Recommendation

If you lack clarity about the number of unique customers you have, the health of your customer base and who your highest value customers are, you’re not alone, say Peter Fader, Bruce G. S. Hardie and Michael Ross. Many businesses have a 2D view of their profits and revenues, and fail to properly consider the additional and vital dimension – customers. Learn the basics of conducting a customer-base Audit, which will empower you to spot problems and opportunities before they arrive while gaining a more complex understanding of the customer behaviors behind the numbers.

Take-Aways

• Many firms lack clarity on who counts as a customer and customer statistics.
• Move past the 2D analysis of your revenue, and embrace a data cube approach.
• Analyze customer cohorts to better understand the value they bring your firm.
• Track “same-customer performance” over time to understand behavior changes.
• Conduct a cohort analysis to gain a more nuanced understanding of your customer base.
• Focus on attracting the highest value customers – not the most customers possible.
• Deepen your understanding of product performance by applying a customer-centric lens.
• Build customer centricity into your business plan, embracing a new operating mind-set.

Summary

Many firms lack clarity on who counts as a customer and customer statistics.

How much do you know about your customer base? Do you know which products appeal most to your highest value customers? Do you know how many first-time buyers plan to make a second purchase or how your customers differ in the value they bring your firm? If you’re like most senior executives, you probably can’t answer these questions offhand. Most organizations lack adequate reporting structures and systems, reflecting a failure to truly embrace a customer-centric mind-set. Fortunately, a “customer-base audit” can help you develop a vital understanding of your organization’s profit and revenue streams while guiding the creation of a healthy growth strategy.

“Imagine looking at your business under a microscope. That is what a customer-base audit is like: It provides deep insight into customer differences and dynamics that have always been there but were typically not visible.”

When beginning their customer-base audit, many executives cannot even agree upon what constitutes a customer. For example, is someone who uses a platform’s services, such as Google, a “customer” or simply a “user” if they’re not subscribing to premium paid services? When coming to a consensus about whom you view as a customer, consider details such as:

• Whether making a payment is required to be labeled a customer.
• Whether you consider the payer or the person they’re purchasing for (e.g., an employee) a customer.
• Do customers include people who haven’t contributed to your revenue stream in the past year but who you still have legal obligations to (e.g., users with warranties)?
• Are customers who buy your product from channel intermediaries still customers?

Move past the 2D analysis of your revenue, and embrace a data cube approach.

Your “top line,” which refers to your gross sales or revenue, is the sum of every transaction over a given period. Your goal is to identify “customer profit” with more sophistication, ultimately moving past simple analysis such as “spend minus direct product costs” toward considering semi-variable costs (e.g., operations costs such as returns and packing). To better conceptualize your business’s transactions, it helps to use a data cube, visualizing the three dimensions of the cube as the following: the customer making the transaction, the time in which the transaction occurred, and the product sold. Most businesses only reflect on the dimensions of the product and time, ignoring the customer dimension – it is as though one of the cube’s edges is facing away from them, outside their perception. Stop analyzing transactions in this 2D manner, and embrace a more 3D approach, pivoting the cube’s orientation to focus more on understanding the customer behavior driving your top line.

“The measurement of customer-level profit is the Holy Grail for any firm that aspires to be customer centric.”

Analyze the customer dimension by using the following lenses:

• First lens – Focus on the customer’s behavior over a specific time (e.g., a quarter) to better understand performance.
• Second lens – Reflect on the customer’s behavior over the dimension of time, but take a different view, sorting results by focusing on circumstantial events, such as natural disasters, that may have impacted your top line.
• Third lens – Focus on the performance of a customer cohort or those you acquired within the same period and how it evolves over time, tracking cohort-related buying patterns.
• Fourth lens – Compare cohorts to one another to understand the differences between the customers you’ve acquired at different times: How has the quality or quantity of customers you attract changed over time?
• Fifth lens – Integrate all your findings and consider customer transactions over time more complexly and holistically.

Analyze customer cohorts to better understand the value they bring your firm.

Look beyond averages when assessing customer behavior as “there is no average customer,” and analyze customers with the three D’s:

1. Distributions – Look at the distribution of total spend, the number of customer transactions and the average spend per transaction.
2. Decomposition – Conduct a multiplicative decomposition to better understand underlying revenue patterns. For example, you could decompose your quarterly cohort revenue into the number of active cohort members and the average spend of each active member. Next, you’d decompose your active members figure into cohort size and the percentage of the cohort that’s active before decomposing your average spend per active member into the average order frequency (AOF) and average order value (AOV).
3. Decile analysis – Conduct a decile analysis to better understand differences in the value different customers bring your firm. Consider organizing your data by sorting your customer cohorts from most to least profitable.

Track “same customer performance” over time to understand behavior changes.

To better understand overall changes in your company’s performance from one year to the next, it’s helpful to view the customer as your “fundamental unit of analysis.” Dig deep when analyzing customer behavior, looking for the minor changes behind the bigger changes. For example, if the mean average spend increased per customer in a year, ask yourself how many of the customers accounting for sales in your current year are the same as those in past years.

