1. technology and computing
2. enterprise technology
3. customer relationship management

Patricia Seybold Group
E-Business Consultants & Thought Leaders
How to Provide Customer
Intelligence
Getting to Know and Serve Your Customers Better
By Lynne Harvey
This report is a reprint from the July 13, 2000 Patricia Seybold Group's Customers.com® Strategic Planning Service.
It has been reproduced here as originally published.
Customers.com® / Overview
How to Provide Customer Intelligence
Getting to Know and Serve Your Customers Better
By Lynne Harvey
July 13, 2000
NETTING IT OUT
THE CUSTOMER’S EXPERIENCE COUNTS
To be successful, every company needs to understand its customers well. That means going
beyond the basics—who they are, where they
live or work, and what they’ve bought. It’s even
more important to understand what each customer wants in the context of her situation at a
particular point in time. And it’s essential to appreciate the way each customer wants to interact with your e-business at every touchpoint.
The same customer may have a different set of
expectations when she’s interacting by phone
than she does on the Web, for example.
For many people, gardening is a year-round vocation. Take Audrey, for example. No matter what
season it is, she’s always working on her flower garden. From January through September, Audrey
spends months planning. For the past 25 years, she’s
planted white narcissus, yellow tulips, and grape
hyacinth in early spring; blue dahlias and white daisies from mid to late summer; and purple and white
mums in the fall. But she also tries a couple of new
kinds of flowers every year. Last year, it was the
white poppy. The year before it was purple aster.
Ordering from The Garden Store is one of the
rituals in her life. When the catalogs arrive after
Christmas, Audrey gets her pencils and planning
board out and checks off the bulbs she wants to order, carefully comparing her notes from the previous
year, noting which flowers bloomed and which
didn’t come up.
Two years ago Audrey’s life was turned upside
down. Her husband Bob received a promotion at his
job on the condition that he relocate from their home
in Delaware to Bob’s company headquarters outside
of Kalamazoo, Michigan.
In spite of all the things Audrey needed to do to
move, she e-mailed The Garden Store to let them
know that she was moving to Michigan. This was
two weeks before the moving van was scheduled to
arrive at her house. Much to her surprise, the folks at
The Garden Store sent her an e-mail the next day,
letting her know that they had updated their records
to her new address. They also attached a file to the email containing a list of all the flowers Audrey had
ordered over the past two years with a chart that
showed when these flowers could be planted in
Michigan and suggestions for other kinds of flowers
that thrived in the more northern, zone 5 climate.
The document also contained tips for saving and
Customer intelligence facilitates this kind of
context-specific insight. In contrast to other
forms of business intelligence, which attempt to
assess the profitability and efficiency of an ebusiness’ operations, customer intelligence focuses on gathering and analyzing information
about customers to deliver a better customer
experience and to increase customer yield.
In this report we present a conceptual framework for understanding customer intelligence.
We show that customer intelligence is part of a
holistic process that not only gives insight into
who each customer is and what that customer
needs but ultimately enables companies to successfully build long-term relationships with their
customers.
Customers.com is the registered trademark of the Patricia Seybold Group, Inc. • 85 Devonshire St., 5th Fl., Boston, MA 02109 USA • www.psgroup.com
2 • How to Provide Customer Intelligence
transplanting some of the existing flowers in Audrey’s garden.
Needless to say, Audrey was thrilled! Not only
could she save many of the treasured plants in her
garden, but now she knew which kinds of flowers
would thrive in her new home. The Garden Store
told her that if she placed an order, they would mail
the bulbs to her new house as soon as she arrived.
The Garden Store understands what it takes to
build loyalty. By providing personalized service and
understanding its customer,
the Garden Store just secured
Audrey’s loyalty.
Three Steps to Knowing
Your Customers
about understanding not only how economical it
is to retain the customer but also how profitable
the customer will be over her lifetime. This can
be difficult to do, but it is the main ingredient
that enables companies to understand their customer relationships beyond segmentation models.
