What is Customer Intelligence (CI)?
Customer intelligence refers to the process of gathering and analyzing information regarding customers; their details, activities, tastes, and preferences, for developing deeper and effective customer relationships that result in improved decision-making processes.
Data vs. Intelligence vs. Insight
What is the first think that strikes you when you hear the term ‘data’ – Information, raw data, or anything else? Data refers to the raw information of customers. Ranging from personal information or response to surveys or purchase records, any valuable material for your business is termed as data.
Data alone cannot predict user behavior. Add meaning to raw data by associating it with context.
Raw data # 1 – A customer bought product X twice this month.
Raw data # 2 – A customer bought product X twice this month but only once in the last month.
Raw data # 3 – A 30-year-old customer with a master’s degree bought product X once last month and twice this month
Which of these facts sound the most interesting and help you derive valuable business insights? Obviously, the third one, isn’t it so? This is because the third fact is most contextual.
Intelligence is complete understanding of customer needs you derive from data collection, contextualization, and analysis. Study of and scrutinizing business data helps in producing real-time actionable insights.
Customer intelligence is stepping further to derive context; for example, the 30-year old customer, a school graduate, has shifted recently and has a young family.
Insight refers to the deep understanding of customer needs involving collection, analysis, and synthesis of customer intelligence. It answers questions beyond who, what, where, and when to answer the major question of why customers behave in a particular way in a particular situation. The responses improve decision-making processes and deliver useful results.
Insights help us learn that sometimes our customer buys a competitor’s product as they are cheaper, and this month the customer does not have a high budget. So, to develop customer loyalty, we offer discount coupons to help the customer purchase the product at lower cost and help him/her during a financial crunch.
ROI on Customer Intelligence
Just imagine, now you can identify the highest profit potential. Yes, it is possible with customer intelligence analysis.
Investment on business intelligence tools is a one-time activity as you must capture insights for specific purposes or completely revamp your business model. How do you prepare an estimate of your expense requirements then?
It is easy however the only challenge is estimating its impact on profits. Hence, you must focus on key drivers of improving profitability.Dedicate 10 to 15% of your advertising budget to capture relevant customer insights to design future business strategies.
It is essential to validate assumptions and strive towards continuous improvement. The amount of data surrounding us is endless; for effective advertising strategy you must ensure to filter the collected data to arrive at accurate business decisions. In addition, focus on using the right BI tools to create a greater impact.
Key Attributes of Customer Loyalty
Customers today, whether B2B or B2C, are spoilt for choice. Several enterprises are pursuing them now. Online stores provide convenience of purchasing and remove geographical barriers; these stores provide products at comparable prices, if not cheaper, and deliver all across the globe.
So, what are the main challenges of building customer loyalty and retain returning customers.
If you are running a B2B business, you must consider these six core areas:
1. Core Offering: Companies enjoying highest levels of customer loyalty have not achieved it through loyalty card programs or other marketing stints. The truth is they have a solid, reliable core offering which attracts more customers.
Emphasis is given to development of customer-centric products; these enterprises never fail to deliver customer satisfaction. When you know what your customer wants you will get an opportunity to empower your employees to consistently deliver those needs.
- Elements of your core offering must include the following:
- Premises/Location: Attractive and functional premises are a win-win situation
- Service: Consistently low prices help retain customer loyalty
- Value Proposition: You must offer products/services that customers want. Customer needs are paramount to business growth and success. If you do not fulfil them, some other company will.
2. Customer Satisfaction: Obviously, if customer satisfaction is low, you will not garner loyalty. Measuring customer satisfaction does not accurately determine level of customer loyalty.
3. Elasticity: This factor determines the level of involvement in a purchase decision; it is applicable for enterprises as well as customers. High level of customer involvement is observed while purchasing new products like car, jacket, or wine bottles etc. Same is not the case with commoditized products like shoelaces etc.
Few purchase decisions are clearly defined. Product differentiation helps enterprises shift customers from an existing supplier.
4. Market Situation: A key attribute in developing customer loyalty is the current market situation. The level of competition and quality of other products is significant for customer switches. Give a good reason to your customers to support you. Inertia loyalty is a prominent factor of customer satisfaction. For example, if you have a savings account with one bank for more than 5 years, you will not like to change a new bank as it is time consuming.
5. Demographics: Differences in age, gender, culture, etc. are key determinants of customer loyalty. Educated customers do not commit to specific brands. Less affluent customers may not try a brand which does not suit them. Moreover, younger customers are not as brand conscious like the older ones.
Big Data, a common buzzword nowadays, refers to data generated by human behaviour through social networks, chat rooms, blog, comments, etc. The fast-moving and diverse data helps in discovering invaluable insights; enterprises use these insights to understand customer needs and provide a 360-degree customer experience.
Technologies like SMAC, cloud computing, and big data analytics have enable easy management of IT services. For example, Uber has utilized the vast pool of data to achieve greater economies of scale and improved efficiency. They analyze location-based data from your smartphone, pair it with driver’s location, and the driver reaches the pickup point in no time.
Another good example of customer intelligence analysis is the experience provided by Amazon. Their expertise in logistics and delivery makes it economical for customers to receive deliveries even of single items.
Social media platforms have also helped enterprises increase the levels of customer engagement. Predictive analytics help enterprises listen to customer reactions on Facebook, Twitter, LinkedIn etc., analyze it and adjust campaigns quickly to improve results.
I find enterprises gain huge value by drawing insights from Facebook, Twitter etc. because they get a complete understanding of customer activity, i.e. 36-degree customer view. It is difficult to devise a marketing strategy based on data silos; every channel has specific application and data. Correlation of insights from social media and performance levels on other websites and marketing channels helps in connecting the dots.
‘See and be seen’ is the mantra of increasing customer engagement over social media platforms. Listen to your customers and be prepared to take definite steps for utilizing this information.
CRM + Customer Intelligence = Strong Customer Relationships
Effective customer intelligence drives profitability and revenue growth by accelerating key competencies of your enterprise. Few of its benefits include enhanced product development, improved agility, accelerated business process improvements, and demand innovation.
Agility helps organizations sustain the rapid developments of dynamic environment. Agile enterprises can identify new opportunities, skill development, develop and execute short term strategies effectively.
Business intelligence helps enterprises realign with their customer segments and identify new target audiences to increase market share.
Demand innovation helps in strategic adjacency that leverages your current positioning strategy and existing assets to progress forward. It involves selling exiting value proposition to new segments, new products for existing customers, reposition your offering to create attractive brand value.
I always wondered how to create an effective customer intelligence strategy. Research and discussions with industry experts helped me realize the following important points:
- Organize customer data: ecommerce marketing helps enterprises collect and store data about individual customers. Unlock the potential of customer-driven data. Move beyond aggregate metrics and access real-time customer insights.
- Identify new opportunities with data analytics tools like cohort analysis and other crucial metrics like customer lifetime value, customer equity, early repeat rate etc. Look for opportunities to convert existing customers into repeat shoppers
- Experimentation validates effectiveness of your marketing strategy. Highlight customer responses from each segment without promotional offers and discounts.
- Automation of business process is another step to transform marketing activities into a one-time winning strategy that gradually becomes a long-term source of brand value. Identify successful campaigns that acquire high-value customers and the right automation tools. There are different tools for each marketing channel. For instance, email marketing helps you to segment customers automatically; it triggers emails according to different segments. Prioritize your objective and leverage successful customer intelligence tactics at appropriate stages of the marketing lifecycle.
I hope your queries related to customer intelligence have been answered to some extent. Share your thoughts as well.