“We can get a sense of ‘same-customer performance’ by looking at the revenue and profit associated with those customers who made at least one purchase in both years.”

Just as retail outlets count “same-store-sales,” to better understand how individual stores affect the company’s overall performance, you can also track “same-customer performance,” looking at the profit and revenue associated with individual customers who’ve made one or more purchases two years running. Gain even deeper insights by conducting a modified decile analysis, “creating bins of customers,” to separate the most from the least profitable to better understand your highest value customers. When measuring your firm’s performance changes between two years, be sure to account for events outside your control, such as a public health crisis or recession, that could impact your results, as a lack of growth may not be due to a failure on your firm’s part. If you notice customers “disappear” or spend less money from one year to the next, reflect on plausible explanations and the tactics you’re engaging to inspire purchases.

Conduct a cohort analysis to gain a more nuanced understanding of your customer base.

When trying to understand how your customer’s behavior within a cohort evolves over time, consider using an RFM analysis, which stands for the following:

• Recency – Identify when customers in a cohort last made a purchase, then group cohort members based on recency.
• Frequency – How many transactions have cohort members made over your chosen period? Sort customers again based on frequency.
• Monetary value – Reflect on the cohort’s spend or the profit you’ve made on average per transaction over time, creating groups based on value.

“One of the most immediate and important observations that arises in a customer-base audit is that all customers are not created equal.”

Cohort analysis is beneficial, as it can help you better understand how customers’ buying behavior changes as they “age” and the number of repeat customers you have.When conducting a cohort analysis, executives should consider the following:

• The technologies the firm will leverage to “tag and track” new customers.
• How your firm plans to assess the effectiveness of campaigns and promotions (e.g., Do you pay attention to long-term and short-term effects?).
• The reporting mechanisms you have to keep track of customer behavior changes.
• Other acquisition characteristics you could use to sort cohorts aside from time (e.g., those who purchase a specific product).
• How long do you wait before you stop tracking and attempting to win back customers who’ve disappeared?

Focus on attracting the highest value customers – not the most customers possible.

You should be conducting “cohort-to-cohort analyses” just as regularly and routinely as you conduct “period-to-period analyses” (e.g., such as comparing sales of products within the same store). Ideally, you aim for “cross-cohort stability,” in which you don’t see dramatic differences between cohorts. However, analyzing the differences between cohorts can help you spot early warning signs of customer base degradation. For example, if each new cohort makes fewer second purchases and takes longer to do so, you should reflect on what’s causing this (e.g., new competition) and take action.

“Every growth-oriented firm is constantly seeking new customers, but the customer-centric firm will focus at least as much on the quality of the next batch of customers as they will on the quantity of them.”

Using all five lenses, you should be auditing your customer base to determine its overall health and gain a deeper understanding of underlying customer behaviors impacting it. If you notice inter-cohort differences you don’t understand, then start researching, perhaps having conversations with people at your firm who might shed some insight into the changes. For example, have they launched new promotional or pricing policies or altered your product mix? For a thriving customer base, it’s important to focus on more than simply attracting new customers – you should also focus on growing your existing customers’ value to keep your base healthy.

Deepen your understanding of product performance by applying a customer-centric lens.

Now that you’ve gained a more nuanced understanding of your customers’ influence on your revenue, you can analyze the product dimension with more complexity – understanding your customers will deepen your knowledge of product performance. For example, you can better identify high-value customers by integrating metrics such as the number of product units customers have purchased (#units) and the average number of product categories they’ve purchased from (#categories purchased) into your decomposition analysis to identify which customers spend the most and buy from the most categories.

“Products should be seen as a vital conduit of customer profitability, but ultimately it is the customer driving revenue, not the product.”

You can also look at the category-level performance (not just firm-level) to understand which categories appeal most to buyers. To decompose category profit, consider using the following equation: “category profit = the number of active firm customers (in the given period of time) × the percentage of customers active in the category (which we will also call category penetration) × average category order frequency (ACOF) × average category order value (ACOV) × average category margin.” By integrating the customer dimension into your product performance analysis, you can better understand what’s really profitable at your firm. After all, the product categories with the highest price tags may not be your most profitable if customers buy more from less expensive categories.

Build customer centricity into your business plan, embracing a new operating mind-set.

Structure your customer-centric strategy around these three elements:

• Customer-centric planning – Don’t simply build your business plans around traditional elements such as geography, product line or channels; make customers central to your planning. Do so by figuring out how much profit and revenue you already get from your existing customers and how many new ones you’ll need to find to achieve your desired growth, carefully monitoring customer performance.
• Customer acquisition – Focus on aligning customer acquisitions to challenges and opportunities arriving based on the time of year (e.g., perhaps your business performs better in the Fall); aligning your products to customer acquisition, understanding the role different categories play in a customer’s life cycle; aligning acquisition spend, such as marketing spend, with customer value; and looking “beyond that first purchase” to focus on acquiring customers.
• Customer development and retention – Create incremental profitability and drive engagement by investing in different aspects of your proposition, including service and pricing, with your customer’s values in mind; investing in your highest value customers most; nudging customers to take your desired actions; and managing your loss-making customers (e.g., stop marketing to customers who return products more often).

