The CRM bubble exploded quite some time ago, and it was more proof of the need for a project’s strategy and operative to advance, if not at the same rate, at least with each other’s help.
In this article, Angel Bonet, partner at Daemon Quest, explains the Fundamentals of what is called Customer Intelligence. A combination of techniques that allows us to convert information into knowledge.
The majority of companies are facing a new paradox with their customer’s information. More information = Greater difficulty in decision-making. This is due to the fact that the information on transactions with the customers and the contribution of the new systems ERP and CRM is gross information and data, neither qualified nor segmented. Customer Intelligence is a combination of analytical techniques that converts these enormous amounts of gross information on the transactions into scientific information ready for decision-making. Its existence in Spain is relatively new, but in a very short time it has proven that its possibilities are endless, as are its applications in the business world.
A great part of the success experienced by conventional CRM’s, at least in its theoretical approach, is due to providing companies with a necessary tool to gather, reorder, and rationalize all the information on its sales network and interactions with customers. However, failure rate of CRM projects is already at 65% of the implementations. The main cause of these failures lies in the fact that CRM technology only accumulates data and figures, but it doesn’t offer an agile solution for decision-making. Customer Intelligence covers precisely that need. Analyzing, segmenting, modeling, interpreting and presenting customer information oriented towards supporting decision-making in different areas: obtainment (targeting), customer loyalization, cross selling and sales force optimization among others. Its use is focused on management. Executives find themselves on many occasions lacking information that is simple to interpret in order to be able to do it. In fact, although many directors apparently consider that they know their customers, few would be able to respond to questions such as:
This is obviously information that every company director should have, but the reality is that a resounding 95% of companies do not exploit and take full advantage of all the information their customers generate and their information systems. And that happens because this information is dispersed and not ready for decision-making. What Customer Intelligence aims to do is convert that information into Strategic Knowledge.
What does Customer Intelligence offer? It can be applied to any activity sector, and its goal is to help companies sell more and better using a very simple principal: in order to improve sales it is essential to know the customers and be able to deal with them in-depth and in a personalized way.
The principal applications of Customer Intelligence are:
The objective is to know the customer portfolio in-depth, its composition and situation, by finding out which customers are truly the best, what typologies or sectors they belong to, how they should be segmented, which ones show a risk of abandonment, what leadership possibilities the company has in each market niche, or what possibilities it has to create specialized products according to the customer’s type and activity.
It’s based on an obvious, fundamental principal, which is that it is 7 times simpler to sell to a customer you already have than it is to sell to a new customer. Through this analysis we find out: how many customers are being shared with the competition, which ones are potential buyers of other products, which belong to a single community and might share interests and products and, in some way, how they can be grouped.
Potential market analysis facilitates an itemized detailing of the penetration the company has gained in the different sales areas where it has a presence, and it identifies twins for our best customers.
This offers the company an exhaustive analysis of how its own sales network, its representatives, and its personnel function. This technique allows us to know what the sales network activity is like, identify the best way to access the potential market, and to detail how the competition is situated. All of this using a sophisticated network of maps in which we can outline anything from an eventual expansion (where to open offices, what areas are weakest for the competition) to the territorial consequences of a merger (offices and shops that overlap).
Behind all of this analysis lies a sophisticated technological framework that makes use of the most powerful tools on the market (for example, Datamining, GIS: Geographical Information Systems, Statistical Analysis such as CHAID, regression, Cluster, Artificial Intelligence techniques such as neural networks); technology that is submitted to a process that is put in the hands of scientists and professionals of the highest qualification.