Providing the Services and Solutions to Fit
Each Customer’s Needs. Personalized service
is all about providing the
exact product and service at the right time so
The key to achieving success
that the customer is dyfor any e-business lies in
ing to buy!
•
providing just the right offer
to keep customers coming back and
knowing your customers better than
you’ve ever known them before.
This report is going to
show you how to know your
customers the way our fictional Garden Store does. The
key to achieving success for
any e-business lies in providing just the right offer to
keep customers coming back and knowing your
customers better than you’ve ever known them before. Knowing your customers gives you the insights
that lead to providing the right products backed by
the right services—products and services that your
customers value!
Getting to know your customers sounds so obvious. But it isn’t easy. To do it you need to rethink
the way you measure your business. More important,
you have to rethink the way your company attracts
new customers, keeps its customers, and makes its
customers profitable. These can be achieved by:
•
Identifying Potential and Current Customers.
In traditional marketing, customers were identified through demographic models and broad
market segments. In today’s world of emarketing, companies are still trying to place
customers into segments. However, these segments have become more granular. Customers
are now identified, not by their zip code but
based on what they like, what they’ve bought,
and how they want to be treated.
•
Recognizing the Value that Each Customer
Brings to Your E-Business. Recognition is
Performed with care,
each of these objectives can
help you acquire, develop,
and retain meaningful relationships with customers
(see Illustration 1).
What Is Customer Intelligence?
Customer intelligence focuses on gathering and
analyzing information about customers to deliver a
better customer experience and to increase customer
yield. It’s the process for effectively understanding
your customers—understanding things like who they
are, what they need, and how valuable they are to
your company—and then applying this insight to
effectively meet and exceed your customer’s expectations.
Companies that excel in gathering and using
customer intelligence can attract and retain more
customers, increase their level of profitability per
customer, and increase customer satisfaction. In our
example about the Garden Store, this hypothetical
company understands the value of its customers by
collecting and analyzing customer information. Even
with its large customerbase, The Garden Store
knows what kinds of plants each of its customers has
selected over time, which plants they buy on a seasonal basis, and whether they buy plants as gifts or
for their own gardens. The company also knows
each customer’s lifetime value by tracking each
customer’s transactions, from the first purchase to
the present. As a result, it has been extremely effective at providing services and products that can meet
© 2000 Patricia Seybold Group’s Customers.com®
Overview • 3
Lo
ya
lty
The Goals of Today’s Organizations
uis
it
Ac
q
Recognize
ion
Str
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teg
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Act
Identify
© 2000 Patricia Seybold Group, Inc.
Illustration 1. To succeed in business today, companies need to get to know their customers better than they ever
have before. To do this effectively they need to identify potential and current customers, recognize the value of
their customers, and provide the right mix of services to each of their customers.
its customers’ expectations. As we saw in Audrey’s
case, the company was able to suggest not only what
kinds of plants Audrey should order for her new
house but how she could save many of the plants in
her existing garden. This kind of insight comes from
knowing your customers really well. It doesn’t come
from sales forecasts and demographic marketing
models!
A FOUR-STAGE FRAMEWORK FOR
DELIVERING CUSTOMER INTELLIGENCE
Intelligence, in the psychological sense, is more
than just facts and figures. It is more than IQ, the
numeric quotient of brainpower. Intelligence is the
ability to make sense of the world around you and to
act on this understanding in an effective manner.
Customer intelligence is derived from understanding information about a customer and applying
it in a useful manner. It is the ability to understand
© 2000 Patricia Seybold Group’s Customers.com®
your customers and to translate this knowledge into
effective strategy and action.
Customer intelligence is a process with four
stages:
1. Gathering customer data
2. Analyzing data
3. Formulating strategy based on the analysis to
recognize customer value
4. Taking action based on the strategy
This simple framework may seem obvious, but
many companies don’t put it into practice or else do
an incomplete job. All too often, companies don’t go
far enough in using these four components; most
tend to focus on the first two elements (data gathering and analysis) but don’t follow through by creating a strategy or acting on it.
