CRM

3.6 Increased incorporation of customer knowledge and customer analytics 49

3.6

m

m

Increased incorporation of customer

knowledge and customer analytics

Another emerging realization in analyst firms is that knowledge about the cus-

tomer will play an ever-greater role in CRM. The day is coming when

companies will be able to profile their existing customers, understand impor-

tant characteristics (e.g., profitability), and incorporate that information into

their sales and customer service interactions. As Jon Anton of Purdue Univer-

sity says, "This ease of customer access is fast emerging as the critical element

of global business strategy. In the not-too-distant future, customers will deal

preferentially with those companies that are deemed to be most accessible in

terms of mission-critical information seamlessly integrated throughout all

customer touch-points."15

Today, most companies already incorporate the ability to identify and

give preferential treatment to their "gold-level" customers. Similarly, the latest

generation of customer portals provides targeted advertisements to individual

demographic groups of customers.

One of the more interesting recommendations to come from the analyst

communities is that companies should use this analytical knowledge to "fire" a

portion of their customer base. According to Meta Group, for example, a

company should stratify customers based on customer profitability (how

much), customer loyalty (how often), and customer latency (how many). 16 In

essence, the company should analyze past buying behavior in order to deter-

mine this customer's net value to the company. While this transactional

approach is both logical and common, it lacks a basic understanding of what I

like to call the "Uncle Dave" effect (a.k.a. "viral marketing").

The Uncle Dave effect works like this. You are a consumer of products

and services offered via the Internet but have neither the time nor the patience

to spend time actively investigating new Web sites. Your Uncle Dave, on the

other hand, can think of nothing better to do. In the process of visiting a

number of new sites, Uncle Dave has placed himself on the mailing lists of sev-

eral companies. While he rarely purchases anything himself, Uncle Dave

frequently forwards you (and his other friends and family) marketing oppor-

tunities that he thinks you might be interested in. While he doesn't always hit

15. "Call-center Performance Benchmark Report," Dr. ion Anton, Purdue University.

16. Meta Group Customer Relationship Management Conference, Breakout Session Notes, "Customer

Behavior Modeling: Getting Intimate with the Customer."

I Chapter 3