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Actioning customer insight: fulfilling the promise of CRM
In theory, firms should be able to use Customer Relationship Management (CRM) technology to identify the ‘right’ customers in the future, understand their needs, predict their behaviour, develop tailored propositions and have more relevant conversations with them. Yet CRM projects have failed to deliver expected benefits. Both academics and practitioners have begun to refer to a key resource required to fulfil the promise of CRM as ‘customer insight’. This research is the first to develop a theoretical model for actioning customer insight, addressing the questions: what data is being collected? What insight is being generated? How is insight being actioned across the organisation?
Five case studies with UK-based large companies were undertaken, involving 25 in depth interviews. Companies were found to be synthesizing data from five areas: competitors, customers, markets, employees and channel partners. From this data they are generating four types of customer insight: market predictions, customer segments, propensity models and customer analytics. This insight is guiding strategy, operations, marketing, sales, product portfolio management and customer service. The study is one of the few to investigate the growing role of technology in service encounters. It identifies a growing trend towards inbound marketing and proposes further study in this area.
cycle time
What would make the model more robust I think would also be a sense of collapsing the 'cycle-time' between generating the insight and acting on the result.
Stephan Haeckel formerly Director of IBM's Advanced Business Institute has written copiously on the 'Adaptive Organisation' which has the ability to sense and respond to customers needs. He talks about the 'Customer-back' organisation - driven by insights, but he also recognises that acting on insights is considerably more complex than targeted marketing and clever data-mining. It requires a different type of organisation and team-based culture which is able to respond in a modular way through networks of capabilities, rather than in the traditional product silo approaches.
It also requires a new kind of governance - establishing limits or a framework within which people can take responsibility for the customer, rather than in the old 'command and control' heirarchical way. A little bit like Brian Ashton appears to be doing for England in the World Cup.
Whilst this concept has been around for a while now, it was only last year that I came across a couple of superb examples - where both firms (Ariba & Honeywell ACS) were using customer feedback to alert them to urgent customer issues. Both companies were using advanced technology to capture and react to the Voice Of the Customer. Both also used this closed feedback loop to reduce customer defections and also to reward employees.
This highly reactive capability is another example of 'actioning customer insight'. The difference though is the reaction time is measured in minutes or hours rather than in months of traditional 3rd party customer satisfaction surveys.
Both case studies of Ariba and Honeywell can be found on this site.
http://www.mycustomer.com/cgi-bin/item.cgi?id=132367&u=pnd&m=phnd
http://www.mycustomer.com/cgi-bin/item.cgi?id=132368&u=pnd&m=phnd