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Customer Intelligence: This term has certainly caused a buzz in customer relationship management (CRM) circles. But what hasn't caught on in corporations is a realization of what it really takes to gain customer intelligence.
Even with a full understanding of what customer intelligence entails, however, technology has yet to meet its requirements. In the last two years, software has developed in the right direction. But this software needs to mature significantly before it will truly support customer intelligence efforts.
Our own experiences as consumers help us all relate to our customers' tribulations. Contact through various touchpoints (such as the Web, telephone, or store) with service providers (telephone companies or banks), retailers (apparel or electronics), or travel industries (airline or hotel) often frustrate us, no matter whether the vendor initiates the contact or we do. True customer intelligence can reduce this frustration, thereby gaining customer loyalty.
To fully benefit from the concepts of customer intelligence and to enhance customers' profitability by guiding their behavior, you need to build a strong information foundation that is enhanced with analytics.
Customer Opportunity
Corporations face both cultural and business challenges in streamlining customer-centric business processes and activities. For example, the business processes and software infrastructure should support cross-organizational goals at every step of the customer experience. Traditionally, however, corporations have managed separate organizational structures as business units or departments (such as customer service, sales, and marketing), each of which has its own metrics to measure and benchmark its behavior.
This conventional method does not support the customer, who probably engages in many processes with several business units to acquire products or services. Figure 1 models the four general steps of a customer experience, from the perspective of the vendor's activities: market, sell, deliver, and service.
Neglecting to address the whole customer experience can thwart business objectives. For example, organizations often focus on maximizing revenue potential with existing customer segments through up- and cross-selling. Traditionally, organizations would look to marketing to use campaign management (or now, marketing automation software) to lead the effort of optimizing customer profitability. Unfortunately, this approach alone will not achieve the objective; companies must optimize all customer touch-points, such as customer service and sales, through traditional and electronic channels of interaction.
Getting the Most From Customers
When planning your customer intelligence strategy, keep in mind the three steps to cultivating the most profitable customer relationship possible:
1. Understand the customer.
2. Optimize customer interactions.
3. Leverage customers as assets.
Understanding customers and their touchpoints with the company lets you establish a common view of customer activities as they align with business operations. Create a centralized definition of the customer and build customer experience models that align information the business gathers to the activities and touchpoints with which they're associated in the real world.
Once you build this foundation, you can apply analytics to customer information. That analysis generates a set of metrics you can then use to measure, monitor, and benchmark customers. This activity helps you figure out how best to apply organizational resources to the processes supporting customers, through existing operational applications.
Customer-centric analytic application vendors (such as Broadbase Software Inc. and Siebel Systems Inc.) or BI tool companies (such as Cognos Inc. and BusinessObjects) developed products to help organizations measure customer activities within business units such as sales, service, or marketing. Although BI tools have provided the information access and delivery capabilities, companies have had trouble applying these tools to business processes. These tools also lack an intuitive and self-sufficient user interface, necessary for broad deployment.
A new generation of applications (such as the ones by Ithena Software Inc., ThinkAnalytics Corp., and Quadstone) has begun to focus on helping companies manage customers and segments, an important part of understanding customer behavior. This method can serve as the foundation for the entire CRM area of responsibility, from sales to service to marketing.
The wave of analytic application releases in the last two years was a response to the unmet need for business process analysis, but unfortunately these releases have mostly focused on measuring business unit performance. Although we have recently begun to see innovation in analytic applications, vendor offerings have fallen short when it comes to helping us understand customer interactions along the customer experience.
But this alignment of information, however poorly supported by vendor offerings, is critical to gain insight into customer behavior and analyze the efficiency of touchpoints. To understand the customer, you will need to integrate many technologies together and therefore will have to assess the openness and extensibility of existing vendor offerings.
  
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