Know Thy Customer

Fortnightly Magazine - November 1 1995
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Companies in competitive industries routinely collect information about their customers through a variety of sources (em including surveys, national census, and government and private sources. Such customer information and its applications are jealously guarded secrets, rarely shared with others in the industry. Customer information is not limited to expenditure on a company's products or services, but usually includes a customer profile. A customer profile attempts to segment groups of "typical" customers by, for example, the production structure of a company or the socioeconomic background of residential customers. Along with other economic variables, customer profiles are often used to predict the reaction of customers to new and existing products and to project future growth for a product's market.

Unfortunately, there is a dearth of information on utility customers, with the possible exception of large industrial customers. A captive market creates no imperative to know the customers. Traditionally, the only information utilities collected on their customers came from customer surveys in compliance with mandatory demand-side management (DSM) or least-cost pricing requirements. In a many of such surveys, the aim was not to "know thy customer," but to fulfill the stipulations of the DSM or integrated resource planning programs.

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