“Many companies talk about being customer centric but keep making the same decisions with the same logic, in the same silos and with the same incentives. How can they be surprised when nothing changes?”

To recap, to truly embrace customer-centricity, you must view your customer as the fundamental unit of analysis, put acquisition, retention and customer development at the center of your growth accounting framework, put long-term customer profitability at the center of your decision-making and learn to recognize your highest-value customers. Your customer-base audit is only the beginning of your transition toward customer-centricity. Start cultivating a culture of curiosity around customer data as you inspire people at your firm to enthusiastically adopt your new customer-centric operating mind-set.

About the Authors

Peter Fader co-founded Theta, a firm working to revolutionize finance through customer-based valuation, and the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania. He is the co-author of The Customer Centricity Playbook (2018). Bruce G. S. Hardie is a marketing professor at the London Business School. He develops tools to analyze marketing and customer data. Michael Ross is the senior vice president of retail data science at EDITED, and a non-executive director at Sainsbury’s Bank, N Brown Group and Domestic & General. He has co-founded businesses such as Dynamic Action and eCommera, and served as a consultant at McKinsey & Company.

Review 1

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” by Bruce G. S. Hardie, Michael Ross, and Peter Fader is a book that aims to guide businesses towards achieving customer-centricity through a systematic and data-driven approach. This review provides a summarised account of the book’s main content and offers an overall critique.

The book is premised on the idea that a customer-centric business model is pivotal for companies in today’s highly competitive markets. The authors lay out a comprehensive framework for performing a customer-base audit, which they define as a structured method for extracting crucial insights about a firm’s customer base from transaction log data.

The centerpiece of the book is the customer-based corporate valuation (CBCV) framework. This method focuses on understanding customer behaviour to predict future purchases, cash flows, and the overall value of the customer base. The authors argue that by integrating the metrics derived from the CBCV framework into strategic and tactical decisions, firms can truly become customer-centric.

One of the book’s strengths is the authors’ focus on the use of data and analytics. They explain complex concepts in a detailed yet comprehensible manner, making the book a valuable resource for both novices and professionals in this domain.

While drawing from academic research, the authors do an excellent job of grounding their ideas in practical reality. They offer real-world examples from different industries, demonstrating how the CBCV model could be implemented in diverse contexts.

However, readers without a background in data analytics or statistical modelling might find portions of the book challenging. The authors use complex mathematical models and terminology that might not be easily accessible to all.

In conclusion, “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is an insightful guide that challenges the traditional methods of customer valuation. The authors make a compelling case for a data-centric view of customers and the need to integrate this model into business decisions.

Please note that while this review gives an overview, to fully understand and appreciate the authors’ insights, a complete reading of the book is recommended.

Review 2

Sure, here is a brief review of the book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader:

The book is a practical guide for businesses of all sizes to conduct a customer-base audit. The authors define a customer-base audit as “a systematic review of the buying behavior of a firm’s customers using data captured by its transaction systems.” The audit can be used to answer questions such as:

• How healthy is your customer base?
• How realistic are your growth objectives?
• How do your customers differ in terms of their behavior and value?
• Which customers are most likely to churn?
• How can you improve the lifetime value of your customers?

The book is divided into three parts. The first part provides an overview of the customer-base audit process. The second part discusses the different types of data that can be used in a customer-base audit. The third part provides step-by-step instructions on how to conduct a customer-base audit.

The book is well-written and easy to understand. The authors use clear and concise language, and they provide real-world examples to illustrate their points. The book is also packed with practical insights that businesses can use to improve their customer relationships.

Overall, The Customer-Base Audit is an essential resource for any business that wants to improve its customer centricity. The book provides a step-by-step guide to conducting a customer-base audit, and it provides valuable insights into how to use the results of the audit to improve customer relationships.

Here are some of the key takeaways from the book:

• A customer-base audit is a critical first step on the journey to customer centricity.
• The audit should be conducted regularly to track changes in customer behavior and value.
• The data used in the audit should be comprehensive and accurate.
• The results of the audit should be used to improve customer acquisition, retention, and growth.

If you are a business leader who wants to improve your customer relationships, I highly recommend reading The Customer-Base Audit. It is a valuable resource that will help you gain a deeper understanding of your customers and how to better serve them.

Here are some additional thoughts on the book:

• The book is a bit technical in places, but it is still accessible to business leaders without a background in marketing or analytics.
• The book is more focused on the analytical aspects of customer-base auditing than on the strategic aspects. However, the authors do provide some insights into how to use the results of the audit to improve customer relationships.
• Overall, I think the book is a valuable resource for businesses that want to improve their customer centricity. It is well-written, easy to understand, and packed with practical insights.

Review 3

Here is a brief review of the book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader.

This book is a practical and powerful guide that shows how we can measure and improve the value of our customer base and become more customer-centric. The authors, Bruce G. S. Hardie, Michael Ross, and Peter Fader, are experts in customer analytics, data science, and marketing who have worked with leading companies and organizations around the world.

