Becoming a Customer Intelligent Enterprise (CIE)

Becoming a Customer Intelligent Enterprise (CIE)

Understanding your customers is a key strategy in preparing your business to not just respond to customer needs, but to anticipate them. According to a recent report from Aberdeen, improved customer intelligence empowers organizations to profitably define, identify, and respond to high value customers. This report also states that 74% of best-in-class companies across industries say improving customer intelligence management practices is the top motivator for creating a culture of customer-centricity.
This statistic highlights the growing emphasis on customer intelligence in the global business arena. However, they do not speak to the struggles many enterprises currently have in converting internal customer intelligence into market-facing action that will lead to increased sales, decreased costs, and improved retention. In fact, many companies fail to demonstrate a deep commitment to customer intelligence because of organizational barriers. To describe those organizations that do demonstrate this commitment, we have coined the term ‘Customer Intelligent Enterprise,’ or ‘CIE.’
In our work over the last ten years with hundreds of companies in a variety of industries, we discovered a common set of characteristics which define the Customer Intelligent Enterprise. These characteristics include: investment in the Voice of the Customer (VOC) and customer anthropology; the internalization of customer-centric attitudes, behaviors and processes; adeptness in market agility; and avoidance of operational silos that erode customer-centricity.
By embracing the traits outlined in this paper, enterprises will reap the benefits of customer intelligence, including the competitive advantage that comes with effectively converting customer intelligence into action in an increasingly turbulent and customer-centric global business environment.

Characteristic #1: A CIE Invests in the Voice of the Customer
The Voice of the Customer can be a key differentiator in today’s hyper-competitive economy. Successful organizations translate customer insight into customer-centric action plans for its people, process and technology. However, the complexity of today’s market often makes it difficult to effectively track and act upon the VOC. Technology, media and the Internet have altered and expanded the channels where brands engage with their customers. As a result, customer data is fragmented throughout multiple channels and reporting systems.
The Voice of the Customer provides a map of the customer's decision environment so that you may prepare a more effective strategy. VOC also enhances your understanding of design-in or purchasing criteria so your value proposition can be tailored to resonate with the organization's decision-makers.
Establishing the VOC within an organization requires commitment to a customer insight program that reflects the channels with which target customers engage. VOC is defined as customer needs, motivators and requirements, stated or unstated. These requirements are identified through a combination of discovery techniques including one-on-one interaction, customer specification, observation, interviews, focus groups, surveys, customer service data collection.
The idea of VOC first gained popularity in the 1990s; however, it has become more mission critical to enterprise in the ensuing years. In fact, over 80% of companies now sponsor either formal or informal VOC activities.
An investment in establishing the VOC brings the customer to life in 3D rather than in the one-dimensional demographic profiling of the past. Savvy VOC programs embody behavioral and psychographic variables (attitudes, interests, opinions, lifestyle), as well as demographic variables. With a complete Voice of the Customer, a business can better put to work its resources for the customer.

Characteristic #2: A CIE Practices Customer Anthropology
To become a sustainable CIE driven by the VOC, an enterprise must develop an ongoing and evolving anthropological capability. An anthropologist specializes in the origin, behavior and development of humans. A customer anthropologist specializes in origin, behavior, and development as they relate to the customer.
Customer anthropology is an emerging best practice. Leading companies such as Intel, Volkswagen, Microsoft, and Steelcase Inc. have turned to customer anthropology to improve their understanding of customers and to maintain their connection to the VOC. While success stories abound from companies who have hired actual ethnographers to examine their customers in either one-off studies or reoccurring programs, enterprises can also become their own anthropologists with a modicum of time and commitment, with immense tangible benefits that build and keep customer intuitive capital within the organization.
The pervasive customer intuition that can be engendered by an anthropological program leads to optimization of enterprise fundamentals. Development of these fundamentals leads to identification of new products or markets, reduced research and development cycles, more effective customer servicing, increased customer satisfaction and retention, fine-tuned competitive awareness, and stronger product efficacy.
Aspect Medical Systems, a medical device manufacturer, asked its executives to spend time working as anthropologists among its customers in order to redesign its primary product, a device which helps anesthesiologists measure the appropriate amount of anesthesia to deliver to a patient.
To do this, the executives donned surgical scrubs and observed anesthesiologists at work. Very quickly, they realized that their current product configuration was unwieldy and not able to stand up to repeated use, and their input allowed Aspect Medial Systems address these issues in the product’s redesign.
As a result, their newly-launched product – with a design based almost completely on information gleaned during their anthropological missions – is now in use in more than 25% of U.S. operating rooms.

