• Who are my most valuable customers?
• What are my most important products?
• What are my most successful campaigns?

The more I thought about these “simple” questions, the more I realized just how “not simple” these questions really were. Because of the new insights available from these new big data sources, companies are able to take these types of “simple” questions to the next level of sophistication and understanding.

Let’s look at the most valuable customer question. When we ask who are our most valuable customers, do we mean largest by revenue (which is how many companies today still define their most valuable customers)? Or do we mean the most profitable customers, contemplating more aspects of the customer engagement including marketing and sales costs, cost to service, returns and payment terms (which is how some of the more advanced companies think today)? Or by adding social media into the mix, do we now mean our most influential customers, and the value associated with their circle of friends?

Companies are learning that their most profitable customers may not actually be their most valuable customers because of the net influencer effect that they have on a larger community of customers, and the profitability of the “baskets” associated with that community of customers. Same with the most important product question, which retailers have understood for quite a while now (think loss leaders like milk that drive store traffic even though they don’t drive much in the form of profits), and consumer good manufacturers understand as well (think category strategies and the use of flanking products to protect their premium-priced core products).

Those nebulous and hard to define words like valuable, important and successful allow the business users to move beyond just financial measures, and to consider the entirety of the contributions those customers, products and campaigns make to the business. It is the basis for a more engaging business discussion about what data sources could be valuable in defining “valuable” and what analytic models could be used to quantify “valuable.” It’s the basis for a wonderful conversion that we can have with our clients about defining those valuable, important and successful words in light of what big data and advanced analytics can bring to the table.

The business opportunity embedded in big data analytics is extensive and it is imperative that organizations recognize its potential. This week, I will further touch upon big data analytics and its advantages in my speaking session titled “Do it Right – Proven Techniques for Exploiting Big Data Analytics” at the Strata Conference in New York City, Thursday September 22nd at 4:10pm.

Bill Schmarzo

About Bill Schmarzo


Chief Technology Officer, "Dean of Big Data"

The moniker “Dean of Big Data” may have been applied in a light-hearted spirit, but Bill’s expertise around data analytics is no joke. After being deeply immersed in the world of big data for over 20 years, he shows no signs of coming up for air. Bill speaks frequently on the use of big data, with an engaging style that has gained him many accolades. He’s presented most recently at STRATA, The Data Science Summit and TDWI, and has written several white papers and articles about the application of big data and advanced analytics to drive an organization’s key business initiatives. Prior to joining Consulting as part of EMC Global Services, Bill co-authored with Ralph Kimball a series of articles on analytic applications, and was on the faculty of TDWI teaching a course on designing analytic applications. Bill created the EMC Big Data Vision Workshop methodology that links an organization’s strategic business initiatives with supporting data and analytic requirements, and thus helps organizations wrap their heads around this complex subject. Bill sets the strategy and defines offerings and capabilities for the Enterprise Information Management and Analytics within EMC Consulting, Global Services. Prior to this, he was the Vice President of Advertiser Analytics at Yahoo at the dawn of the online Big Data revolution. Bill is the author of "Big Data: Understanding How Data Powers Big Business" published by Wiley.

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0 thoughts on “Who are my Most Important Customers?

  1. It will be a wonderful thing when companies in general embrace the concept of ‘most important customers’ as you describe it — it is so important to look beyond current ‘value’ (ie, revenue, or even profit) and include the less tangible elements such as the ones you describe, as well as future potential and opportunities for meaningful collaborations. Properly defining ‘most important’ will help companies allocate resources to build advantages in the right places.