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Learn about consumer intelligence to enhance consumer experience
Consumer Experience Unified Consumer & Market Intelligence Solutions By: Jaiveer Singh Chand Version 1.0 Jan 2009
Consumer Intelligence Consumer intelligence is everywhere, and it's the core value in finding lifestyle relevance. Relevance makes us laugh and admire, but most importantly it makes us buy. Stay in tune with your customer and make connections with them at every opportunity. The success of your company depends on the creation of products and services relevant to your consumer's ever-changing interests.
Converting Consumers into Customers Consumers are people/ organizations who consume/use products/services so in other words they define market. Consumers can be classified on various parameters e.g. demographics, lifestyle patterns, similar products/ services consumers, substitute/alternative products users and so on. A consumer could be your prospect customer and therefore you need to reach him with relevant offer. Intermediaries like distributors & retailers may also act as customers to reach to target consumers.
Organization View Consumers How do you know/reach to potential customers How do you optimize your offerings to retain customers and keep them profitable as well Marketing can be described as the set of activities that are undertaken in order to generate leads, while selling is the act of turning a prospect a hot lead into a buyer and later a repeat customer.
Prospective Customers Touch Points Store Direct Mailer TV/Radio
Consumer Intelligence <ul><li>Think of " consumer intelligence " as the sum of all activities that explain overall customer behavior. </li></ul><ul><li>Customer performance in catalog marketing campaigns. </li></ul><ul><li>Customer performance in e-mail marketing campaigns. </li></ul><ul><li>Customer performance in online marketing campaigns. </li></ul><ul><li>Database Marketing, the traditional role of direct marketing campaign execution. </li></ul><ul><li>Organic customer performance ... what customers spend when not marketed to (a very important concept in retailing, not well understood in the online environment). </li></ul><ul><li>Business Intelligence, the software tools and general ad-hoc queries that help solve generic business questions about customers, merchandise performance, and store performance. </li></ul><ul><li>Social Media Experts, folks who thoroughly understand how customers are interacting with tools like Facebook, Blogs, Twitter. </li></ul><ul><li>Customer Advocates, the folks who strongly believe that companies require "Chief Customer Officers" to better understand the challenges facing customers. </li></ul><ul><li>Multichannel Ombudsmen, the folks who understand customer behavior across channels, and then try to develop strategies like "Buy Online, Pickup In Store" that can be implemented by various channel leaders. </li></ul><ul><li>Lifetime Value, the net present value of all future customer transactions. </li></ul><ul><li>Statistical Modeling, condensing customer behavior down to an equation that explains customer actions. </li></ul><ul><li>Marketing Research, including surveys and focus groups. </li></ul><ul><li>Merchandise and Market Share Analysis, source from databases like NPD, Scarborough and Simmons. </li></ul><ul><li>Competitive and Customer Research from organizations like Forrester, Jupiter, Gartner. </li></ul><ul><li>As our marketing world becomes more fragmented, with terminology and techniques that are unique to each discipline, it will become more important for a "Consumer Intelligence" expert to tie together each discipline. </li></ul>
Customer Intelligence <ul><li>Customer Intelligence is the process of gathering, analyzing and exploiting information of a company's customer base. Information is typically obtained about customer existing and future needs, customer decision making processes, customer behaviour and trends as well as using data about the competition, conditions in the industry, and general economic, technological, and cultural trends. </li></ul><ul><li>Customer Intelligence enables senior level managers and executives responsible for the customer experience to: </li></ul><ul><li>Define and measure the customer experience </li></ul><ul><li>Understand the experience of their customers </li></ul><ul><li>Identify the reasons why customers call </li></ul><ul><li>Maximize loyalty and retention </li></ul><ul><li>Gain market and competitive intelligence </li></ul><ul><li>Increase sales effectiveness </li></ul>“Know your customers and give them what they want” is the fundamental principle of marketing.”
