Big Businesses Are Secretly Rating Customers

Jan 22, 2019, 9:13 PM | Updated: 9:48 pm

Everyone is a critic these days. We rate and review restaurants, hair salons and even car quick lubes, among many others. But, did you know that many big businesses are secretly rating you?

They are using what is called a Customer Lifetime Value score, or CLV. And, it can determine how a given company treats you. For example, how long you’ll be put on hold.

“Depending on who you are, based on your phone number, you may actually talk with someone faster if you are a more important or valuable customer,” said Westminster College associate marketing professor, Brian Jorgensen.

So, what makes you more valuable to a company?

If you are a frequent shopper without having to be enticed by bargains, you are likely going to have a higher CLV score. But, if you do things like: make frequent complaints with customer service, shop only for the big deals or return items often, well, your score is probably low in the gutters.

Brian Jorgensen

“These lifetime value scores are approximations,” explained Jorgensen. “They’re (businesses) basically looking into a crystal ball and based on what has happened in the past and try to predict what’s going to happen in the future.”

Besides what level of service you’ll get, Jorgensen says your CLV score can play a role in what products and ads you’ll see and even the prices you might pay for a product or service.

In November, the Wall Street Journal revealed how businesses collect and use data to determine a consumer’s CLV score. But, Jorgensen says the concept has been around for years. First, primarily as a way for businesses to rate other businesses that bought their goods or services. Typically, there was not a lot of data available for individually consumers. At least, not enough to build a CLV score.

Now, the advent of online sales and data brokers allows businesses like online stores, airlines and credit card issuers to rate their individual consumers much more easily.

“They know exactly who you are, what you purchased and what you’ve looked at,” Jorgensen said. “And, there’s all kinds of information that they could use to estimate how valuable you are to them.”

There is no uniform score. Different companies score you on different factors. Some only consider your shopping patterns, while others include data like age, marital status and zip code.

But, CLV scores themselves are kept secret from consumers.

“It makes me not happy about that,” exclaimed West Jordan resident Clarissa Koonts.

She says she’s bothered by customers being treated different because of a score.

“I don’t feel like that’s fair at all but it doesn’t surprise me,” said Daniel Zimmerman. “If it effects the way they treat me then I feel like it is a big deal.”
“We all want to be treated equally,” said Jorgensen.

But he says with the growth of both online shopping and data collection, we should expect the use of CLV scores to grow.

“Companies do have so much data on us,” he explained. “They do have the ability to treat us differently based on our purchasing habits and so forth.”

KSL 5 TV Live

Top Stories

Consumer File


Sunday Edition: Countdown To Election Day

This week on Sunday Edition, we count down to election day looking at Utah’s biggest race and the latest polling data.
24 days ago
Roe v Wade Utah...

Sunday Edition: Republican Primary Election Debates; Roe v. Wade impact in Utah; Drought Conditions outlook

Doug Wright sits down with Senator Dan McCay to discuss the Supreme Court leaked draft opinion on Roe v. Wade and about the so-called "trigger law" that would go into effect if Roe v. Wade is overturned.
4 months ago
Matt Gephardt and Sloan Schrage, KSL TV

GPS gadgets and other devices that can help parents keep tabs on their children

Moms and dads have all sorts of gadget options that can help their peace of mind while keeping tabs on their kids.
1 year ago
Dan Spindle, KSL TV

How to stream Utah college football games

Here's how you can still watch your favorite teams on the gridiron without the expensive satellite or cable package.
1 year ago
A US government agency issued an "urgent warning" for users of Peloton's Tread+ following multiple ...
Jordan Valinsky, CNN Business

Peloton Tread+ Owners Told To Stop Using Treadmill In ‘Urgent Warning’

A US government agency issued an "urgent warning" for users of Peloton's Tread+ following multiple dangerous incidents with the machine, including a child's death.
2 years ago
Matt Gephardt, KSL TV

Gephardt: Gas Company Resumes Disconnecting Delinquents, Vows To Help Customers

Dominion Energy decided in March to cease disconnecting those who didn't pay their gas bills, but that program only runs through mid-July.
2 years ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Big Businesses Are Secretly Rating Customers