4 • How to Provide Customer Intelligence
Not a Technological Endeavor
Many e-businesses confuse the application of
technology solutions with the customer intelligence
process. Technology solutions can automate many of
the steps in this framework, but they are not a substitute for the process itself.1
•
Products that customers frequently buy together
(such as fishing poles and mosquito repellant or
picnic baskets and lawn chairs)
•
Observation of click-stream/browsing behavior
•
Observation of purchase/action behavior
Much of this data is available from Web and call
center tracking tools and/or from a customer contact
Identifying customers entails gathering different
system that allows customer service agents to capkinds of information that can help you determine
ture anecdotal information on the fly. Some of this
who the customer is and what
information can also be gathered
context he’s in and storing this
by applying empirical data gathinformation in such a way that it
ering techniques such as survey
Intelligence is the ability
can be easily accessed by different
and focus group data and using
to make sense of
people within your company and
campaign management and/or eby the customer himself.
the world around you and
mail marketing tools that have
What kinds of data do you need
to act on this understanding mechanisms for deploying and
to gather about your customers?
creating electronic surveys.
in an effective manner.
Of course you’ll start with cusUltimately the data you collect
tomer profile information—name,
will help your organization know
address, job title, company name,
not only who your business and/or
phone numbers, and roles—as well as transaction
consumer customers are, but what they need, and
and call-log histories. In addition you’ll want to start
what your company can provide to them at any
gathering other kinds of data that help define how
given moment. Personalized service can only be decustomers behave and how they prefer to interact
livered by remembering everything that has hapwith your company. This information includes:
pened to the customer within your organization, understanding a customer’s preferences within specific
•
Customer service history
scenarios, and building on that understanding of past
behavior and transactions to help anticipate the cus•
Transaction history
tomer’s needs in the context of any given moment.2
STAGE 1: GATHERING CUSTOMER DATA
•
Interactive survey data
•
Directed question responses
•
Data from interactive personalization tools (like
configurators, search engines, planning tools,
and gift registries)
•
E-mail response data
•
Product registration information
A Word on Privacy. Of course, issues of privacy
and trust raise their heads when gathering customer
data. At the Patricia Seybold Group we believe that a
permission-marketing approach is a prerequisite for
gathering customer information. Get the customer’s
permission and buy-in every step of the way. Always offer something in exchange for the information you seek. And make sure that the customer can
view and modify the information you’re collecting
about him. If a customer perceives that you have
betrayed her trust in you, no personalized offer—no
2
1
See “Moving from Self-Service to E-Sales,” (March
2, 2000, http://www.psgroup.com/doc/products/2000/3/
psgp3-2-00cc/psgp3-2-00cc.asp).
See “It’s All About Me and You,” (May 4, 2000,
http://www.psgroup.com/doc/products/2000/5/psgp5-400cc/psgp5-4-00cc.asp) and “The Tale of Customer Intelligence,” (June 1, 2000, http://www.psgroup.com/doc/
products/2000/6/psgp6-1-00cc/psgp6-1-00cc.asp).
© 2000 Patricia Seybold Group’s Customers.com®
Overview • 5
very important process for being able to analyze
your data effectively. But segmentation is not the beall and end-all. When intelligence efforts don’t go
beyond the process of building a profile and placing
STAGE 2: ANALYZING CUSTOMER DATA
the customer in a predefined segment, companies
There are as many ways to analyze customer data
aren’t practicing customer intelligence. They are
as there are waves on the beach. Analysis, however,
failing to recognize the value of each customer.
should not be viewed as a financial measurement
Simple segmentation based on demographics can
task or just a series of metrics applied to customer
present an incorrect picture of customers by atinformation. Customer metrics and financial actempting to make generalizations. For example, what
counting practices do have their place in determining
if Mary who lives in Beverly Hills is actually a livethe value of your customers, but
in gardener? What if John’s
the act of analyzing customer
uncle owns a computer store
data is much broader.
