Last month this column focused on business issues that a closed-loop solution (CLS) for marketing can solve, as well as issues to consider when choosing a CLS and/or CLS vendor. However, that's only half the process of closing the knowledge loop. The other, perhaps most important half, is actually implementing the CLS and reaping the enormous benefits it can provide. A properly implemented CLS can do more than enable you to increase your customer base. It can literally be transformative for your organization ­ taking it from competing in the market to dominating it.

Getting the implementation process off on the right foot is key. Just gathering the right components and integrating them ­ no matter how well they sync up ­ is not enough. A meticulous requirements-gathering process that produces clear, consistent, enterprise-wide data definitions is critical to any successful CLS implementation. Make sure the entire enterprise has the same expectations for the solution. For that, you must know up front what data you want to collect. The process should provide you with a complete picture of your business so that both your process and data models will actually reflect the flow of your business and the data captured by it.

Choosing a vendor who is experienced in implementations in your target market ­ and who will partner with you to transfer their knowledge to your organization ­ is also critical. There are differences between a B2B and a B2C solution. For example, B2B vendors understand the intricate timing and supply chain issues required to determine appropriate levels of inventory to meet large-volume, constantly changing customer demands. Conversely, B2C vendors have experience in building a CLS that smooths data from seasonal fluctuations that can skew revenue numbers and hamper forecasting and market analysis.

Systems integration, scalability and analysis capability are also crucial components of any successful CLS implementation. Make sure that if you choose a vendor who doesn't have a CLS with a total package (OLAP, data warehouse, etc.), you choose a team of vendors who are experienced in working with each others' products and will provide you with a seamless solution that can be scaled as needed. Integration must also be into the "bricks" as well as the "clicks." This means completely integrated and rationalized data from ERP systems, customers, products and suppliers ­ whether the data is from the clickstream or a physical location. There should be no knowledge gaps from brick to click. Finally, make sure the CLS you implement has the most mature analysis (read OLAP) capability available. This will enable you to sift through the quagmire of clickstream data, ferret out important transaction data and nimbly respond to an ever-changing market.

The benefits of a properly implemented CLS can be enormous. What's more, many of the benefits are tangible: they translate directly into a pumped-up revenue stream. Some of the benefits are also intangible; however, they are just as real as the hard-dollar perks.

Some of the more tangible, revenue-generating benefits include:

Identification and analysis of customer touchpoints. A properly implemented CLS will enable you to coalesce and analyze Web site, e-mail, phone, catalog and store data (if click and mortar), so that you can identify your best customers and see how they interact with your business. It will also enable you to build one-to-one customer relationships with those customers which is critical in the B2C environment. Sowing better customer relationships equals reaping higher ROI.

Product and supplier analysis. Analysis of return patterns may indicate product defects, thus enabling you to cull faulty products, improve customer satisfaction and reduce future merchandise returns. Sales volume analysis, of course, can help you keep hot products in stock and cross-sell complementary products. You can also leverage shipper or supplier information to minimize expenditures, because you will have detailed performance information as a base for negotiating the best deals with the best vendors.

Capability to perform more accurate data smoothing and market forecasting. A CLS enables you to perform data smoothing to see seasonally adjusted numbers and make better forecasts, which makes planning for lean times more than a "guesstimation." This is critical in order to be able to meet rapidly changing, often fickle, customer demands on time with the right products.

Intangible benefits include ­ via enhanced analysis capability ­ an increased understanding of the market so that you can plan for future growth and product development. Also, by closing the knowledge loop, CLSs remove the discord between business units that often act as adversaries with their own agendas rather than as a cohesive team. They generate a feeling of enterprise-connectedness and allow the entire organization to work toward common goals using the same information.

In the end, it's a matter of determining where you are versus where you need to be. It's about setting goals and achieving them using technology as a partner, not a tool. If your organization hasn't yet realized its full potential because of the inability to turn data into information, a CLS can go a long way toward helping you achieve the goals you set ­ increasing your chances of carving a big hunk out of a very profitable market.

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