For years, business school programs, management training sessions and business theory gurus have told us how important it is to be customer-focused. We have been told that successful companies are those that put the customer at the center of all efforts. How do truly customer-centric businesses get to be that way and how do they differ from those that struggle with this issue?

There are a number of factors that go into making a successful customer- focused organization. One of the key factors is greater customer intelligence and the effective use of that intelligence. Businesses have long been collecting customer data, mostly basic information such as names, addresses, order history and so on. However, turning the data into something meaningful has proved to be a more difficult problem.

Addressing the Customer "Problem"

While it may not be fair to call customers a problem, becoming customer-intelligent is a problem for most businesses. Most business intelligence solutions have focused on operational rather than customer issues. The heightened attention on customer relationship management (CRM) solutions and more recently on customer intelligence tools and techniques continues to demonstrate that customer focus remains a goal for many organizations.

The continuing drive to become customer-intelligent is evident in the types of problems businesses are addressing with their data warehousing and business intelligence (BI) solutions. According to Survey.com's recently published study of warehousing/BI users, at least half of the top business problems these solutions address are related to customers (see Figure 1). In fact, approximately 68 percent of the study's respondents cited CRM and communicating with customers as the key areas they will address in three years, up from about 50 percent currently and 40 percent in 1999.

Rank Current In 3 years
1 Financial analysis/reportig Financial analysis/reporting
2 Communicate or inform employees Customer relationship management
3 Customer relationship management Communicate or inform customers
4 Communicate or inform customers Communicate or inform customers
5 Category management Product performance analysis
6 Buyer behavior analysis & segmentation Churn analysis/customer retention
7 Churn analysis/customer retention Buyer behavior analysis & segmentation
8 Communicate or inform constituents Promotion/marketing campaign analysis
9 Product performance analysis Communicate or inform suppliers
10 Promotion/marketing campaign analysis Communicate or inform constituents

Figure 1: Business Problems Addressed by Warehousing/Business Intelligence Solutions

The drive to become more customer intelligent runs across most types of businesses. Several of the industries that show the most inclination to address customer issues are telecommunications, business consulting and IT. Each of these industries displays a strong propensity to direct solutions toward building customer intelligence, according to the study's results. Several other industries are starting to move strongly in this direction including banking/finance and healthcare. Within the healthcare sector, only 47 percent of survey respondents are currently addressing CRM utilizing warehousing/ BI solutions. That percentage will rise by nearly 22 percent over the next three years, the most of any industry sector.

Building the Ties That Can Bind

Becoming customer- intelligent doesn't mean that a business can simply collect and analyze data, as it is unlikely to lead to long-term and/or profitable relationships with customers. Businesses need to leverage customer and operational information and make it available externally. Solutions that provide easy information access, self-service and control promote a tighter bond/relationship between customers and vendors. Giving customers the opportunity to manage their relationship leads to greater satisfaction ­ customers feel more in control of the relationship and increase their ability to influence vendors.

About 31 percent of the respondents to the Survey.com study indicate they currently allow their customers to access their warehouse/BI solutions. This percentage is expected to double within three years. There will also be a significant increase in the number of businesses that allow prospects to access these solutions, thereby starting to build the ties that bind early in the customer relationship. Fewer than 10 percent of respondents currently allow access to prospects whereas in three years that number will jump to 33 percent.

Many of the reasons businesses and other organizations give for providing external access tie directly to customer relationship issues. Right at the top is improving communications, which was identified as one of the top business problems that businesses seek to address with their warehouse/BI solutions. Other reasons cited by study respondents include:

  • Providing account analysis, monitoring or management to customers.
  • Providing data for customers to add to their own data warehouses.
  • Providing self-service kiosks.

A Work in Progress

Concerns about understanding customers' needs, interpreting their behavior, improving communications and providing products and services customers will buy on a recurring basis will remain at the top of to-do lists for most businesses. While no one single solution, method or management style can transform a business into a customer-centric organization, becoming more customer-intelligent is a key element.

A number of BI vendors, including Business Objects, Cognos, Informatica and Sagent have all begun to emphasize a customer-focused approach with new CRM and e-CRM solutions. Through the integration of customer intelligence solutions with the more traditional operational BI solutions, businesses will be much closer to achieving their customer-centric goals.

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