Why loyal customers are so important <ul><li>Loyal customers: </li></ul><ul><ul><li>Purchase your products and services again and again over time </li></ul></ul><ul><ul><li>Increase the volume of their purchases </li></ul></ul><ul><ul><li>Buy beyond traditional purchases, across product lines </li></ul></ul><ul><ul><li>Refer your company's products and services to others </li></ul></ul><ul><ul><li>Become immune to the pull of the competition </li></ul></ul><ul><ul><li>Give your company the benefit of the doubt when something goes wrong. </li></ul></ul><ul><li>Why does investing in loyalty management, customer satisfaction and retention make such sound business sense and produce measurable bottom-line results? Here are just some of the reasons why: </li></ul><ul><li>It costs 7-10 times more to recruit a new customer than to keep an existing one. </li></ul><ul><li>A gain in customer loyalty of only 5% can lift lifetime profits per customer by as much as 95% </li></ul><ul><li>An increase in loyalty of just 2% is, in some sectors, equivalent to a 10% cost reduction. </li></ul><ul><li>The numbers are similar when it comes to the importance of increasing employee loyalty. </li></ul><ul><li>For example, an increase of 5% in employee retention can yield profit increases of 25% or more. To put this in context, consider a company of 1,000 employees with $200 million in annual revenue that experiences an attrition rate of 20% year. The cost of attrition will be roughly $4 million per year and the potential negative gross margin impact will be $30 million. Yet 91% of companies never measure the cost of employee turnover! </li></ul>
360 Degree View of Customer Customer View of the Enterprise or Enterprise View of the Customer ? 360-Degree View: Treat customers throughout the business cycle based on their lifetime profitability. There are three major goals of profitable relationships. <ul><li>The first is to make existing profitable customers more profitable. This is accomplished by one-to-one marketing in cross-selling and up-selling existing customers. </li></ul><ul><li>The second is to acquire additional profitable customers. This is a function of customer profiling and target marketing. </li></ul><ul><li>The third is to turn unprofitable customers into profitable ones. This can be accomplished again by cross-selling and up-selling. It also means doing analysis to understand individual profiles, and then identifying and chasing away (or sending to competitors) customers who will never be profitable. </li></ul>
360 Degree View of Customer <ul><li>A true 360-degree view is obtained by encompassing all stages of the business cycle. This approach incorporates data from both the back office and front office, and then combines it with analysis so that employees can add proactive value. </li></ul><ul><li>The result is that people in various roles can anticipate a customer's sales and service needs, leverage analysis information to target marketing campaigns, link to buying histories and billing information, and see the customer's entire relationship with the organization in order to make better service decisions. </li></ul><ul><li>A true 360-degree view also lets customers serve themselves throughout the entire cycle and take their own proactive measures. </li></ul><ul><li>Make Customer-Facing Staff More Effective </li></ul><ul><li>Speed Up Response Times </li></ul><ul><li>Spend More Time with Customers </li></ul><ul><li>Offer Customers a Consistent Experience </li></ul><ul><li>Provide a One-Stop Facility </li></ul><ul><li>Improve Customer Relationship Management </li></ul><ul><li>Identify Important Customer Segments </li></ul><ul><li>Overcome “Ownership” Issues </li></ul>
Customer Analytics <ul><li>Customer analytics can enable strategic decision making, opportunity assessment and revenue prioritization by using data analysis to provide insight to marketing, product development, consumer experience, customer relationship and advertising management. </li></ul><ul><li>Consumer analytics solution can help you build a foundation of data, information and customer relationship management—then use it to effectively profile and create predictive models for delivering the right products, bundles, brands and pricing to diverse consumer segments. It can also help: </li></ul><ul><li>Increase visibility into costs and cost drivers. </li></ul><ul><li>Implement a comprehensive approach to cost management. </li></ul><ul><li>Improve planning and monitoring to maximize returns. </li></ul><ul><li>Enable increased agility in the marketplace. </li></ul>
Customer Analytics <ul><li>Customer Analytics. It is described as being focused on consolidating customer information and the using it to improve marketing and customer service through improved reporting or discovering new insights. </li></ul><ul><li>The most common value proposition is to use the consolidated information for more effective marketing campaigns but some organizations also use it for operations (customer servicing) or to gain financial insights (customer profitability). </li></ul><ul><li>Customer Segmentation Analysis </li></ul><ul><li>Customer Loyalty Analysis </li></ul><ul><li>Cross-sell and up-sell opportunity </li></ul><ul><li>Customer Life Time Value </li></ul><ul><li>Customer Churn Management </li></ul>
Hierarchy of Media Consumers Desires 1 Entertainment Our appetite for entertainment is almost limitless, and our time and dollar budgets are remarkably elastic. However, novelty is a key factor, making this a large target that is nonetheless hard to hit. 2 Communications A clear second to entertainment, this translates into a desire to "be in touch" interpersonally. The most powerful hybrid of communications and entertainment is "particitainment"—entertaining communications that connects us with some larger purpose or enterprise. 3 Transactions Add an entertainment dimension and certain kinds of transactions can become an absorbing priority—this is the appeal of shopping malls. 4 Information Information becomes appealing only when it is harnessed in the service of one or more of the other three desires in the hierarchy, especially entertainment.
Media Consumers Seventy Percent of Media Consumers Use Multiple Forms of Media at the Same Time, according to a study for The Media Center at API. Three quarters of U.S. television viewers read the newspaper while they watch TV, and two thirds of them go online while they watch TV. Key study findings include: * People who regularly or occasionally watch TV and read the newspaper at the same time: 74.2% * People who regularly or occasionally watch TV while going online: 66.2%. * For simultaneous online users, TV viewing is down 8.8% among 18 to 24 year-olds and down 12.2% among 25 to 34 year-olds in favor of video games * What people do as they wait for downloads from the Internet: listen to the radio (52.1%); watch TV (61.8%), read the newspaper (20.2%) * Importance of word of mouth when it comes to making purchase decisions: 72.5% of all consumers say it's very important versus 80% among cell phone users.
Consumer Intelligence – Solutions Consumer Analytics 360 CI
www.twitter.com/singhjaiveer www.singhjaiveer.blogspot.com Global IT Engagement Manager having 16 years of industry experience (Academics from IMT, India, Carnegie Mellon University, Harvard Business Publishing, PMI USA) I occasionally write about enterprise program/ project management, IT governance, collaboration, web 2.0, enterprise 2.0, BI, SaaS, cloud computing, disruptive technology innovations/ leading examples, technology implementation as business differentiator, leading teams and share thoughts on various management books/ articles which I read time to time.