Analysing data collected from customers allows companies to build a better understanding of customer behaviour. This enables businesses to contact customers in a more intelligent way and provide highly personalised, relevant messages. This sounds simple, but how does it work in practice?
Defining the features of customer intelligence
Customer intelligence is the term used for marketing processes that allow organisations to plan and design customer relationships and interact effectively with customers as a result of analysing historical data. The current approach to customer intelligence has three main features, which address the most important challenges and needs of customer-focused organisations. These are:
1. It allows the business to obtain insights about customers
In its simplest terms, this means that you can move away from the one-size-fits-all paradigm to personalized communication based on analytic profiling and behavioural micro-segmentation. Analytically-oriented marketing is becoming more important as part of organisational strategy, and not only among marketers. Why? Because it improves efficiency, and therefore provides other benefits for the company, including identification of the best clients and understanding of their distinctive features early detection of customers who are thinking of leaving, ability to anticipate the level of acceptance of a specific offer and optimization of product, contact channel or time of day.
Learn more about Analytical Marketing.
2. It supports efficient operationalisation and effective contact with the client
The most important aspect of this is the effective management of real-time contact channels. Real-time contact with clients requires companies to be able to consider the current context, i.e. the possibility of providing a logical, context-based response during the contact.
For example, a customer might call a hotline to discuss something. At the end of the conversation, the consultant could offer an additional product. Traditionally, consultants would have a static, previously prepared list of products available. In the real-time sales model, consultants can enter information from the conversation into an analytical system that can recommend a product that best fits both the customer’s historical customer profile and the current conversation.
Intelligent real-time communication is fundamental to creating positive perceptions of the company and building better customer experiences. Like analytical marketing, therefore, it has moved high onto the list of senior management priorities. Efficient contextual communication in real time enables the operationalization of the next best action paradigm. This means that for some customers, the most appropriate action is not to try to sell an additional product for a frustrated customer, this would only add fuel to the fire. Instead, the company can take specific action to solve the customer’s immediate problem. Next-best offers can reduce the efficiency and profitability of the sales channel in the short term, but in the longer term, they help to increase customer satisfaction and loyalty.
Learn more about Real-Time Customer Experience.
3. It supports optimisation of the customer journey
Optimisation of the customer journey is sometimes thought to be about the recommended form of contact at any given time. It is, however, more than this, and includes modelling the optimal path or contact paths across the customer’s whole relationship with the organisation. Understanding the impact and sequence of individual interactions also helps companies to design better, more user-friendly interfaces for contact channels and plan multi-stage campaigns with higher conversion levels.
Learn more about Customer Journey Optimization.
Choosing a system
These three elements define the requirements for an IT system for customer intelligence. Chosen well, and used effectively, these systems can provide significant, tangible financial and image-related benefits. This is mainly through an increase in the level of customer satisfaction and a greater percentage of brand ambassadors.
Digitalisation of marketing and ways of communicating with customers have, however, led to an exponential increase in the number of IT solutions available. One analysis suggests that the number of suppliers has risen from around 150 in 2011, to around 5,000 in 2017. As a result, some of the solutions available provide few of the required functionalities. For decision-makers, this means a complicated and time-consuming process, and for managers, additional effort to try to connect separate silos and build a client-centric communication strategy. This can lead to disappointment for both company and customers.
Understanding and anticipating needs
Customers now expect organisations to understand and even anticipate their needs. They also expect their customer experience, and all the messages they receive, to be consistent regardless of the channel they choose to use. Ideally, marketers would have a red button to press to remove inconsistencies between channels, and define the ideal interaction path. Many of the current systems are worlds away from this, but for those getting customer intelligence right, the benefits are clear.