Customer Modeling is way of understanding the psychology of people going to the market. Yes, I have been talking about it for quite some time. This time, lets try to be a bit realistic. So, lets start by questioning ourselves. For case study lets take an example of a Shopping Mall.
What are the reasons that we find people in the Shopping Mall?
- Just visiting as time pass and hang out, kind of social gathering
- Visiting for the first time
- Searching for gifts to buy
- Family trip
- Tourist visit
- Visiting with a particular motive to buy something
These are some of the reasons that you find people in the Shopping Mall, assuming there is no movie complex in it. :)
The reason for listing down these factors is to understand the categories of customers coming to visit the shop.
Now among these 8 groups of people which one is the most valuable customer- meaning most likely to spend money. I personally see few, number 4,6,3. These are the likely customer because they are in the need of something.
Family Trip is more likely to spend their money than a individual roaming around. That is a very sociological thing. A Tourist has a tendency to buy souvenirs but may not spend much. Individual searching for gift or with particular target do spend but its difficult to change the set of their mind to buy something else as they are already predetermined.
Friends hanging around may not be very promising of all sue to that fact that they are casual passers buy with different agenda in their mind. People visiting for the first time really spends as he/she doesn't have a clue on what things can be found or are not psychologically prepared.
This is the first step in categorising your customer and understanding their values. Next would be the in depth analysis of the customer who actually bought something. This needs more time and data. Few data that are necessary to understand from a individual customer are :
- The financial status (income) of the customer
- The loyalty of the customer
- The spending of the customer
- The categories of things bought by the customer
- The age and location of the customer.
These are few details on the customer that can be gathered from some good Survey methods. after the data is received then an in depth analysis has to be carried out which includes generating a score card for a customer.
Score Card is number that can be used to measure the valuable of a customer. From these analysis, then a change in policy or other amendments can be carried out as recommended from the case study.
Some of the links that clarify these methods more clearly are: