Customer intelligence management has been referenced but not yet differenti- ated from customer relationship management. Because the two are not the same, they will now be discussed. Figure 17.1 helps illustrate the differences and will aid in our understanding of how business software tools facilitate customer- focused processes:
Customer intelligence (CI).This is the internal, company-facing reposi- tory of data used to determine and analyze customer segments and then used to formulate strategies in order to satisfy and retain each customer segment.Analysisis the key word. CI is an internal process for truly under- standing who your customers are and what they want from you. CI antici- pates their needs. The results of CI are then put into action by CRM. CI leverages data warehousing and data mining tools for data extraction, reor- ganizing, and analysis.
Customer relationship management (CRM).These are the operational methods and tools, such as marketing campaigns, to interact with cus- tomers and new sales prospects regardless of the communication channel.
CRM and CI bi-directionally feed each other input data in a continuous figure-eight cycle, as illustrated in Figure 17.1. Operational CRM gener- ates transactional data that feed input to CI (as well as do other systems).
Analytical CI then converts this data into actionable business information that becomes the input to operational CRM for further customer interac- tions or communications.
An objective for operational CRM is to ensure that customers enjoy con- sistently good experiences to increase their loyalty and the likelihood that they will purchase again from you—and possibly refer your business to oth- ers. That is, the goal is to forge long-term relationships with customers by consistently delivering exceptional service and tailored products for repeat business and referrals. Consistenttreatment of customers is a key descriptor because customers can become finicky and impatient with one poor experi- ence (i.e., below their ever-rising expectations), causing them to explore alter- native providers—competitors.
The “Start Here” symbol at the bottom of Figure 17.1 represents the initial 158 INTEGRATING PERFORMANCE MANAGEMENT WITH CORE SOLUTIONS ccc_cokins_17_151-172 .qxd 1/14/04 10:30 AM Page 158
analysis of customers. This presumes that much customer data has already been collected and is easily data-mined. The arrows reveal the iterative process cycle, shown in the shape of a figure eight. Much of the customer data in the back office CI (analytical CRM) side is typically captured in the right-side operational CRM. This explains why the figure-eight loop operates as a continuous cycle.
The cycle starts with analyzing customer data to synthesize and distill pat- terns. After that, marketing analysts formulate strategies that are tailored to the various microsegments of customers and are obviously intended to motivate cus- tomers to continue purchasing the supplier’s goods and services. The next steps involve mobilizing the organization to execute the strategies; this can range from new product development programs to new value-added services that support existing products and service lines.
The process cycle next crosses into the front-officeCRM domain, where the customer is touched and feedback about their responses is collected. Powerful sales force automation, marketing automation, and customer service tools are ap- plied here:
Sales force automation.Think of this as a salesperson’s traditional busi- ness card Rolodex, contact directory, and sales pipeline forecasts, but now completely automated with much more data. Sales force automation CUSTOMER INTELLIGENCE AND RELATIONSHIP MANAGMENT 159
Gathering Data storing
Processing Customer Intelligence
Accessing Organizing Modeling Analyzing
Sales Force Automation (SFA)
Customer Relationship Management
(CRM)
Marketing Automation (MA) Customer service
Interact
Customer experience Customer
behavior
Gather &
analyze customer
data Adjust
strategies Customer
Take actions
Supplier
Start Here
Fine-tune
Figure 17.1 Analytical CI and Operational CRM ccc_cokins_17_151-172 .qxd 1/14/04 10:30 AM Page 159
helps manage the life cycle of every sales opportunity to its success- ful conclusion. It allows for managing the sales pipeline and funnel to better forecast when actual sales events will occur, remove administra- tive work by automating routine tasks, and empower a sales team with call-tracking history and relevant intelligence about prospects and customers.
These tools also include contact management, proposal management, quote generators, and sales lead and order tracking. When combined with a CI (analytical CRM) tool, this provides a single gathering point to enable a unified view of each customer for all employees. Conversely, it also pro- vides each salesperson (e.g., a bank loan officer) an automated book of their accounts.
Marketing automation and optimization. These tools aid in profiling customers based on dozens of characteristics (e.g., preferences, buying be- havior, purchasing frequency, recency of purchase, and demographics).
The tools are not based on marketing theory but rather on actual customer behavior, as research has demonstrated that good indicators of a customer’s future behavior is their past behavior and their profile. After the CI formu- lated data has been collected, marketing automation tools then push out each campaign, survey, or contest to customers and prospects, as well as re- ceive and analyze the responses. With advanced marketing automation tools, customer responses can be anticipated. Personalized messages, po- tentially with offers or incentives to purchase or act, can be immediately pushed back to the customer. Marketing automationtools go a step further by maximizing profit by balancing the customer’s likeliness to purchase with the organization’s ability to deliver, including its channel’s capacity constraints or its operation’s capacity or planned offer inventories. These tools are also foundational to customer loyalty programs, such as airline frequent flyer programs.
Customer interaction centers. Call centers are today’s factories for ser- vicing customers. Everyone has received unsolicited marketing phone calls or toggled through an automated answering system to receive online help service from a person. With the addition of a CI (analytical CRM) tool, call center employees are enabled to not only interact more effectively with a customer, but to also expand their service call into a sales call raising the top line. As mentioned earlier, leveraging and finessing a customer-initiated inbound interaction to push a campaign message has been recognized by marketers as being substantially more effective than traditional outbound marketing campaign solicitations.
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These tools, when combined, provide for interactions through all communi- cation channels—e-mail, call centers, mailing brochures, advertisements, newsletters, and so on. These are all touch pointswith customers and prospects.
Every channel can engage the customer with a dynamically personalized and compelling experience by leveraging marketing, sales, and customer support.
Each interaction is an opportunity to gain knowledge about customer prefer- ences—and to strengthen the relationship. I touched earlier on the perils of cus- tomers and sales targets receiving inconsistent messages. The problem is that each of the communication channels may unknowingly use their own customer intelligence data to interact with a customer without realizing that a different message may be being delivered to the samecustomer via another communica- tion channel. A common CI system provides the foundation to integrate with and feed all of an organization’s different communication channels. This then provides a consistentpersonalized message from the receiver’s view—consis- tent across all channels.