The book is based on the idea that most businesses do not have a clear understanding of who their customers are, how they behave, and how much they are worth. The book argues that this lack of insight leads to poor decisions, wasted resources, and missed opportunities. The book proposes a solution: conducting a customer-base audit, which is a systematic review of the key metrics and drivers of customer value.

A customer-base audit is a four-step process that involves:

• Defining the scope and objectives of the audit
• Collecting and preparing the data
• Analyzing the data using proven models and methods
• Communicating and acting on the findings

The book is written in an accessible and engaging style, with examples, case studies, and insights from the authors’ own experience and from other successful practitioners. The book is intended for anyone who wants to learn how to measure and improve their customer base, such as:

• Business leaders and managers who want to make better strategic decisions
• Marketers and salespeople who want to optimize their campaigns and tactics
• Analysts and data scientists who want to apply cutting-edge techniques and tools
• Consultants and educators who want to share best practices and frameworks

The book is a new publication that was released in November 2021 by Wharton School Press. The book has received positive feedback from early readers and endorsers, who praise the book’s clarity, rigor, relevance, and impact.

Review 4

Sure, here is a brief review of the book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader:

In The Customer-Base Audit, the authors argue that a customer-base audit is the first step any business should take on its journey to customer centricity. A customer-base audit is a systematic review of the buying behavior of a firm’s customers using data captured by its transaction systems. It can help businesses answer questions such as:

• How healthy is my customer base?
• How realistic are my growth objectives?
• How do my customers differ in terms of their behavior and value?

The book provides a step-by-step guide to conducting a customer-base audit, from gathering data to analyzing results to making recommendations. The authors also discuss the importance of customer-base auditing in the context of customer centricity, and how it can help businesses make better decisions about how to acquire, retain, and grow their customers.

The book is well-written and easy to understand. The authors use clear and concise language, and they provide many real-world examples to illustrate their points. The book is also packed with actionable insights that businesses can use to improve their customer-base performance.

Overall, The Customer-Base Audit is an essential resource for any business that wants to become more customer centric. It is a comprehensive and practical guide to conducting a customer-base audit, and it provides valuable insights into how to use the results of an audit to improve business performance.

Here are some of the key takeaways from the book:

• A customer-base audit is essential for any business that wants to understand its customers and make better decisions about how to acquire, retain, and grow them.
• The customer-base audit should be conducted regularly, as the behavior of customers can change over time.
• The results of the customer-base audit should be used to make changes to the business’s marketing, sales, and customer service strategies.
• Customer centricity is not just about collecting data about customers. It is about using that data to create a better customer experience.

If you are a business leader who wants to improve your customer-base performance, I highly recommend reading The Customer-Base Audit. It is a valuable resource that can help you take your business to the next level.

Review 5

Here is my review of the book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader.

The book is a concise and practical guide for executives who want to gain a deeper understanding of their customers and their value to the firm. The authors, who are experts in customer analytics and marketing, propose a systematic approach to conducting a customer-base audit, which is a comprehensive analysis of the buying behavior and profitability of a firm’s customers using transaction data. The book explains why a customer-base audit is essential for any business that wants to become more customer-centric, and how it can help answer important questions such as:

• How healthy is your customer base? How realistic are your growth objectives?
• How do your customers differ in terms of their behavior and value?
• How has the quality of your customers changed over time?
• What changes in customer behavior lie behind period-to-period changes in firm performance?
• What is important to your high-value customers? Which products help you acquire and retain your best customers?

The book provides five “lenses” or perspectives through which an executive can examine these questions, each with its own set of metrics and visualizations. The lenses are:

• Customer retention
• Customer acquisition
• Customer lifetime value
• Customer heterogeneity
• Customer-product relationships

The book also offers a worksheet that can help executives conduct their own customer-base audit, as well as a discussion guide for readers who want to deepen their understanding of the concepts and applications. The book is based on the authors’ extensive research and consulting experience, as well as their popular online course on customer analytics.

The book is written in a clear and engaging style, with plenty of examples and illustrations from various industries and sectors. The book is suitable for anyone who wants to learn more about how to measure and manage their customer base, whether they are new to the topic or already familiar with some of the concepts. The book is also a valuable resource for educators and students who want to learn about the latest developments and best practices in customer analytics and marketing.

The book is a must-read for anyone who wants to take the first step on the journey to customer centricity, which is the strategic orientation that recognizes the different needs and values of individual customers and aligns the firm’s activities accordingly. By conducting a customer-base audit, executives can gain a deeper insight into their customers’ behavior and preferences, and use this information to make better decisions that enhance customer satisfaction, loyalty, and profitability.

Review 6

Sure, here is a brief review of the book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader:

In The Customer-Base Audit, the authors argue that a customer-base audit is the first step on the journey to customer centricity. A customer-base audit is a systematic review of the buying behavior of a firm’s customers using data captured by its transaction systems. It can help businesses answer questions such as:

• How healthy is my customer base?
• How realistic are my growth objectives?
• How do my customers differ in terms of their behavior and value?

The book provides a step-by-step guide to conducting a customer-base audit, from identifying the data you need to collecting and analyzing it. It also includes case studies from a variety of industries to illustrate the benefits of customer-base auditing.

