Scoring customers for intent, not just behaviour
Most customer segmentation approaches score behaviour. But behaviour without context is ambiguous. The same action can create or destroy value depending on when, where, and why it happens.
Most customer segmentation approaches score behaviour. Recency, frequency, monetary value. Discount usage, channel preference, engagement metrics. The assumption is that behaviour tells you who's valuable and who isn't.
But behaviour without context is ambiguous. A customer who only buys on discount could be extracting value you should have captured, or responding exactly as intended to your yield management strategy. A high-frequency customer could be genuinely loyal, or gaming your promotions for maximum benefit at minimum cost to them.
The same behaviour can create or destroy value depending on when, where, and why it happens. Behavioural segmentation can't tell the difference.
Scoring for intent
Value exchange is a framework for understanding what customer behaviour actually means. Instead of asking "what did they do?", it asks "what did they mean by it?"
Some customers give back proportionate to what they receive: they pay fair prices, use resources efficiently, generate referrals, provide useful data. Others extract value without reciprocating: they demand discounts where none are warranted, consume disproportionate service resources, game programmes designed to reward genuine loyalty.
By scoring for intent rather than just behaviour, you avoid two common mistakes:
Penalising customers who look problematic but aren't
- Discount-seekers responding to your own yield strategy
- High-touch customers who generate referrals that justify the cost
- Low-frequency buyers who purchase at full margin
Overvaluing customers who look good but aren't
- High-frequency buyers who only transact on promotion
- "Loyal" customers whose engagement masks declining spend
- Programme members who've learned to extract maximum benefit at minimum reciprocity
What we've found
We've tested value exchange segmentation against transaction data and found material differences from behavioural classification. Context - competition intensity, capacity utilisation, channel dynamics - changed what their behaviour meant.
We're continuing to test this across industries and contexts. The methodology is grounded in established theory but the application is new, and we're honest about what we don't yet know.
Want to explore value exchange for your business?
We're working with select organisations to test and refine this framework. If you're interested in understanding what your customer behaviour actually means, let's talk.