A High Value Customer, or “Value Customer” is your best customer. The customer who you would cater to exclusively if you could afford to. Your best customer is the customer who spends with recency, frequency and highest monetary value (RFM); do you have an idea who I’m talking about?

Most firms today struggle to quantify their best buyer i.e. their Value Customer, and understand the buyers underlying propensity to make a purchase

Image result for the bob's

All customers are not created equal. This isn’t to say customers should be treated with a different level of quality or customer service. But it does help us determine how we can focus our messaging, our marketing and our sales resources in a particular direction, be it a specific channel, geography, demographic, psycho-graphic or, as academics refer to them: cohort groups. 

Think of the cohort group not as a specific buyer, but as the group of buyers with similar buying behavior patterns

Let’s explore this example:

A customer, Robert, buys two-way “walkie-talkie” radios from my specialty electronics store every year, twice per year. As it turns out, he owns a small contracting business renovating refrigerated warehouses and needs top of the line communications devices. He made his a purchase last week, usually buys every 6 months and spends $15,000 per year for his team (who happen to break a lot of radio headsets). Robert is part of a cohort group I call “the Bob’s”

The Bob’s cohort group buy my radios, bi-annually and own contracting businesses in the USA around $20,000,000 in sales. The Bob’s, compared with “the Lindas” cohort group spend more recently, with much higher frequency. Notice I’m not focused on Robert specifically but I am focused on all of the “Bob’s” who buy from me. I can only determine Bob’s are best for me after reviewing ALL of my top cohort groups.

Do you think I should call on the business owners in the Bob Cohort? Maybe set appointments, ask them what else they need on a regular basis and for a good price, review my best products, buy lunch, get to know, play golf….


Sorry for shouting.

The only way to truly know your customer is to talk to them, illicit feedback and perform analytics measures on transactions and events. 

How will you know which cohort group is the most valuable?

I talk about this in another post, I hope you’ll check it out.

Send me a quick note if you want to better understand your buyers and I’ll point you in the right direction. If I can’t help you I’ll find someone who can.

More resources:


Peter Fader at Wharton (youtube link)


2 Responses

  1. bong99 says:

    Hi there just wanted to give you a quick heads up and let you know a few of the images aren’t loading properly.
    I’m not sure why but I think its a linking issue. I’ve tried it in two different web browsers and both
    show the same results. https://goo.gl/maps/xDDZTHpzr9rTbnm77

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