The definition of the customer should enable to answer the following specific questions like
- How many active customers do we have?
- How many customers we are about to lose?
Definition should enable to extract the accurate customers list – such as following examples – from customer database via queries
- We have 3689 active customers.
- If they (the customers) do not make this (any defined) transaction or not show up for more than 3 weeks we will lose 231 customers
Please notice that, in this assignment, our purpose is not to define the “target audience” of advertising agencies, but a FUNCTIONAL “measurable / operational” definition of customer for the selected sector.
In other words, I expect a measurable and comparable definition of customer such as
- The person who buys gasoline from our station at least twice a month is our customer. However the person who buys time to time from us while passing close to our station and stop by chance is not going to be considered our customer.
The customer should be defined in such a way after querying from data warehouse the following groups of customers can be identified.
- Active customer
- Inactive customer
- Lost customer
Thus, you can distinguish between valuable customers from the rest of the customers. These functional definitions are also essential if the purpose is to regain the lost customer. For example; by utilizing the measurable definition of the customer, when the customers who formerly defined as active customer became inactive customers it will be easy to identify those inactive customer and the target who are intended to be regained can be clearly identified.
Important note: Those definitions should be “mutually exclusive and collectively exhaustive”. It means, their union must cover all the events, but no more than one event can occur at a given time. Just like puzzle, all pieces together form the complete picture and any of the pieces are not overlapping.
Once someone became a customer, she/he (on an institution) is either active or inactive or lost customer or some other cluster (such as pass through customer) . An area between them should not exist.
Please watch the following funny video to see how operational definition is important. https://www.youtube.com/watch?v=cDA3_5982h8