In 2005, Aberdeen surveyed companies across industries to benchmark how customer intelligence was managed, analyzed and applied toward profitable growth and found that 74 percent of best-in-class firms are focusing on customer intelligence as a strategic initiative and have embarked on creating a culture of customer centricity as a means to understand and respond to high value customers in order to drive profitable growth.
Between January and March 2006, Aberdeen researched companies that currently leverage customer intelligence toward business growth. Ten companies were selected as winning examples exemplified through success stories, two or more in each of these categories: managing customer data, analyzing customer data or applying customer data
Pressure to Leverage Customer Intelligence
In highly commoditized markets, a key differentiator is the customer experience or customer service level companies provide. Purchasers know that the same or very similar products are available from numerous vendors all competing for the same market share and/or share of customer and, as a result - expect more value.
In parallel, providers of goods and services are focusing on building higher value relationships with their best customers (see Figure 1) as a strategic initiative designed to grow revenues and to reduce customer churn rates as well as operational costs. Most marketers know that it costs nearly 70 percent more to win back a customer who churns - than to keep the customer satisfied in the first place. They also know that shrinking budgets will not allow them the luxury of losing that customer in the first place.
Figure 1: Top Pressures Driving Companies to Improve Customer Intelligence
Focus on High-Value Customers
Defining and identifying one's most profitable customers as well as gleaning greater understanding of which products, enhancements or value-added services would most likely gain a greater share of these customers' wallets is an important growth strategy for many companies. In choosing to foster a culture of customer centricity as a corporate priority, success strategy winners identified profitable growth, rather than growth through aggressive customer, product or business unit acquisition, as the reason to better understand and respond to high-value customers (See also, Customer Intelligence: Converting Data to Profits, December 2005).
Challenges Companies Face
Leaders confirmed they are addressing challenges from a technology, process and organizational perspective. They recognize that no one silver bullet exists, but that a more holistic, process-driven approach that utilizes analytics, data integration/verification technologies and services, combined with organizational acceptance, yielded measurable results.
Figure 2: Top Challenges in Customer Intelligence Performance Improvements
Key Enablers
Numerous tools, applications, solutions, processes and/or third-party service providers and external data sources were engaged in support of these customer intelligence success stories. While one or more main technology enablers or service provider are highlighted in each story, the performance improvements reported were the result of a total solution - which required integration with multiple legacy systems. For a complete copy of the report, download: http://www.aberdeen.com/summary/report/benchmark/RA_CIMSS_LA_2851.asp.
Leslie Ament is an experienced consultant, researcher and presenter. She advises clients on business issues relating to precision marketing, customer data management and customer relationship management strategies. She may be reached at lament-ruder@att.net.