The authors emphasize that a customer-base audit is not a one-time event. It should be conducted regularly to track the health of your customer base and identify areas for improvement.

The book is well-written and easy to understand. The authors use clear and concise language to explain complex concepts. The case studies are also helpful in illustrating the benefits of customer-base auditing.

Overall, The Customer-Base Audit is a valuable resource for businesses that want to improve their customer centricity. It provides a practical guide to conducting a customer-base audit and shows how the insights gained from an audit can be used to improve business performance.

Here are some of the key takeaways from the book:

• A customer-base audit is a critical first step on the journey to customer centricity.
• The data you need for a customer-base audit can be found in your transaction systems.
• There are a variety of analytical techniques that can be used to analyze customer-base data.
• The results of a customer-base audit can be used to identify areas for improvement in your customer strategy.
• A customer-base audit should be conducted regularly to track the health of your customer base.

If you are interested in learning more about customer centricity or conducting a customer-base audit, I highly recommend reading The Customer-Base Audit. It is a valuable resource for businesses of all sizes.

Review 7

The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Bruce G. S. Hardie, Michael Ross, and Peter Fader is a comprehensive guide to conducting a customer-base audit. The book provides a detailed framework for assessing the health of a company’s customer base, and offers practical advice on how to improve customer loyalty and retention.

The book begins by introducing the concept of customer-centricity, and discussing the importance of understanding the needs and wants of customers. The authors then provide a step-by-step guide to conducting a customer-base audit, covering topics such as data collection, analysis, and interpretation. They also discuss the importance of communicating the results of the audit to senior management, and developing a plan to address any issues that are identified.

The book is full of practical advice and insights, and is an essential resource for any company that wants to improve its customer focus. The authors have a wealth of experience in the field of customer relationship management, and they share their insights and best practices in this book.

Overall, The Customer-Base Audit is a valuable resource for any company that wants to improve its customer focus. The book provides a comprehensive framework for assessing the health of a company’s customer base, and offers practical advice on how to improve customer loyalty and retention.

Review 8

Introduction: “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” by Bruce G. S. Hardie, Michael Ross, and Peter Fader is a comprehensive guide that explores the importance of understanding and analyzing customer data to achieve customer-centricity in business. This review will provide an overview of the key themes and concepts discussed in the book, as well as the strengths and weaknesses it presents.

Summary: “The Customer-Base Audit” emphasizes the significance of putting customers at the center of business strategies. The authors argue that by conducting a thorough analysis of customer data, organizations can gain valuable insights into customer behaviors, preferences, and profitability. The book offers practical frameworks and techniques to perform a customer-base audit, enabling companies to make informed decisions and tailor their offerings to meet customer needs.

Key Themes and Concepts:

• Customer Centricity: The book explores the concept of customer centricity, which involves focusing on understanding and satisfying the needs of individual customers. It emphasizes the shift from a product-centric to a customer-centric approach, highlighting the long-term benefits of building strong customer relationships.
• Customer-Base Audit: The authors introduce the concept of a customer-base audit as the first step towards achieving customer centricity. They provide a framework for analyzing customer data, segmenting customers based on their behavior and profitability, and identifying key insights that can drive strategic decision-making.
• Customer Lifetime Value (CLV): The book highlights the importance of calculating customer lifetime value, which measures the profitability of customers over their entire relationship with a company. It discusses how CLV can be used to identify high-value customers, allocate resources effectively, and prioritize customer acquisition and retention efforts.
• Data-Driven Decision Making: The authors stress the significance of utilizing data to inform business decisions. They discuss various data sources, such as transactional data, customer demographics, and customer interactions, and provide guidance on leveraging this data to gain actionable insights and drive customer-centric strategies.

Strengths:

• Practical Framework: “The Customer-Base Audit” offers a practical framework for conducting a customer-base audit, making it easier for organizations to implement customer-centric strategies.
• Data-driven Approach: The book emphasizes the importance of data-driven decision making, providing readers with the tools and techniques to effectively analyze customer data and derive actionable insights.
• Real-world Examples: The authors provide real-world examples and case studies to illustrate how companies have successfully implemented customer-centric strategies, making the concepts more relatable and applicable.

Weaknesses:

• Technical Jargon: The book occasionally uses technical jargon related to data analysis and customer metrics, which may be challenging for readers who are not familiar with these concepts. A glossary or clearer explanations could have been helpful.

Conclusion: “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” by Bruce G. S. Hardie, Michael Ross, and Peter Fader is a valuable resource for organizations seeking to prioritize customer centricity in their business strategies. The book provides practical frameworks, techniques, and real-world examples to guide readers through the process of conducting a customer-base audit and leveraging customer data for informed decision making. While some technical jargon may pose a challenge for certain readers, the book serves as an informative guide for businesses aiming to transform their approach and create a customer-centric culture.

Review 9

Introduction:

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is a seminal book that offers a comprehensive framework for companies to assess and improve their customer base. Written by three prominent experts in the field of customer analytics, the book provides a practical approach to understanding the customer journey and identifying opportunities for growth. In this review, we will delve into the key concepts, highlights, and limitations of the book to provide a detailed analysis of its value.

