Who the Client Really Is

Roberto Saviano grew up in a part of the world where people get killed often, and one day he decided to count how many had died since he was born. It made a long column. 1979: a hundred dead. 1980: a hundred and forty. 1982: two hundred and sixty-four. Then up and down: a hundred and fifty-five, a hundred and twenty-seven, two hundred and twenty-eight. In 2002, sixty-three. In 2004, a hundred and forty-two again. In 2005, ninety.

And just before that column Saviano makes a point that ought to hang over the desk of everyone who writes reports. To understand the economy of the Camorra, he writes, the number of corpses doesn’t matter. It in no way reflects the real picture of power. But it’s the most vivid illustration there is: the kind that reaches you through the stomach.

Saviano is honest that he’s measuring something other than what he wants to understand. You can’t weigh the Camorra’s power. You can count the bodies. So he counts the bodies, and remembers that what he’s counting isn’t power.

The Stand-In

That’s called a stand-in. When the thing you’re interested in can’t be measured directly, you measure something next to it that’s tied to it. Nearly all of business lives on stand-ins. Client satisfaction gets measured by repeat orders. The quality of the work, by the number of complaints. Interest in the goods, by the number of people who walk into the shop.

A stand-in is useful as long as you remember it’s a stand-in. Look at Saviano’s column. The quiet year of 2002, with its sixty-three dead, doesn’t necessarily mean the Camorra had grown weaker. Maybe the clans had simply come to an arrangement and had no reason to shoot. And the spike in 2004 is the Secondigliano war, which I’ve told you about already: power didn’t grow, it was being carved up again. Read the stand-in at face value and you’d decide the Camorra is strongest when it’s at war, which is to say when it’s doing worst.

On the other hand, the column has another virtue: it shows you the norm. A hundred to a hundred and fifty dead a year is, sadly, nothing unusual in those parts. Two hundred and sixty-four is no longer the norm; something has happened. The norm is what people are used to, and it’s against the norm that the unusual shows up. If you don’t know how many complaints you get in an ordinary month, you won’t notice the month when they double.

The best example of a stand-in I ever saw wasn’t in a book but in the cinema. In The Godfather, after the meeting of the heads of the five families, Don Vito tells Tom Hagen that Tattaglia could never have beaten Sonny on his own. It was Barzini, all along. How did he know? From who did the talking for Tattaglia at the negotiations. He had no direct proof. He had a stand-in: who speaks for whom. And the Don read it right, because he knew the norm, he knew how these men usually behaved.

Strangers’ Faces

At that same Palermo fruit market where the buyers dig to the bottom of the crate, Gambetta noticed something else. Demand is watched by the scarista, the man who sells the produce. He has no statistics on demand. What he does have is eyes. If he sees unfamiliar faces wandering between the stalls, facce sconosciute, he concludes that the goods are running short, and puts his prices up.

That’s a stand-in that works faster than any analysis. New faces at the market mean that something is missing where they come from. The scarista doesn’t need to know what exactly, or why. All he needs to know is that demand has gone up while everyone else still hasn’t noticed.

And by the way, every group of traders at the market, Gambetta writes, had its own secret price code. A finger in the mouth: twenty lire off. The “scissors” sign: two hundred. The name of a street, via Cavour: six hundred. The buyer saw the gestures and understood nothing. The sellers understood each other without a word. That’s about clients too: whoever knows more about them than they know about him drives the better bargain.

Circles

Now, about clients coming in different kinds.

Saviano describes how in Secondigliano cocaine went from a drug for the select few to a product for everyone. It was done by offering the goods in different grades of quality: something for every pocket. According to figures from a social centre that Saviano cites, ninety per cent of the buyers are students and working people. Cocaine stopped being a pleasure and became a prop for getting through a long working day.

At the dealing spot by the Blue Houses, a gram cost twenty-five to fifty euros, when it usually costs anywhere from fifty or seventy up to a hundred or two hundred. And there appeared, Saviano writes, what are called circles. A circle of doctors, a circle of pilots, a circle of journalists, a circle of civil servants. The trade there looks less like a crime than like a friendly exchange, like housewives selling face creams and vacuum cleaners to their friends. No dealers in tracksuits in the alleyways. Our kind selling to our kind.

I’m not telling you this so you’ll admire it. It’s a filthy trade, and it destroys people. But it’s built on a rule that works in any business: you sell to different people in different ways. A doctor won’t go into an alleyway. A student won’t pay two hundred euros. One product, different prices, different channels, different words. That’s called segmentation, and the Camorra mastered it before a good many banks did.

Whose Client Is It

Segmentation has another side as well, which Gambetta describes in his chapter on collusion. A market can be divided among sellers in three ways. By territory: the north for you, the south for me. By turns: like taxis at a station. And by client. The last way, he writes, is usually the best.

Here’s how it looks. A Mafia family puts money into a wholesale warehouse and advises shopkeepers to buy there. Buy from A and you’ll be safe; just tell A that I sent you—that, more or less, is the message. If the scheme works, A and B stop poaching each other’s customers. And if someone breaks the agreement, the penalty is clear. One witness said that the brother of a man who had taken it upon himself to sell building materials to someone else’s client was savagely beaten.

Gambetta draws a conclusion from this: clients become part of the supplier’s property. They can be handed over, sold, swapped, like any other possession. In New York, according to one researcher, a whole rubbish-collection business ran on this: more than a hundred thousand clients, divided among three hundred haulers.

You and I don’t need to beat anybody up to grasp the main point. A client is an asset. Every client of yours has a value: how much he brings in a year, and how many years he stays with you. Work that out, and you’ll see that some clients are worth a whole neighbourhood, while others cost you more than they bring in.

To Each His Own

One last thing: sometimes a segment is one man.

Gambetta writes that the way Mafia protection was paid for depended on rank. A director who made films in Sicily said that only low-ranking mafiosi asked for cash to protect a shoot, from half a million to two million lire in 1986. The bosses preferred simply to be acknowledged, and then, in time, to ask for a favour. The small man needs money today. The big man needs someone who will owe him tomorrow.

Don Vincenzo kept in his head, and later in his notebook, what every cook needed. One fried everything in the same oil and only took the big tins. Another worked in a kitchen the size of a wardrobe and asked for smaller tins, because there was nowhere to put a big one. A third couldn’t stand deliveries before ten in the morning, because until ten he was fighting with his wife. The Don didn’t invent a separate product for each of them. The oil was the same. But it was brought to each one the way that suited him. It cost us very little, and it kept the cooks for years.

The Bottom Line

When you can’t measure what you need, measure what’s next to it, but remember you’re measuring a stand-in. And when a segment is one man, remember what oil he fries in.