and gives him free equipment
When intelligence efforts
Analysis is the way to unbut John himself is barely comdon’t go beyond the process of
derstanding your customers.
puter literate?
building a profile and
You need to be able to analyze
customer data to answer quesplacing the customer
Don’t Get Caught in the
tions like, “who are my best
Profitability Trap
in a predefined segment,
customers?” But you also need
companies aren’t practicing
Marketers often think segto find answers to the questions
menting
a customerbase by
customer
intelligence.
that may not be so obvious, like
profit
is
the
best way to deter“why are these customers my
mine which customers should
best customers?” and “when,
get premium service. The cuswhere, and under what circumtomers
who
have
spent
the most at a particular comstances did they become my best customers?”
pany are ranked the highest and receive the most
personalized services.
Going Beyond Segmentation and Targeting
Profitability models, however, are not the best
Quite often if organizations are successful in
way of segmenting a customerbase for four reasons:
gathering different kinds of customer data, they then
categorize the customer based on characteristics as•
It’s Not Just $$$. Many companies are sursociated with her. For example, if Mary lives in
prised to find that the customer who spends the
Beverly Hills we assume that she has a high income
most at your company is not necessarily the
and categorize her as a top-tier target customer.
most profitable, especially when she demands a
Many sites on the Web will also place customers in
high level of service and shows little propensity
categories based on technographic attributes. For
for future loyalty.
example, if John has the latest Internet browser and a
•
Referrals Generate Revenue. As many marhigh-speed connection he may be categorized in the
keters and economists have shown, referrals not
technographically advanced segment and also cateonly fatten a company’s bottom line, they are the
gorized as a highly desirable customer.
mark of a profitable, loyal customer. A customer
These kinds of categorization practices are often
brings value, not only by what she spends but by
used by direct marketers. They’re typically used to
what she encourages others to spend with you.
drive the sale of products rather than to establish a
customer relationship.
•
Pareto’s Law. This is the 80/20 view of profitNow, don’t get me wrong. Segmentation is a very
ability, which deems that the majority of your
important process for delivering customer intellicompany’s profit is derived from the actions of a
gence. To make sense of the mounds of customer
few. Even though Pareto’s Law may be true, the
data you must be able to organize it effectively, and
other 80 percent of your customers still add
categorizing and segmenting your customer data is a
matter how attractive or well-focused—will repair
the damage.
© 2000 Patricia Seybold Group’s Customers.com®
6 • How to Provide Customer Intelligence
revenue to your bottom line. Moreover, many of
the customers that you might categorize in the
80 percent today could move into the top 20 percent tomorrow.
•
To build the relationship you need to move beyond just gathering customer information and creating segments and understand what each means to
your business. You need to recognize each customer’s value.
Develop Your Branded Customer Experience. We’ve spoken with many e-businesses that
STAGE 3: RECOGNIZING CUSTOMER
don’t want their front-line employees to know
VALUE
which customers are the most profitable ones.
They feel strongly that, although highly profitA few words about customer value. Understandable and loyal customers may be offered special
ing a customer’s value is a complicated, difficult
services, all customers should be treated equally
task. What is a customer’s value and how do you
well. Remember, the purpose of customer intelmeasure it? Is customer value a lifetime valuation?
ligence is to give the cusIs it a metric of retention? Is it a
tomer—any
customer—a
metric of referrals and affinity
better experience of dealing
relationships?
The customer’s value
with your firm.
can be defined in a broad sense Measuring Customer Value
Segmentation Is
Judgmental
as a stream of actions that
garner value for the customer
and yield value for the firm.
There’s another important
reason why segmentation models should not be confused with the act of recognition. Segmenting is a judgmental act. When you
segment you’re placing your customer in a cubbyhole, which may be fine for certain situations but is
inappropriate for others.
