Shari would like to thank Dan Fisher for his contribution to this month's column.
The customer is king. The customer is always right. Remember, the customer pays the bills around here. When you think about it, there is a lot of truth in all of these clichés about customers. Regardless of the size of your organization or the industry that you are in, without the customers, there are no sales, there are no revenues and there are no profits.
This is the reason companies invest enormous amounts of time and resources in customer relationship management (CRM). The equation is simple: When you implement capabilities that help you learn more about your customers, you retain existing customers, attract new customers, can offer new products/services, can advertise more effectively and can ultimately garner additional profits. The key is to capitalize on the full potential that CRM and customer insight capabilities offer; that is, use and not just gather customer data.
In our last column, we discussed how 360-degree insight enables C-level executives and organization leaders to integrate and analyze information from their organizations' siloed competencies. In the next two columns, we focus on the customer silo and an integrated view of the customer. Key customer metrics, trends and forecasts, when merged with metrics from other functional silos, affect decision making and exemplify 360-degree insight. The challenge with each siloed process is closing the loop that is, applying what you have learned to make strategic decisions that impact your organization's competitive advantage.
Integrated View of Customer
Accenture often uses the term "integrated view of customer" to describe business intelligence processes related to enabling customer insight such as data integration, data standardization, enterprise reporting and business analytics.
To integrate customer information, relevant data must be captured and merged from several different types of systems:
Customer touchpoint systems such as point of sale, call centers, the Web and direct mail,
Back-office systems such as general ledger and accounts receivable,
Internal assessment systems such as segmentation scores, propensity scores and risk scores, and
External data provider systems such as credit histories and demographics.
Customer information is typically integrated and standardized using extract/transform/load (ETL) tools, enterprise application integration (EAI) tools or enterprise resource planning (ERP) packaged software.
Before the data from these various systems can be integrated and merged, however, the customer must be defined and assigned a unique customer identifier. At first, this might sound simple, but when organizations actually begin to define their customers, things can get tricky. For example, while defining a customer at a recent client organization, six individuals provided the following very different definitions: accounts, individuals who can have multiple accounts, households that can be made up of multiple accounts and individuals (not all individuals may be on all accounts), companies, departments within companies, and individuals within departments and within companies.
After you define the customer, you can define rules for matching customers with varying definitions across data sources. There are several vendors with software packages that provide solutions for such customer identification services. These services range from packaged routines to tools for building custom services to outsourced solutions. Many factors should be considered when choosing a customer identification solution, including cost, customer definition, rule complexities and the number of disparate data sources.
Unless your organization has one store, one system and/or one client, you must integrate and standardize your customer data before you can create reports and conduct customer analysis. A complete view of the customer allows an organization at all levels to better understand its customers and empowers individuals to act in the organization's best interest. Store managers might receive a report identifying their 200 most profitable customers and can educate employees as to who should receive special treatment. Risk managers might mine data to identify the customers who are most likely to default on a loan and implement screening procedures to improve credit approval. Marketing managers might mine data to create customer segmentations and propensity models for customizing and targeting sales campaigns. C-level executives might receive customer trending reports and initiate ROI analysis reports to drive strategic change initiatives.
Most organizations capture and integrate some customer information to learn about their current and potential customers and to make astute business decisions. Far fewer organizations, however, actually close the loop by tracking and feeding the results of their decisions back into their customer relationship management application. You must close the loop to acquire an integrated view of customer and gain true customer insight.
There are several challenges inherent in closing the customer loop. In our next column, we will discuss the following issues, including how they impact an integrated view of the customer and what techniques can be used to address them:
Consumer privacy and regulatory restrictions.
Managing internal source systems and external data vendors.
Customers are the lifeblood of every organization and an integrated view of the customer is critical to 360-degree insight.
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