How Retailers Grade You to Determine Customer Treatment - NBC 6 South Florida
NBC 6 Responds

NBC 6 Responds

Responding to every consumer complaint

How Retailers Grade You to Determine Customer Treatment

    processing...

    NEWSLETTERS

    How Retailers Grade You to Determine Customer Treatment

    It’s a secret score that shadows your almost-every move as a consumer and determines the prices you pay and the perks you receive. Yet experts told NBC 6 Responds the majority of consumers will probably never see it.

    (Published Friday, Feb. 15, 2019)

    From retailers to wireless carriers to airlines, some businesses are busy crunching data to give shoppers a secret score called a CLV or “Customer Lifetime Value”.

    It’s a projection used not only to estimate what a customer may be worth over time, but in some cases, how well to treat them.

    It’s a grade experts said is based on things like how much you spend, age, zip code, marital status, even details on your social media profiles.

    So why are businesses doing this?

    Property Tax Mix-Up

    [MI] Property Tax Mix-Up
    Some first-time home buyers thought they did everything right when they closed on their home, but a year after moving in, they got a notice saying they were late on their property taxes.
    (Published Thursday, Oct. 3, 2019)

    Experts said it’s to hold on to their best customers.

    “When you call in, when you either have a complaint or when you’re seeking some sort of discount, or when you’re saying, ‘Hey, my neighbor got this but I didn’t get this,’ they’re going to know who you are and, if they’re really sophisticated about it, they’ll know whether you really deserve it or not,” said Pete Fader, a marketing professor.

    Shoppers with a high score probably make frequent purchases and spend more money and would be more likely to get a call or email answered fast or get a refund without much trouble.

    More Victims Sue Conagra Over Exploding Cans of Pam

    [MI] More Victims Sue Conagra Over Exploding Cans of Pam

    Seventeen new lawsuits were filed against the maker of Pam cooking spray, as victims say they were severely injured when cans exploded in their kitchens.

    (Published Wednesday, Oct. 2, 2019)

    “It’s going to be purely based on what you’ve done and what we think you’re going to do next,” Fader said.

    In short, Fader said a customer’s CLV comes down to the relationship with the retailer.

    “If we see you engaging with the company more deeply, we have a sense that you’re going to be worth just that much more in the future,” Fader explained.

    You Should Read the Fine Print of Health Fitness Apps

    [MI] You Should Read the Fine Print of Health Fitness Apps

    Health-related apps come with benefits, but experts warn consumers that there could also be some downsides. Consumer Investigator Sasha Jones breaks down what you can do to help increase security and protect your privacy.

    (Published Monday, Sept. 30, 2019)

    Retailers don’t share this information with each other. Your CLV is different each place you spend money.

    Some consumer advocates think customers should be clued-in to their secret score.

    John Breyault from the National Consumers League said more pressure is needed on regulators for companies to release the grades.

    Miami Beach Company Fined For 'Certified Organic' Claim

    [MI] Miami Beach Company Fined For 'Certified Organic' Claim

    Truly Organic Inc. says their products were organic luxury products on advertisements posted online, but the Federal Trade Commission says that’s not true.

    (Published Friday, Sept. 27, 2019)

    “If these scores are being used to make important decisions about me, decisions about what kind of offers I’m going to be accepted as a customer at a bank or a company, then I think consumers deserve to know that and I think it’s an area where consumers are demanding more control,” Breyault said.

    The scores essentially might frame you as a serial returner, chronic complainer or just a plain old cheapskate. If that’s not accurate, privacy experts said that is why consumers should have a chance to review their secret score.

    We asked the National Retail Federation for a comment on this practice. They told us they don’t follow the issue.

    Get the latest from NBC 6 anywhere, anytime