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Avoiding the Lime Green Mistake

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Posted November 21, 2001 By Staff     Feedback

Andrea Maywhort of Truis Corporation discusses the different, but equally important, aspects of customer intelligence and customer data, and how interpreting facts from figures impacts the big CRM picture.

by Andrea Maywhort, customer intelligence expert, Truis Corporation

Have you heard the one about the vice president of production and the lime green cars? A VP of production for a major car manufacturer was recently reviewing the quarterly data reports provided by his company's customer relationship management (CRM) suite. The company's close analysis of the statistics revealed that its dealerships had sold more lime green cars in the previous month than ever before. Armed with the figures needed to support the color's increase in popularity, the VP ordered the production of lime green cars to double.

Two weeks later, when the fleet of new cars arrived at their respective dealerships, the VP found himself inundated with phone calls. Sales managers from around the country all asked him the same thing: Why had the company doubled its shipment of lime green cars when the dealerships had been forced to slash prices the previous quarter just to get rid of them? The VP of production found himself staring at the numbers, wondering what went wrong.

Like this VP, many companies rely solely on their CRM solutions and data to better understand their customer base. And, although today's CRM solutions are helpful in providing companies with a comprehensive view of customer information — what the customer purchased when, and what service issues have arisen — these solutions only provide static and historical views of the customer. By only analyzing the filtered data from sales and customer service, a CRM system cannot provide a company the customer intelligence necessary to gain true insight into its customers' intent

Customer data and customer intelligence share a common purpose, but there is a big difference between the two. Data reflects past behaviors of customers, while customer intelligence — information about what customers do, need, and say — provides the context needed to understand those behaviors. In other words, the how and why provided by customer intelligence augments thewho and what of raw customer data.

Table 1: Customer Data vs. Customer Intelligence

Customer Data vs. Customer Intelligence

Source: Truis Corporation

Mission Critical Intelligence
The single predictor of success for any business is a superior value in the eyes of the customer. Thus, managing the customer experience both during and after the sale is critically important if a company is to build and sustain loyal relationships with its customers. You must know your customers in order to develop the products, services, and sales campaigns that will speak directly to their needs. And these relationships do not come from statistics alone; the ongoing collection of customer intelligence is an integral part of this process.

There are three key differences between customer data and customer intelligence:

  1. Customer Intelligence is Contextual. Today's CRM solutions do a really good job of collecting historical data concerning the preferences, buying history, and demographics of your customers, but they typically do a poor job of putting customer intelligence into context for you. For example, a large enterprise software company had been receiving several e-mails a month through its support Web site asking for keyboard shortcuts in its products. The company constantly overlooked these requests because they weren't prevalent enough within the company's CRM suite, and because customer data, including beta test results, call center logs, survey sheets and product feedback reports did not indicate a strong demand for them. Ready for an egg-in-the face moment? The company finally had an epiphany when a business customer tracked down a marketing representative and said, "Hey, as a physically challenged person, I rely on keyboard shortcuts to effectively use your product, as do many others like me, and you are the only vendor that I know of that doesn't offer them." How's that for contextual?

  2. Intelligence is actionable. Although it is possible to act on data alone, it is far more effective to layer that data with rich customer intelligence. The combination of the two enables you to make more confident and precise business and individual decisions. Without qualitative customer intelligence to accompany your data, you miss what customers are actually saying about your company. For instance, not only was the physically challenged customer mentioned earlier dissatisfied with the product, he was very vocal, even writing journalists at leading trade magazines, and posting negative feedback on dedicated online chat rooms and message boards. The company's intelligence on this single customer, and further, what the intelligence revealed on a larger scale, quickly became actionable, for obvious reasons.

  3. Intelligence is personal. In the recent past, it appears companies took the easy way out, focusing primarily on gathering data and using it to make key business decisions as quickly as possible. Unfortunately, in the process, many of them forgot about or disregarded their customers and made mistakes that affected their bottom line, and their relationships.

Did you notice that Southwest Airlines posted a profit last quarter while United Airlines posted a $1.5 billion loss? Obviously there are many reasons for this disparity, many operational in nature, but if you look at the innards of each organization you will see that Southwest takes a more personal approach with customers (ever sang Singing in the Rain while flying through a thunderstorm?), and when it comes time to gather customer intelligence, customers are ready to open up and be honest. Southwest's customer-centric business approach may not be the leading reason for its trend-bucking profit, but you can't discount it.

Collecting customer intelligence on an ongoing basis shows your customers that you care and proves the level to which you value their opinion and their business. It also gives them more confidence in your company and the efforts being made to respond to their requests. Customer intelligence enables you to know what your customers are thinking, rather than guessing. And, in doing so, you create partnerships that are mutually beneficial. The customers get the attention they need and deserve, and this validation encourages them to speak favorably about your business in the future.

Customers Count
In the past few years, many companies have forgotten about the Golden Rule of customer relationships (or deemed it too expensive): the more you put into the relationship, the more you get back. To ensure loyal, lasting partnerships with your customers, you must establish a formalized process for collecting the intelligence that will augment your CRM data. Then, by combining your customer data with your customer intelligence you will be able to make much accurate business decisions and avoid being stuck with your own surplus of lime green cars, or being known as a company that ignores its physically challenged customers.

San Francisco-based Truis develops comprehensive customer intelligence programs for leading business-to-business companies.

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