Key Concepts and Highlights:

• Customer-Base Audit: The book introduces the concept of a customer-base audit, which involves analyzing various aspects of the customer base, including demographics, behavior, and preferences. The authors argue that this audit is the first step towards customer centricity, as it helps organizations understand their customers better and identify potential areas for improvement.
• Customer Journey Mapping: The authors provide a detailed explanation of the customer journey, including the various stages and touchpoints that customers encounter. They emphasize the importance of understanding the customer journey to identify opportunities for improvement and create a more seamless customer experience.
• Segmentation and Targeting: The book offers a comprehensive approach to segmenting and targeting customers based on their characteristics and behaviors. The authors provide practical tools and techniques for identifying the most profitable customer segments and tailoring marketing efforts to each segment.
• Advanced Analytics: The authors discuss various advanced analytics techniques, including machine learning, data mining, and predictive modeling, which can be used to gain insights into customer behavior and preferences. They also provide examples of how these techniques can be applied in real-world scenarios.
• Customer Centricity: The book emphasizes the importance of customer centricity, which involves designing products and services that meet the needs and preferences of customers. The authors argue that customer centricity is key to long-term success and sustainable growth.

Limitations and Critiques:

• Lack of Practical Examples: While the book provides a comprehensive framework for conducting a customer-base audit, it lacks practical examples of how to implement the various techniques and tools discussed. As a result, readers may struggle to apply the concepts to their own organizations.
• Complexity: Some of the concepts and techniques discussed in the book may be complex and difficult to understand, particularly for those without a strong analytical background. This could limit the book’s appeal to a wider audience.
• Limited Focus on Emerging Trends: While the book provides a comprehensive overview of customer analytics, it does not delve into emerging trends such as the impact of AI and automation on customer relationships. As a result, readers may find the book’s scope limited in today’s rapidly evolving marketplace.

Conclusion:

In conclusion, “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is a valuable resource for organizations seeking to improve their customer relationships and drive sustainable growth. While the book provides a comprehensive framework for conducting a customer-base audit and identifying opportunities for improvement, its limitations in practical examples and limited focus on emerging trends may limit its appeal to a wider audience. Nonetheless, the book’s insights and techniques can be applied to a variety of industries and organizations, making it a valuable addition to any business library.

Review 10

The book The Customer-Base Audit: The First Step on the Journey to Customer Centricity by Peter Fader, Bruce Hardie, and Michael Ross is a valuable guide for executives who want to gain a deeper understanding of their customers and their business performance. The authors, who are experts in customer analytics and marketing, propose a systematic approach to reviewing the buying behavior of a firm’s customers using data from its transaction systems. This customer-base audit helps answer important questions such as how healthy, diverse, and valuable the customer base is, how it has changed over time, and how it affects the firm’s growth objectives and product strategies. The book presents five “lenses” through which an executive can examine different aspects of customer behavior and value, such as retention, acquisition, cross-selling, and profitability. The book also provides practical tools and examples to help implement the customer-base audit in various industries and contexts. The book is a must-read for anyone who wants to adopt a more customer-centric mindset and make informed decisions based on data-driven insights.

Review 11

Book Summary:

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is a thought-provoking book that focuses on the importance of understanding a company’s customer base to achieve customer centricity. The authors, Bruce G. S. Hardie, Michael Ross, and Peter Fader, provide a comprehensive framework for conducting a customer-base audit, which is a systematic examination of a company’s customer base to identify areas of strength and weakness. The book is filled with practical examples, case studies, and insights from experienced practitioners, making it an invaluable resource for business leaders looking to improve their customer-centric strategies.

Key Takeaways:

• The Importance of Understanding the Customer Base: The book emphasizes the significance of understanding a company’s customer base to achieve customer centricity. The authors argue that companies need to move beyond traditional customer segmentation and instead focus on individual customers to create personalized experiences.
• The Customer-Base Audit Framework: The authors provide a comprehensive framework for conducting a customer-base audit, which includes six key components: customer profiling, customer journey mapping, customer attitudes and behaviors, customer segments, customer life cycle analysis, and customer feedback and complaint analysis.
• Identifying Areas of Strength and Weakness: The book helps readers identify areas of strength and weakness within their customer base, which can inform strategic decisions related to product development, marketing, and customer service.
• Case Studies and Practical Examples: The book includes numerous case studies and practical examples from experienced practitioners, providing readers with real-world insights and applications of the customer-base audit framework.
• Customer Centricity in Practice: The authors provide guidance on how to implement customer-centric strategies in practice, including the use of data analytics, customer feedback, and employee engagement to create personalized experiences for customers.

Strengths:

• Comprehensive Framework: The book provides a comprehensive framework for conducting a customer-base audit, which is a valuable resource for business leaders looking to improve their customer-centric strategies.
• Practical Examples: The book includes numerous case studies and practical examples from experienced practitioners, providing readers with real-world insights and applications of the customer-base audit framework.
• Emphasis on Customer Centricity: The book emphasizes the importance of understanding the customer base to achieve customer centricity, which is a key differentiator for businesses looking to stand out in a crowded marketplace.

