Here are several excerpts from an article by Juan Martinez, Editorial Assistant at CRM Magazine, Why Customer Intelligence (CI) Is a Bright Idea. Check out the complete source article for much more including several examples of how CI has helped companies like ESPN, Farmers Insurance and Fresh Direct:
On the second day of the the recent Forrester Marketing Forum in Los Angeles, one of host Forrester Research’s analysts discussed the business value of Customer Intelligence (CI). The keynote by Principal Analyst David Frankland, Know Thy Customer: How Customer Intelligence Becomes A Strategic Weapon, detailed how and why companies should begin to invest in centralizing customer data in order to maximize customer satisfaction and lifetime value.
The keynote addressed three significant questions:
- What is CI?
- What is its role in marketing?
- How can marketers leverage it in their role?
Frankland defined CI as, “The management and analysis of customer data from all sources, used to drive marketing performance and business strategy.”
“A lot of firms struggle,” he said. “They have data dispersed throughout their entire organization — none of which is tied together. Organizationally they’re not set up for CI; they’re set up by business line, by product. They don’t think about the enterprise view of the customer.”
Referring to a report published last year, for which Forrester surveyed 300 CI professionals, Frankland said the analysis firm had concluded that “not everyone understands the value of CI.”
Those who did measure CI value told Forrester that CI drives business results. Almost two-thirds said it improved their customer lifetime value. More than three fourths said it improved customer satisfaction.
“If you’re not interested in driving customer lifetime value, if you’re not interested in satisfying customers, ignore these statistics,” Frankland said.
Frankland referenced a study by Larry Selden, professor emeritus at Columbia University, to emphasize what companies stand to gain by leveraging CI. The study found that the bottom 20 percent of customers can drain profits by at least 80 percent, draining the success achieved by the top 20 percent, which can generate an amount of profit equal to 150 percent of what a company eventually nets.