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With social media, there's no excuse for not knowing your customer.
For the rest of the March 2012 issue of CRM magazine please click here
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Ever-changing and maturing digital technologies empower your customers, allowing them to find what they want, at the prices they want, anywhere in the world. Digital technologies put substitutes in easy reach, and social technologies and online reviews put more information about your products in your customers' hands than you likely have available to you.

Competing today requires more than being "customer-centric." Many strategies you've historically used to compete have been commoditized. Now cloud services provide all the computing power and resources you need, commoditizing years of IT investments. Being customer-centric on top of now commoditized areas of differentiation means nothing.

Customer obsession provides true advantage. Organizations must shift investments to this obsession and build customer knowledge, an asset resistant to technology disruption.

Tapping into and sharing customer data from all sources lets you see customers in a new light. Exploiting this information can lead to new ways of servicing customers and establish stronger connections with them to help you design future products.

Customer knowledge informs corporate strategy. Procter & Gamble (P&G) uses real-time analytics to understand customer sentiments based on comments and feedback posted on the Internet. This informs P&G's strategy daily, prompting changes in investments and actions based on what's happening now.

Delivering Customer Knowledge Isn't Easy

Despite the billions spent annually on data management and business intelligence, many organizations are no closer today to solving their customer data management problems than they were five years ago. This is largely due to several immature strategies and misconceptions.

1. Today's data management strategies aren't ready for big data problems. The emerging big data problem presents unique challenges to building customer knowledge. To build customer knowledge, you not only have to harness data from your internal systems and employees, but from all over the Internet.

2. Big data is a problem that needs a technical solution. Firms invest in solutions like Hadoop, Aster Data, and Netezza to support big data problems. But getting data hasn't been the problem. By investing in this technology without organizing to solve a business problem, you risk overreaching on scope, spending, mandate, and long-term success.

3. Technologists think arming "tech-challenged" marketers addresses the problem. Fact: Marketers are not tech-challenged because they don't understand technology. What makes them tech-challenged rests with how their customers use technology. Only when consumer tech innovation stops will marketing and customer intelligence professionals be able to catch up.

4. Skills and people needed to build customer knowledge suffer from functional myopia. To build customer knowledge, you must invest in skills to help identify the questions to be answered, how to analyze data to answer them, and how to analyze data to answer future questions. People competent in these areas often sit in disparate functions, collaborating more with functional peers than each other.

5. Organization design can't keep up with customer demand. Old models of channel- and product-specific command and control just don't cut it. Customer-obsessed marketers rethink business structures, reward methods, and organizational design—all focused on the customer.

Build a Winning Team

Build a team consisting of the right roles, competencies, and resources to build and deliver customer knowledge. Identify how you will organize, analyze, and apply this knowledge. Don't just focus on the obvious marketing issues, like personalization, relevance, and targeting. Force the team to look at adjacent applications of this data that drive the next generation of innovation.

Arm this team with technologies and approaches like Hadoop, NoSQL, and predictive analytics. Alone, they don't address the root cause of tech-challenged marketers. But in the hands of a team, they can help you establish true competitive advantage.


Kyle McNabb and Suresh Vittal are vice presidents and practice leaders, serving business process and customer intelligence professionals, respectively, at Forrester Research.


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