Build your Cohorts around Customer Intensity

A two part series exploring the customer intensity metric

How do you group your customers? Typical consumer businesses create their cohorts based on age, gender or location. Some may expand out to using basic customer behavior with things like a rollup of the amount spent in the last year, or a segment based on number of items added to a shopping cart. The wild businesses will build their cohorts with even more exciting inputs, unifying identity and creating segments that take in usage data from their products, services, content and collaterals.

Invariably, these grouping will struggle to capture the complexities of your audience. Value comes out of a grouping structure that tells you something by its nature, versus only being a layer on which data can be further segmented or refined.

How does your structure tell you something? How does splitting your cohorts in that way add value to you?

Or maybe a simpler one first off — how should you think critically about cohorts?

The way to think about cohorts is to examine whether they are revealing insights to you that would be otherwise hidden. Create them, and evaluate them, with that mindset — if they are not revealing insights, it is not worth the investment of your team to create and maintain them — even if they are simpler to create, if the insights being delivered are useless or already known, the investment of time spent discussing them is a waste.

It can be very hard to find a grouping that delivers insights but does not have sizable number of anomalies, and frustration can easily lead you back to overly simplistic, good-enough groupings: age, gender, location, number of visits, purchases, clicks or the like.

There is a better way. Look at customer intensity as your barometer.

How intensely do your customers feel about you? How much space do you occupy in their lives?

Grouping by customer intensity means grouping based on customer loyalty, amount owned of available attention and capital, and net perceived value delivered by your brand. This means creating groups of customers that will be united by intensity of the emotion they feel about your brand.

When you feel emotionally close to something, you will pay more attention to it. And the value delivered by intense attention is exponentially more than the value delivered by light attention.

So how does this structure tell you something? How does splitting your cohorts in this way add value to you?

Using customer intensity as a barometer creates a structure that highlights your closest, most intense customers. Instead of losing their voice in the noise, or losing out in favor of the most easily reached customers, defining them as a clear segment creates a structure biased towards favoring them, and others on that journey, though they may be a smaller part of your customer base.

This type of grouping will also push your thinking towards how to increase the percentage of your users at higher customer intensity levels. While there will be some steady state for every industry — after all, not every customer is going to become a fan, and not every fan is going to become a super fan — leveraging the tendency to classify some group as good and/or as a destination can be helpful in driving adoption and implementation of this classification framework.

It also pushes your thinking towards increasing loyalty and growing the number of your closest, most intense customers — both metrics important for your business.

Next week we will be talking about how to figure out the components of the customer intensity metric for your business.