Weaknesses:

• Limited Focus: The book primarily focuses on the customer-base audit framework and its application, which may limit its appeal to readers looking for a broader exploration of customer centricity.
• Technical Language: The book uses technical language and jargon related to data analytics and customer segmentation, which may be challenging for some readers to understand.

Target Audience:

The book is primarily targeted at business leaders, marketing professionals, and customer experience experts looking to improve their customer-centric strategies. The book is also suitable for academics and researchers interested in customer centricity and the use of data analytics in business.

Conclusion:

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is an informative and practical guide for business leaders looking to improve their customer-centric strategies. The book provides a comprehensive framework for conducting a customer-base audit and includes numerous case studies and practical examples from experienced practitioners. While the book may have some limitations, such as a limited focus and technical language, it is an invaluable resource for anyone looking to understand their customers better and create personalized experiences.

Review 12

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” by Bruce G. S. Hardie, Michael Ross, and Peter Fader is a highly informative and practical guide for businesses aiming to shift towards a customer-centric approach. This book lays the groundwork for understanding and optimizing your customer base, making it a valuable resource for executives, marketers, and strategists.

The central premise of the book is that businesses should focus on their customers, not just their products or services. It provides a structured framework, known as the Customer-Base Audit, which helps organizations assess and leverage the value within their customer base. This approach emphasizes the importance of customer lifetime value and the impact it can have on business success.

One of the book’s strengths is its clarity and conciseness. The authors present complex concepts in a straightforward manner, making it accessible to a wide audience. They also use real-world examples and case studies to illustrate key points, providing practical insights that can be applied immediately.

“The Customer-Base Audit” is not just a theoretical exploration; it offers actionable steps and methodologies that businesses can implement. By emphasizing the importance of data analytics and segmentation, it equips readers with the tools to identify high-value customers and tailor marketing efforts accordingly.

The book also underscores the necessity of aligning internal processes with a customer-centric strategy. It highlights the need for cross-functional collaboration within organizations, breaking down silos to ensure that everyone is working towards a common goal of customer satisfaction and loyalty.

However, some readers may find that the book leans heavily on data-driven approaches and might desire more qualitative insights into customer-centric strategies. Additionally, it may be more suitable for larger organizations with the resources to implement sophisticated analytics.

In summary, “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is a comprehensive and actionable guide for businesses looking to transition towards a customer-focused approach. Bruce G. S. Hardie, Michael Ross, and Peter Fader provide a clear roadmap for assessing and optimizing your customer base, ultimately driving business growth and success. If you’re seeking a practical guide to customer-centricity backed by data and real-world examples, this book is an invaluable resource.

Review 13

The book “The Customer-Base Audit” by Bruce G. S. Hardie, Michael Ross, and Peter Fader offers an insightful guide for businesses to assess their customer base and embark on a journey towards customer centricity. The authors present a structured approach to identifying, understanding, and leveraging customer segments, which can help organizations boost their revenue and sustain long-term growth.

Key Takeaways:

• The Importance of Customer Centricity: The book emphasizes the significance of shifting from a product-centric to a customer-centric approach, where businesses focus on meeting the needs and wants of their customers. The authors argue that this shift is crucial for achieving sustainable growth and staying ahead of the competition.
• The Customer-Base Audit: The authors introduce the concept of the Customer-Base Audit (CBA), a systematic process to evaluate a company’s customer base and identify opportunities for growth. The CBA involves analyzing customer data to segment customers, understand their behavior, and determine their lifetime value.
• Identifying Customer Segments: The book provides a framework for identifying and categorizing customer segments based on their behavior, preferences, and profitability. The authors describe four primary segments: Loyalists, Misusers, Strangers, and Ne’er-Do-Wellers. They also explain how to analyze customer data to identify these segments and their characteristics.
• Understanding Customer Behavior: The authors discuss the importance of understanding customer behavior, including purchasing patterns, usage rate, and loyalty. They provide examples of how businesses can use data analytics tools to track customer behavior and develop strategies to retain valuable customers.
• Leveraging Customer Segments: The book offers practical advice on how businesses can leverage their customer segments to increase revenue and customer loyalty. The authors suggest strategies such as personalization, customized marketing messages, and tailored product offerings to meet the needs of different customer segments.
• Case Studies: The book includes several case studies of companies that have successfully implemented the CBA framework, such as American Express, Intuit, and Dell. These examples demonstrate how the CBA approach can be applied across various industries and provide insights into the challenges and opportunities that companies may face during the process.
• Implementation Challenges: The authors acknowledge the potential challenges that businesses may face when implementing the CBA framework, such as data quality issues, organizational silos, and cultural barriers. They offer practical advice and strategies to overcome these challenges and ensure a successful implementation.

Strengths:

• Actionable Framework: The book provides a comprehensive and actionable framework for businesses to assess their customer base and develop strategies to improve customer engagement and loyalty.
• Data-Driven Approach: The authors emphasize the importance of using data analytics to understand customer behavior and preferences. They provide practical guidance on how to analyze customer data to identify patterns, trends, and opportunities.
• Case Studies: The inclusion of real-life case studies adds credibility to the CBA framework and demonstrates its applicability across different industries.
• Relevant for Both B2B and B2C: The book’s approach is relevant for both business-to-business (B2B) and business-to-consumer (B2C) companies, making it a valuable resource for a wide range of businesses.

