Customer Intimacy: What’s Analytics Got To Do With It?How can you have an “intimate relationship” when one party is a large enterprise with more than $1 billion in annual revenue and the other is an individual customer or prospect?
In such a lopsided relationship, one would expect the balance of power to favor Goliath Inc. But when it comes to customer intimacy, it is the individual decision-maker that the enterprise must woo if the relationship is destined to prosper.
In a recent study commissioned by FICO (the folks who calculate your credit score), Forrester research conducted a survey of 266 business decision-makers in marketing, fraud, and collections across eight countries. The overwhelming majority of respondents (87%) reported that their top priority was improving the relationship with their customers.
What Is Customer Intimacy?
“Customer intimacy” is marketing shorthand for understanding your customer’s preferences and habits so well that you can anticipate what they want, how they want it, and when they want it. This “intimate” knowledge of an individual’s preferences and history is vital to the development and maintenance of a long-term customer relationship.
But creating customer intimacy when one partner is a large, multi-national corporation can be a tricky business. It is not always easy to judge when exercising knowledge about a customer’s location, habits and preferences moves beyond the level of “engaging” into the realm of the “creepy.” As in any relationship, customer intimacy grows over time with repeated interactions built on a foundation of trust.
The Challenge of Customer Intimacy
Meeting the challenge of customer intimacy requires moving beyond broad generalizations about “customer types” to the highly specific details of engaging with customers as individuals.
Customer Intimacy: What’s Analytics Got To Do With It?The large companies represented in the Forrester survey currently rely on broadly-defined segments that lump many customers together based on a handful of demographic characteristics.
In order to move to micro-segments, and ultimately to segments of one, they need better data, new analytical capabilities, and automated decision-making to reduce insight-to-action time.
3 Keys To Building Customer Intimacy
The large enterprises represented in the Forrester study are putting their investment in three key areas that are essential to driving greater customer understanding and engagement. Here’s how they are focusing their efforts:
1.) Gather more data, better data. To really understand customer preferences, it takes a broad set of demographic, social, contextual, and behavioral data. This means marrying the traditional customer information available in the corporate data warehouse with external data coming from mobile and social media channels.
2.) Use analytics to put customer preferences in context. With a broader base of available data, analysis of past customer behavior patterns can provide a rich historical context for predicting the likely preferences of new or returning customers. Location data and attitudes reflected in social media “likes” offer a more nuanced picture of individual preferences than was previously possible.
3.) Automate the insight-to-action cycle. Large enterprises can no longer afford to take months to convert new customer insights into fresh marketing campaigns with new offers and eligibility requirements directed to new segments of the market. They require rule-based “decision engines” to evaluate conditions, calculate responses and automate the execution of marketing campaigns delivered to the individual customer.
Customer Engagement: Right Message, Right Time, Right Place
Once you have established a deeper understanding of your customers as individuals, the next challenge is determining when, how, and where to engage with them. The goal is to deliver the right message to the right customer at the right time and location.
Sophisticated modeling techniques applied to customer data provides the foundation for customer engagement at a more personal level. Deeper knowledge of the habits, preferences and status of individual customers creates new opportunities for cross-sell and up-sell. And eligibility for specific offers can now be determined from data about a customer’s relationship with the company or legal requirements in their location.
While 67% of the companies represented in the Forrester study are already engaged in measuring the outcomes of their customer modeling efforts, only 14% reported using metrics about customer preferences and decisions to optimize running campaigns. The vast majority (85%) were still using metrics strictly for reporting on past business performance.
Customer Intimacy: What’s Analytics Got To Do With It?But that is about to change as more organizations are shifting their perspective from past performance to real-time optimization.
Those companies that invest in real-time analytics capabilities will gain the competitive advantage by optimizing in-market campaigns based on customer responses, and continually improving the decision rules that automate the insight-to-action cycle.
By building a history of timely and consistent interactions with individuals instead of demographic types, the winners will see real payoff in the form of improved business efficiency and greater customer loyalty.
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