Best Buy Best Buy has assembled a 15 plusterabyte database with seven years of data on 75 million households. It captures information about every interaction from phone calls and mouse clicks to delivery and re-batecheck addresses and then deploys sophisticated algorithms to classify over three-quarters of its customers, or more than 100 million individuals, into profiled categories such as “Buzz” (the young technology buff), “Jill” (the suburban soccer mom), “Barry” (the wealthy professional guy), and “Ray” (the family man). The firm also applies a customer lifetime value model that measures transaction-level profitability and factors in customer behaviors that increase or decrease the value of the relationship.
Knowing so much about consumers allows Best Buy to employ precision marketing and customer-triggered incentive programs with positive response rates.