Last month's column discussed the importance of customer intelligence (CI) and outlined the four stages of a customer intelligence road map. This month's column discusses the details of the first step –­ customer intelligence infrastructure ­– and explains its importance as the backbone of any comprehensive customer intelligence program.

A CI infrastructure is critical to the success of any customer intelligence initiative. It is the most mature of the four stages of the customer intelligence road map and, consequently, the stage that is most easily recognized.

A CI infrastructure provides the base analytical support for all aspects of a company's customer relationship management (CRM) initiative, including both tactical, day-to-day business processes as well as long-term strategic initiatives (see Figure 1). It enables companies to:

  • Support operational business processes around CRM (sales, service and marketing) such as pipeline reporting, customer issue resolution analysis and campaign performance.
  • Standardize terms, definitions and business rules across the enterprise.
  • Create ad hoc reports for use in answering the question or issue of the day/hour.
  • Distribute reports and information on a timely basis and across different delivery vehicles such as e-mail, print, standard online viewing or the intranet.
  • Perform exploratory analyses to uncover customer insight and understand the needs, wants and behaviors of customers. These tasks include customer segmentation as well as predictive modeling exercises such as campaign response modeling or prospect identification and prediction.

Figure 1: CI Infrastructure Analytical Support

A robust CI infrastructure consists of foundation architecture components such as data warehouses, data marts, exploration warehouses, ad hoc reporting, report distribution, data cleansing and integration and operational data stores (see Figure 2). This complex architecture must support four key functions:


Figure 2: CI Infrastructure Functions

Process Monitoring. CRM initiatives such as sales force automation transformations, call center consolidations and marketing automation all change the standard way certain functions operate within a company. The CI infrastructure must inform line managers how quickly, how deeply and how robustly the adoption of new processes is occurring.

Additionally, the CI infrastructure captures information regarding the value (speed and efficiency) of the new processes to ensure companies continue to reap the benefits of enhanced CRM processes. New processes may be aimed at customer service and could include issue resolution, a standard sales methodology or decreased time to market for marketing programs.

Corporate Monitoring. As CRM becomes less of an initiative and more a part of the overall corporate strategy, certain CRM metrics become company-wide key performance indicators (KPIs). Metrics such as segment performance, retention, customer conversions or customer satisfaction reporting that were solely used by CRM practitioners are now viewed at the corporate level.

The CI infrastructure must continually inform the overall organization of its performance relative to expectations and budgets.

Functional Monitoring. Sales, service and marketing each have specific goals and objectives that are aligned with an overall corporate strategy. For example, a company's marketing function may want to understand campaign effectiveness, its service function may need to understand call frequency and first-call resolution for high value customers, and its sales function may need to understand its funnel and conversion rates.

The CI infrastructure enables the company to understand how these functions are performing, the reasons behind their performance and what opportunities exist to improve future performance. In addition, it enables each of these functions to create reports and perform analyses that show alignment with corporate strategies, provide understanding about how their function influences corporate performance and explain specific performance anomalies (good and bad) to their management teams.

Customer Insight. A CI infrastructure presents a method for uncovering trends in customer behavior, buying patterns, product performance and promotional performance.

Though the complexity and amount of information will differ based on business models (business to consumer vs. business to business or consumer packaged goods vs. manufacturing, etc.), these sets of systems and tools allow analysts to perform simple customer reporting (retention reports, customer counts by specific categories, etc.), multidimensional analyses (slicing and dicing across various dimensions that describe customer and product performance) and predictive analyses (segmentation, response modeling, acquisition modeling, etc.).

Customer insight must help organizations uncover the value in the customer base, how they react to different stimuli (do disease education materials help decrease insurance costs?) and what channels seem to be the most used and preferred.

Deploying a CI infrastructure is not all about technology. The environment must also facilitate organizational processes to maintain and support the environment over time. Often disregarded or considered "touchy feely," change management aspects of decision support have far-reaching benefits.

Many companies have not fully realized the benefits of a CI infrastructure because their employees misuse the system, don't realize the potential or the vision, or are not trained correctly.

It is important to understand the following organizational change issues when implementing a CI infrastructure:

  • What business processes are impacted or supported by having accurate, timely information? For example, the sales process may be streamlined or new tasks may be inserted into the sales methodology to help the sales force target or evaluate opportunities better with more robust information.
  • Are people adequately trained in the new technology? Training is critical to a self-service reporting environment because it creates a groundswell of champions who find value in the new capability.
  • Do our people understand the information in the new data repositories? CI systems provide one version of the truth; therefore, some definitions of certain concepts or fields may need to be retired or redefined. For example, helping newspaper circulation departments understand how subscription enrollment and cancellation look from a data perspective will be critical to adoption of a decision support system.
  • Do we have upper management support? Executive management must continue to endorse the new system. The balance between incentive programs and management mandates must encourage proactive use of the new capabilities.
  • Do we have the correct organization to support the system moving forward? Data quality and system loads must be monitored every day. Users need someone to call for help in creating reports and someone to answer basic questions about the data itself. Furthermore, development priorities and enhancements must be set.

The customer intelligence infrastructure is an important stage of the customer intelligence road map as it is leveraged during all three higher stages ­– business performance management, decision enablement and business activity monitoring.

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