In her research as a marketing modeler, Professor Eva Ascarza focuses on understanding customers—and predicting, in particular, who will be a good one and how best to retain them. Without customers, obviously, there is no business. That could also be the tagline for Ascarza’s elective course, Managing Customers for Growth. She designed it for students who want to grow their own business, help others grow theirs, or be better able to evaluate growth trajectories as a potential investor.

Ascarza developed “Madrigal: Conducting a Customer-Base Audit” as a tool to teach students how to mine valuable insights from a company’s transactional data. Unlike the more traditional field cases, which have multiple exhibits drawn from interviews and hinge on a leader’s dilemma, Madrigal is a short-format case. It centers on the data, taken from a real firm whose name has been disguised, and is taught in a workshop style: Ascarza gives the students several slices of data from the historical transactional records of the disguised retailer and asks them to open their laptops and take a few minutes to analyze it. “I show them a table, and then another table, and then another table, and the amount of insights that we develop collectively is very, very rich,” she says.

A customer-base audit is not about knowing the customer in a traditional market-research sense, Ascarza explains, but rather looking at dynamics of historical data to understand how customers differ in their buying behavior. That, in turn, can reveal insights about how healthy the customer base is and how it has evolved over time. Among the takeaways, Ascarza says, is that assuming there’s an “average consumer” is an unprofitable and inefficient approach to grow a business.

Origins
The idea for this case struck Ascarza when Bruce G. S. Hardie, a research collaborator, asked her to review an early draft of The Customer-Base Audit, the 2022 book he coauthored with Peter Fader and Michael Ross. “As I read the very first version of this book and was providing comments, I thought there would be a fantastic learning opportunity for a standalone session to go with it. So I said, ‘Let me create a juicy, 80-minute discussion about this,’" Ascarza says.

The Rise of Tactics
Unlike a traditional case, the learnings in Madrigal are not dependent on context. “It doesn’t matter if it’s a retail business or a SaaS B2B business or an app or industrial product—you name it,” she says. This case’s aim is to equip students with the skills to look at a set of summary tables and derive a diagnosis of the company’s growth prospects from them. “For example, are you acquiring and retaining the right customers? Are you retaining them as well as you did before? Every student who thinks about organic customer growth should be able to relate dynamics of a customer base to a diagnosis of growth and a potential hypothesis and action,” Ascarza says.

Data's Evolution
“The toughest challenge in case writing is deciding what to show and what to tell. The decisions should be based on what you want students to grapple with and analyze for themselves. Since we want them to focus more on the implementation of a new performance system, we tell them what the system is and show them how they implement it—that is, the choices Tom and his colleagues make in rolling out the new system and their impact. In analyzing the how, the students also glean insight into how the move to OKRs is more aligned (or not) with building an innovative culture.”

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