Customers want to believe that they have
choices. If a customer feels as if you’ve put him in a
particular category and only provide him with a specific set of products and services, he may not feel as
if he has the ability to make choices in an autonomous fashion. For example, I recently received a
notice from my bank that they were no longer offering account transfer services over the phone. If I
wanted to transfer funds between my checking and
savings accounts, I had to drive to my nearest ATM
or branch office rather than pick up the phone. The
letter that my bank sent me noted that the “premium
value customers” however, could still transfer
money over the phone. My choice of services was
limited just because my bank didn’t place me in the
“premium” category. Perhaps the bank’s intent was
to make me want to become a premium customer,
but instead knowing that I was being segmented
turned me off!
Value can be all of these
things and more. The customer’s
value can be defined in a broad
sense as a stream of actions that
garner value for the customer
and yield value for the firm. We believe that all
companies, both B2B and B2C, should be measuring
the lifetime value of their individual “atomic” customers as well as their “molecular” accounts (for
B2B) or households (for B2C).
Once you have a basic set of lifetime customer
value models you can begin to link these to customers’ interactions. One of the key differences between
customer intelligence and other forms of intelligence
(like business intelligence, which attempts to quantify a company’s operational functions, and eintelligence, which attempts to quantify its online
efforts) is that customer intelligence can determine
value from an ongoing interaction as opposed to a
completed transaction. In other words, with customer intelligence you can determine value as your
company is interacting with a customer. For example, Egg, the U.K. financial services firm, tracks
which customers are setting up “fantasy portfolios”
on its Investment Centre Web site. These customers
might not yet be investors, merely credit card customers, but Egg now knows that they are interested
in investments.
The most basic way to measure customer value is
through constantly improving metrics. As e-
© 2000 Patricia Seybold Group’s Customers.com®
Overview • 7
through delayed referrals. For example, I may have
businesses evolve they typically focus on certain
bought back-to-school items for my children from
types of metrics to measure their strategic e-business
Kmart when they were young, and now as a grandgoals. For example, many pure-play dot-coms that
mother I may refer my own children and grandchilare focused on acquiring customers rely on Web site
dren back to the store for more supplies. My lifetime
metrics to gauge the effectiveness of their site in atvalue as a Kmart customer, therefore, has been extracting the customer’s attention. More mature etended over time.
businesses typically focus on improving the cusCustomer value encompasses a stream of actions
tomer experience for the particular tasks that custhat reflect the history that your customer has had
tomers want and need to do on their sites. They also
with your company, his current behavior and intermonitor each customer’s ability to complete a transactions, and the anticipated stream of actions over a
action and the extent to which the dollar value of the
lifetime, which in some industries can range to more
customer’s transactions grow over time.
than 20 years. In fact, Patricia
Your business model will
Seybold has argued that the sum
also tell you the kinds of things
all your customers’ lifetime valto measure about your customUltimately
these
customer
data
ues plus the sum of your future
ers. For example, in a B2B
analyses will be used to help
customers’
lifetime
values
model you’ll probably need to
predict and gauge the way that yields an accurate picture of the
measure the length of the endvalue of any business.3
to-end sales cycle and the numcustomers will interact with
ber of people and roles involved
your organization.
for each account. In a B2C
Using Customer
model where you sell shirts,
Intelligence to Evaluate
computers, or seasonal garden
the Customer’s Experience
products, you might be monitoring repeat purchases
Ultimately these customer data analyses will be
and cross-category buying propensities for each
used to help predict and gauge the way that customcustomer.
ers will interact with your organization. The answers
As an e-business evolves in its level of technolgleaned will help your organization determine
ogy sophistication and the number of its customerwhether its interactions with each customer met or
facing channels, the need to interact and better unexceeded the customer’s expectations.
derstand its customers deepens. For example, Eddie
Bauer was one of the first clicks-and-mortar retailers
Intimacy in Electronic Communications. Alto correlate an individual customer’s buying behavthough customer experience is just one driver of deior across touchpoints including catalog, Web, and
termining customer value, it deserves special note.
store. Some customers responded to receiving a
It’s important to consider how the customer’s expecatalog by picking up the phone and ordering, others
rience differs across electronic touchpoints and
by visiting a store, and still others shopped online.
