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Could your best customer spend no money with you?

by Michael Maoz  |  November 3, 2010  |  4 Comments

I’m on the road with clients in the final stretches of the year, working on 2011 strategies and investments and technology selection. Another day, another city, another delay – but it is fantastic being in work environments observing how workers do their jobs and listening to how customers interact.  And once in a while you hear a new thought. Here is one I just went through with a client: in the not-to-distant future, they may use the customer’s Social Graph to determine the customer strategy, more than they will use current and lifetime value or share of wallet.

Could ‘well connected’ be the new ‘rich?’ The client was modelling their findings that, if they were able to graph the customer’s set of connections, and then track the purchases of those connections, and the delta change of those connections, then they could determine customer ‘value’ as a function of the degree to which they impacted sales.

So: are you ready to shift your emphasis just a tiny bit, away from the high-roller who spends a lot but brings no one else in their wake, and over to the lower-spender who is attached to a bevy of buyers? This would take careful measurement, plotting, modelling, and business rules – and can it actually be done? Once the social graph is in place, would you be sure of the accuracy of the weightings of each ‘node’ or ‘customer’ to the extent that you would be sure that you knew who was influencing whom?

Regardless of how this plays out, it does demonstrate that we are on the cusp of a new way of thinking about business relationships and the design of customer processes.

This social network thing – you just never know where it is going next.

Category: crm  customer-centric-web  leadership  sales-force-automation  sfa  social-crm  social-networking  social-software  strategic-planning  

Michael Maoz
VP Distinguished Analyst
13 years at Gartner
26 years IT industry

Michael Maoz is a research vice president and distinguished analyst in Gartner Research. His research focuses on CRM and customer-centric Web strategies. Mr. Maoz is the research leader for both the customer service and support strategies area and customer-centric Web… Read Full Bio

Thoughts on Could your best customer spend no money with you?

  1. James Dixon says:

    Hi Michael,

    This is very interesting.

    I blogged earlier this week about comparing open source and proprietary software companies where a similar situation exists. For a commercial open source company the pool of people using the community edition are very important. They help with the viral distribution of the software to new organizations (some of whom become customers), and also impact the market. Measuring these effects isn’t easy.

    James Dixon, Chief Geek, Pentaho

  2. The question is especially relevant for those involved in Open Source software.

  3. Rob Cheng says:

    Isn’t this just Avon/Tupperware/Herbalife’s business model, with better analytics?

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