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Who Counts?

While Return On Customer provides a metric-based approach to determining the lifetime value of customers and so can be read with great interest by those for whom “running the numbers” is a way of work, the book has tremendous value for those product developers and marketers who are right-brain-oriented.

While Return On Customer provides a metric-based approach to determining the lifetime value of customers and so can be read with great interest by those for whom “running the numbers” is a way of work, the book has tremendous value for those product developers and marketers who are right-brain-oriented. The authors, who made their mark with one-to-one marketing, are still promoting the singular approach (“But today’s market segmentation analyses have become so sophisticated, you can easily be lulled into thinking you understand your ‘customers,’ when what you really want is to understand each customer”); in this case, however, one that is focused on understanding whether there is actual gain from serving particular customers. Let’s face it: Over a given period of time there is a difference in the amounts of investments made by customers in product category, whether we are talking about OEM parts or finished vehicles. Simply put: Some customers are more valuable than others, and by understanding the difference, resources can be more valuably deployed—you can get a better return on your investment.

“If customers are your scarcest resource”—and Peppers and Rogers do a compelling job of arguing it is indeed so, regardless of your business—“then the more value you can create from each one, the more your business will be worth.” And the only way you can create what your customers (current or potential) actually want is by fully understanding their needs, not your company’s desires.—GSV

Return On Customer: Creating Maximum Value from Your Scarcest Resource By Don Peppers and Martha Rogers Currency Doubleday $24.95