Customer Intelligence Energizes Demand Chain ManagementCustomer Intelligence Energizes Demand Chain Management

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Customer intelligence is not just a concept or a by-product of an organization's data warehouse. More than the information collected or produced within component operational CRM applications, it is the practice of managing customer information to both enhance the customer experience and improve the two-way value proposition. Establishing this foundation of customer intelligence is a critical step toward achieving a cultural commitment to customers. The commitment is most evident in the front office, where frequent and persistent customer interaction occurs.

Customer intelligence calls for a robust layer of customer information management applied to support interaction consistency and deliver impactful insight to achieve performance improvement. Extended throughout the enterprise, customer intelligence embraces all that the organization knows and understands about its customers. Ventana Research urges organizations to leverage customer-facing systems with a robust customer intelligence strategy for improving operational performance.

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Ventana Research defines customer intelligence as the practice of managing enterprise customer information to enhance the customer experience across all interaction points and improve the two-way customer-organization value proposition. At the core of such practice is a holistic approach to business integration and data management focusing on the customer. Such a focus is all too rarely found; when present it enables powerful customer-centric analysis and control within the organization. The front office demand chain focus with respect to customer intelligence is only the beginning. In customer-centric business cultures, the information management and sharing extends to other functions and applications, including financial, back office, and other information about the customer.

To further define the characteristics of systems that actively support and enable customer intelligence, Ventana Research has drawn common themes from its observations of global enterprise practices and the increasing vendor focus on centralized customer master data management. The following are key features of solutions that enable performance improvement through customer intelligence:

Customer information management. Customer detail — including a rigorous definition of what "customer" means — has been systemically aggregated out of the fabric of many data warehouses, and, therefore, from performance management initiatives. In organizations with a strong customer intelligence mind-set, customer interaction data is captured and these metrics have become integral to outcome measurement and performance management. Part and parcel to the customer information management dynamic is the notion of customer advocacy, an enabling layer meant to support customer information stewardship efforts. Its key feature is providing a central point of management for customer data and metadata quality and consistency. Quality prospect and customer information adds richness not only to marketing program definition and execution, where its value has been readily recognized; it also measures the customer experience more actively in gauging the performance of those who run call centers or execute sales tactics, for instance.

Consistent interaction experience. From the customer's viewpoint, interacting with an organization through its front office application maze can be frustrating. In the worst instance, the experience will drive customers away. The flip side of the customer experience is the occurrence taken from the viewpoint of the organization, which often suffers from similar inconsistencies, the worst of which result in lost opportunities. The challenge is to make better use of customer information to improve the consistency of customer treatment, and at the same time optimize internal performance without jeopardizing the longer-term customer relationship.

At the very least, this involves enabling interactions with up-to-date two-way engagement information. Marketing programs are designed to take service records into account, not just revenue and product purchase histories. Sales practices emphasize engaging customers and prospects with approaches that take advantage of information gleaned from immediate lead generation activities. The customer is required only to pass through a single security layer, and then interacts with an informed call center agent armed with real-time information about the web self-service encounter that led to the conversation.

Customer insight and performance improvement. Greater insight and performance alignment ride on the back of the robust information and analytical consistency described above. Customer insight brings to bear analytical inference drawn from the customer intelligence base with respect to who the customer is, not just what the customer represents. When applied uniformly, these insights enable the organization to begin expanding its performance assessment beyond asking "How can we improve the way we execute customer-related tasks?" to "How do we improve our business behavior with customers?" Customer facts, attributes, and analytical insights are made integral to the demand chain functions. Ultimately, each face of the organization — service agents, sales reps, IVR scripts, marketing vehicles, etc. — is consistently aware, physically or virtually, of who the customer is, the context of the immediate interaction, and the predictive performance impact of relevant optional tactics.

Assessment

Demand chain initiatives are most likely to achieve success when CRM and other operational applications with customer information are brought together with a coherent customer intelligence strategy. Organizations are urged to elevate their customer intelligence efforts out of their operational CRM investment foundations in order to assess their capacity to leverage customer information more creatively. The features of customer intelligence outlined here provide a performance management framework for assessing current organizational propensities and technical capabilities. Ventana Research asserts that customer intelligence is a critical foundation for supporting operational performance management.

Jack Hafeli is Vice President & Research Director — Customer Intelligence and Demand Chain Performance at Ventana Research, a research and advisory services firm.