The information in this blog entry summarizes new information about what individual customers value in a firm's products and services. This information (called "customer capital") will be used to calculate the value of customers on a much more accurate and actionable basis .
For some time sociologists have known that affluent people purchase discretionary goods and services for symbolic as well as practical value. Some have argued that the primary value of these goods and services is their effectiveness in communicating status. The benefits of these insights have been available to marketers of luxury brands in the form of marketing consulting and/or market research.
Economists have also studied luxury goods and recognize that these goods provide "utilities" in addition to their functionality. Economists recognize the importance of "personal taste" in influcing these decisions at the individual level. As a result they have not attempted to measure the decision making process of affluent individuals due to the lack of reliable "preference" metrics. In this case "reliable" means metrics that are repeatable over multiple purchases and are applicable across multiple product categories. The classic economic problem might be identifying and measuring the preferences of individuals for using the same amount of money for the purpose of making a down payment on an automobile versus taking a vacation. Some economists (Richard Thaler, for example) refer to this type of decision as "quasi rational" since factors other than economic play such an important role.(https://www.russellsage.org/publications/quasi-rational-economics).
We are very pleased that our research regarding "personal drivers of consumption" may provide a set of preference metrics that economists can include in their designs. These preference metrics claerly differentiate the "tastes" of individuals and correlate with spending behavior across multiple product and service categories. We are looking for a University that would like to have access to our data base. And we are working with several clients to help them achieve the benefits of what we may call Quasi Rational Marketing.
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