channels (in addition to the offline ones). One of the
Lifetime Value. Lifetime value—the total profits
you will realize from the actions of a given customer
over the lifetime of that customer’s relationship with
your company—typically has many variables (such
as cost allocations, referrals, cross-sell, up-sell, and
retention), so many in fact that it can be difficult for
a company to predict all of the ones that will affect
the lifetime value calculation. For example, many
companies assume that if a customer defects, that’s
the end of the customer’s lifetime value. But if the
company wins the defecting customer back after a
period of time, the lifetime value calculation may be
extended. Lifetime value can also be extended
© 2000 Patricia Seybold Group’s Customers.com®
more interesting aspects of electronic communications media that most people don’t realize is that, as
the method of communicating becomes more distant
and more abstract between two entities, there can
actually be a heightened sense of intimacy. At first
glance, this seems to go against the perception that
you can connect most deeply with someone face to
face and that, as you rely more on technology solu3
See “The Source of Value in the E-Economy: Interactive Customer Relationships,” (by Patricia B. Seybold,
January 13, 2000, http://www.psgroup.com/doc/products/
2000/1/psgp1-13-00cc/psgp1-13-00cc.asp).
8 • How to Provide Customer Intelligence
tions to communicate, you lose a sense of presence
and identity in the process. Yet, the strange thing
about using electronic channels like the Web, phone,
and wireless devices is that, even though the flesh
and blood may be lost, presence is actually extended
over location as well as over time. Using these
touchpoints, we can be in multiple places at once,
available anytime, and accessible over any distance.
Think of how e-mail has widened our circle of
friends and brought us back in touch with extended
family members.
easily and being able to access customer data and
analysis quickly.
STAGE 4: TAKING ACTION
Adapting to Meet the Needs of the Customer
Ultimately, the goal in using customer information and analysis is to determine what the customer
wants and needs. Analysis will also help your organization determine when to approach a customer,
Using This Extended Presence.
how to approach a customer, and
Given that by nature people are
what kinds of services to deliver to
most adept at face-to-face interaca customer beyond just creating
Customer DNA refers to
tion, the challenge for any organipersonalized offers.
zation lies in understanding how to
a set of information that
For example, many sales teams
take advantage of this new, exuse
a combination of customer data
companies have
tended presence to aid the cusfrom Web site search tools, online
about their customers.
tomer. You need to not only underhelp desk, and Web traffic servers
stand what information can be used
to determine how and when to apto help foster interaction but also
proach a customer. At the Patricia
determine the most appropriate level of contact and
Seybold Group we often sift through the search queinteraction. How frequently should a company apries that our Web visitors enter to help us understand
proach its customers with an offer? When should a
what kinds of topics our readers and customers are
company attempt to anticipate the customer’s needs?
interested in. For example, if someone has searched
What is the optimal method of communicating with
for information on customer acquisition and data
a customer? And, how far should a company go to
warehousing, our customer service supervisor calls
serve the needs of its customers? For example, Des
or e-mails him to alert him to an upcoming report on
Kenny of Kenny’s Bookstore discovered that he
the topic.
could boost customer lifetime value by greeting each
customer who registered on his Web site with an
Collect and Use Customer DNA
early morning phone call within two days.
We have found that many companies rely on a
The answers to these questions need to be deset
of core customer information to help customers
rived by looking at the gestalt of customer informastreamline
their business dealings. We use the term
tion in the context of an overall customer service and
Customer DNA to refer to this set of information
relationship management strategy. Once you arrive
that companies have about their customers for many
at a strategy for interacting with customers—one
of the customer’s key scenarios. Here are some exthat is consistent with the branded customer experiamples of Customer DNA:
ence you want to convey—you’ll need to provide the
right mechanisms to ensure consistency and fluidity
•
The service records that a car dealership mainin these interactions across touchpoints and sales
tains for its customers
channels. Here is where technology can support the
results of the customer intelligence process. Imple•
Customers’ financial portfolios maintained and
menting your strategy may require integrating both
updated for them
front-office and back-office systems. It may also
require flexibility in architectural design, providing
•
Patients’ medical records and outcomes, mainelements like being able to change business rules
tained in confidence, with integrity.