Weaknesses:

• Complexity: The book’s framework may appear complex, especially for smaller businesses or those with limited resources. Implementing the CBA approach may require significant investments in data analytics tools and personnel.
• Lack of Emphasis on Emerging Technologies: The book does not extensively discuss the role of emerging technologies, such as artificial intelligence, machine learning, and the Internet of Things (IoT), in customer engagement and loyalty.
• Limited Focus on Ethical Considerations: The authors do not dedicate sufficient attention to the ethical considerations of collecting and using customer data, which is a critical aspect of customer-centric businesses.

In conclusion, “The Customer-Base Audit” is an insightful guide for businesses looking to embark on a journey towards customer centricity. The book provides a comprehensive framework for assess

Review 14

“The Customer-Base Audit: The First Step on the Journey to Customer Centricity” by Bruce G. S. Hardie, Michael Ross, and Peter Fader is an insightful and comprehensive guide that delves into the importance of understanding and analyzing customer behavior to achieve customer-centricity in business.

The book starts by emphasizing the significance of shifting focus from product-centricity to customer-centricity in today’s competitive market. It highlights the need for businesses to understand their customer base thoroughly and tailor their strategies accordingly. The authors argue that by conducting a customer-base audit, companies can gain valuable insights into their customer segments, allowing them to make informed decisions and drive growth.

One of the book’s strengths is its practical approach to conducting a customer-base audit. The authors provide a step-by-step framework that businesses can follow to effectively analyze their customer base. They emphasize the importance of data-driven decision-making and provide guidance on collecting, organizing, and analyzing customer data. The book also offers various tools and techniques to identify customer segments, measure customer value, and evaluate customer behavior.

Throughout the book, the authors stress the significance of customer lifetime value (CLV) as a key metric for understanding customer profitability. They explain how CLV can be used to identify high-value customers, develop targeted marketing campaigns, and optimize resource allocation. The authors also discuss the concept of customer heterogeneity and how businesses can leverage it to create personalized experiences and build long-term customer relationships.

Moreover, the book addresses the challenges and limitations of conducting a customer-base audit. It acknowledges the complexities of data analysis and the need for advanced analytics tools. The authors provide insights into overcoming these challenges and offer practical advice on implementing the findings of the audit into actionable strategies.

“The Customer-Base Audit” is written in a clear and accessible manner, making it suitable for both business professionals and academics. The authors provide numerous real-world examples and case studies to illustrate their concepts, making the book engaging and relatable. The inclusion of practical exercises and worksheets further enhances the book’s value as a hands-on guide.

However, one potential drawback of the book is its heavy reliance on quantitative analysis and data-driven approaches. While this is essential for conducting a customer-base audit, some readers may find it overwhelming or too technical. It would have been beneficial to include more qualitative aspects of understanding customer behavior to provide a more holistic perspective.

In conclusion, “The Customer-Base Audit: The First Step on the Journey to Customer Centricity” is a valuable resource for businesses aiming to become customer-centric. The book offers a comprehensive framework for conducting a customer-base audit and provides practical insights into leveraging customer data to drive growth. Despite its quantitative focus, the book successfully highlights the importance of understanding customer behavior and tailoring strategies accordingly. I highly recommend this book to anyone interested in enhancing their understanding of customer-centricity and leveraging customer data for business success.

Review 15

In “The Customer-Base Audit: The First Step on the Journey to Customer Centricity,” authors Bruce G. S. Hardie, Michael Ross, and Peter Fader present a comprehensive guide to understanding and leveraging customer data for achieving customer-centricity in business. They emphasize the importance of conducting a customer-base audit as the initial step towards building a customer-centric strategy, providing actionable insights and practical frameworks for implementation.

The book starts by establishing the significance of customer-centricity in today’s competitive marketplace. It highlights the shift from product-centric to customer-centric approaches and the crucial role of data in driving this transformation. The authors make a compelling case for businesses to focus on understanding their existing customer base thoroughly before making strategic decisions.

One of the book’s key strengths lies in its systematic and structured approach to conducting a customer-base audit. The authors lay out a step-by-step methodology, guiding readers through the entire process. They provide a range of analytical techniques and tools to extract valuable insights from customer data, including segmentation, customer lifetime value analysis, and forecasting. These methods help businesses identify their most valuable customers, understand their needs and preferences, and tailor their marketing and sales efforts accordingly.

Moreover, the authors emphasize the importance of integrating the customer-base audit into an organization’s decision-making processes. They provide practical examples and case studies of companies that have successfully adopted a customer-centric approach, illustrating how the customer-base audit can drive strategic initiatives, improve customer satisfaction, and increase profitability. By aligning the audit outcomes with business objectives, companies can make data-driven decisions that prioritize customer needs and enhance long-term relationships.

“The Customer-Base Audit” also delves into the c