Characteristic #3: A CIE Is Customer-Intuitive
Successful CIEs operate from the VOC. They are able to rapidly make sound decisions because they have internalized the VOC and have become customer intuitive. The diagram at right illustrates a Customer-Centric Intelligence Pyramid.
Organizations that are not customer-centric fail to either gather sufficient data (market research inputs) or to extrapolate their data into expert knowledge (market research expertise). CIEs operate from the apex of the Customer-Centric Intelligence Pyramid, as they are able to make knowledge actionable. Customer intuition leads to leaner, faster decision-making cycles within the CIE, and these decisions adeptly integrate the VOC.
Technology has facilitated Customer Intuitive Enterprise. Information and communication advances, such as the Internet, have helped enterprise make great strides in breaking down actual and perceived barriers between customers and companies. These information and communication barriers were the bottlenecks to customer intuition, often preventing access to and socialization with the data and knowledge needed for customer-intuitive decision-making.
Hallmark Cards is a CIE that is nimble and responsive to the VOC because it is customer intuitive. Hallmark has created a set of proprietary online communities entitled the “Hallmark Idea Exchange” with a stated goal of bringing customer feedback into the company’s decision-making processes.
For the last six years, the Hallmark Idea Exchange has been used by the company to gather data and knowledge on everything from products to merchandising, and has allowed them to Alpha and Beta test planned strategies and innovations. Hallmark’s CIE model has been so successful that it has used the data, knowledge and customer intuition garnered via its online communities to create new product lines, based solely on customer needs and wants as expressed via the Idea Exchange.

Characteristic #4: A CIE is Market Agile
In today’s global economy, the only that thing that is constant is change. Although it has been said a thousand times, it remains an enterprise imperative: The long-term viable CIE must be alert, connected to reality, and ready to respond when change presents itself. Market-agile CIEs are well positioned to not only weather change, but to prosper from it. A CIE has a customer intelligence infrastructure based on VOC, customer intuition, and anthropological studies – all of which allow it to act quickly as market conditions inevitably change. While competitors languish, unsure of how to meet customers’ changing demands or even how to address new customer segments, a CIE has already anticipated, prepared for, and addressed these changes with effective and intuitive customer solutions.
Studies have shown that companies excelling in market agility generate higher proportions of new business sales with new products than their competitors, while also identifying, developing, designing, and launching new products more quickly than do other companies. The common denominator among these companies is an embrace of the VOC throughout the organization that allows them to turn intuition into action.
To further underscore the benefits and importance of market agility in the current business climate, consider that 75% of executives at global companies with more than $500 million in revenues admit that their organizations are not sufficiently market-agile. With a perceived competitive handicap recognized by the world’s leading businesspeople, neither the mission-critical nature of market agility nor the CIE market opportunity this handicap represents can be understated.

Characteristic #5: A CIE Avoids Silos
A CIE should operate free of silos. Executive leadership within the CIE must require employees to move data outside of silos and into a shared environment such as a dashboard or intranet. Enterprises find themselves moving away from a siloed infrastructure in times of crisis, when a ‘sink or swim’ modality, requiring information to be shared in real-time, overtakes a siloed culture out of necessity.
According to a survey by the American Management Association, 83% of managers acknowledge the existence of silos within their organizations. Of these managers, 90% believe they have a negative effect, and an additional 7% say they are destructive.
Siloed information is only available to the department or individual within an enterprise that is holding it, preventing any other part of the enterprise from making decisions in the manner CIEs make them.
In a CIE, silos are banned because they present a barrier to the best qualities of a CIE; they prevent investment in VOC, make customer-intuitive decisions, practice customer anthropology, or be market agile if silos are present.
Enterprises often struggle with converting internal customer intelligence into external action that leads to increased sales, decreased costs, and improved retention. However, the case for adopting the traits of the CIE in a global business environment that increasingly requires customer-centricity is easily made.

Al Nazarelli Written on Monday, 25 April 2011 21:35 by Al Nazarelli

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