© 2000 Patricia Seybold Group’s Customers.com®
Overview • 9
•
Engineers’ design simulations
•
Architects’ plans
•
Companies’ insurable assets
•
Companies’ computer systems and network configurations that they have installed and running
These data sets are valuable customer intelligence assets. They become part of the customer information that can be leveraged to provide more
convenient and appropriate service for each customer. We refer to them as Customer DNA because
each one is unique, yet each core set of customer
data intertwines with the company’s business processes to produce a highly customized response.
Perhaps the best way to demonstrate Customer
DNA is with medical records. Medical records contain lots of different kinds of information about you
and your health. The records contain not only basic
pieces of information about you but the results and
reports of the different tests. Medical records also
contain diagnosis or analysis and recommendations
about how to act on the test result reports. When you
enter a hospital, different branches of the hospital
will use your medical record information to complete specific processes. For example, the billing
department will use some of the information to determine how much to charge you for a specific procedure. The nursing unit will determine what kinds
of medicine to give you, the lab will determine
where to send their test results, and the admissions
department will determine what kind of room to
place you in.
To be successful in understanding customers,
companies should understand how their Customer
DNA works. Once you understand what your Customer’s DNA is made up of, you can begin to understand how to refine and extend your core business
processes to deliver custom responses.
Providing Effective Service
Many online marketers equate providing effective service with one-to-one marketing and personalization.
© 2000 Patricia Seybold Group’s Customers.com®
One problem with both one-to-one marketing and
personalization strategies for attracting and retaining
customers is that they both tend to emphasize delivering specific pieces of information rather than facilitating customer interaction. The customer is
mostly left out of the loop and the company basically stays in its own closed loop of gathering pieces
of customer information, applying segmentation
models (albeit very narrowly defined segments), and
pushing personalized text and offers out to the customer.
Although customized information can be very
useful in helping a customer make decisions, actions
and a warm, caring person often speak louder than
words. Service is the goal for today’s customer
economy, and to provide effective service you need
caring, motivated people in the loop who can reach
out and help your customers. Trust, respect, convenience, saving time, and making it easy to do
business are the fruits of effective service. Thus it’s
important that your customer intelligence process
involves getting as much information as possible
directly from the customer and applying the insight
gleaned from that information to meet the customer’s needs. In a nutshell, providing effective
service means that you determine what your customers want and need and you find the best way to deliver it to them.
ADAPTING CUSTOMER INTELLIGENCE
To meet your customers’ needs you must be
flexible. You will need to constantly adapt your own
processes. This means that your customer intelligence efforts will never be done. Honing customer
intelligence is an ongoing process; you’re constantly
trying to understand who your customers are, what
they want, and the best way to deliver what they
want. Using customer intelligence well also means
that you have an incredible opportunity to understand the role that your customers play in a larger
context with your business partners and suppliers.
Once a customer becomes loyal to your company,
the opportunity to leverage that loyalty via referrals
is great (see Illustration 2).
10 • How to Provide Customer Intelligence
The Customer Value Chain
Customer
Value
Product
Offers
Acquisition
Service
Retention
Referrals
© 2000 Patricia Seybold Group, Inc.
Illustration 2. Understanding a customer’s value enables a company to guide its customers through each stage of
a life cycle, from the initial purchase of products to creating loyalty and generating referrals.
Final Thoughts
In summary, customer intelligence is a core part
of your ongoing e-business activities. It’s not a separate, isolated activity of gathering statistics. It’s a
process for understanding your customers and then
delivering the right products and services to fit their
needs. It is a process that is continuous and evolutionary; the more you understand your customers,
the more you will continue to anticipate and meet
their ever-changing needs and earn their trust, their
loyalty, and their profitable business.
© 2000 Patricia Seybold Group’s Customers.com®