MANAGEMENT: Maximising the Value Of Customer Information
Recent Gauteng Business News
According to Greg Bogiages, Director of Cortell Corporate Performance Management the old adage 'the customer is king' holds true to this day. After all, without customers a business is nothing, they are at the end of the day its sole source of profit. It is also commonly acknowledged that retaining existing customers is easier, not to mention less expensive, than attaining new ones.
It stands to reason therefore that knowing everything you can about your customer is vitally important. But with many organisations these days having multiple services and offerings, customer information can become confused, and it becomes difficult for businesses to truly understand customers, and on top of that, to realise the true cost of servicing a particular customer.
Establishing a single and consistent view of the customer across divisions, branches and other traditional silos is the first step in being able to leverage the true value of customer information.
Having a holistic view of the customer enables businesses to make smarter decisions based on accurate information, and allows organisations with different offerings and services to take advantage of cross selling opportunities that may not have been apparent without this view. Another thing to bear in mind is that for a single customer view to be truly effective it needs to be shared across the organisation, to any department
or division that has customer contact.
However, creating a single view of the customer is no longer enough. In the modern business world the true value of this information can only be harnessed by using tools such as Business Intelligence (BI) and analytics along with complete customer information. This helps to create a 360 degree profile of the customer, who they are, what services they use or previously used and so on. It also gives insight into the real profitability, or lack thereof, of a customer.
The fact is, approximately 20% of your customers generate around 80% of the company's profits. Without a holistic customer view and the ability to analyse this information it is not possible to identify who the truly profitable customers are, and if you cannot see who they are, you cannot see which customers to deliver added incentives to.
You may also miss out on opportunities to up sell or cross sell, and could also misinterpret the true cost of the customer. With such a view and analytical tools in place, it is easier to attribute the cost to service a customer, something which could reveal that customers you thought were profitable actually cost your business money.
Having a complete and accurate view of customers can also bring about a more thorough alignment of interactions with a business' overall strategy. All processes ultimately need to be aligned with customer information, and for many organisations a major part of strategy is to maximise customer retention and minimise customer attrition.
You can only hope to hold on to customers if you know what they are doing and whether or not they are happy with customer service levels. BI and analytics used in conjunction with complete customer information can be used to identify trends and patterns to see which customers may be likely to leave, and to deliver better customer service for these and other customers.
The applications of accurate customer information coupled with BI and analytics go much further than customer service, however. One of the emerging trends in the use of these tools is fraud detection, where they are used to identify patterns of behaviour and flag unusual behaviours that may indicate fraudulent activity. These types of heuristic, or 'learning' tools are the future of BI, and can be used across many industries to identify current trends and project these into the future to forecast events, allowing faster response times and ultimately a greater competitive advantage.
One concept that causes concern over the 'single customer view' is that it creates an environment where people have too much information that they need to sift through, and cannot therefore make good decisions. In order to prevent this from happening, it is necessary to apply BI tools that highlight exceptions and relevant behaviour so that the right people get the right information at the right time. Intelligent tools can sift the right information out and deliver this information in graphic formats that can highlight patterns, trends, exceptions and so on, for ease of use and better customer service.
Security can also be an issue, which necessitate having controls and permissions in place to ensure that people only have access to relevant information that is essential to them doing their jobs. Access needs to be controlled to prevent people getting hold of information that they do not need, which can be dangerous to an organisation.
However, if these concerns are adequately addressed, a holistic customer view can provide many benefits to an organisation and can serve as a source of considerable competitive advantage. At the end of the day, customers are the pivot point of any organisation. Without customers there is no profit, so understanding your customer and having access to accurate and complete information is the best way to improve customer service and keep your business in business.
Business News Sector Tags: Management|