Customer Intent: Profit by Understanding
Businesses are reaching the limits of what success they can achieve through process reengineering and traditional strategy models, according to a new Gartner report. "The Next Phase of CRM Is a Customer-Intent-Driven Organization" indicates that companies can only do so much without understanding the relationships they have with each individual customer. Understanding customer intent will require a new array of tools and metrics, according to Gartner vice president and research fellow Michael Maoz.
Fifteen percent of all organizations likely will have moved to intent-driven customer strategies by 2010, and will have achieved a marked advantage over those that haven't, according to the report. "Building an intent-driven organization requires more than just matching the intent of the customer during an interaction with the intent of the organization," Maoz writes. "It requires integrating the organization into the customer's life so that the intent of the organization (typically revenue and profit growth) is met while pleasing the customer."
The difference is a matter of whether the horse goes before the cart or vice versa: most organizations offer products and services on their own terms, choosing where, when, and how to sell to their target market. While businesses have become fairly adept at guessing what combinations will work best, and the processes that drive them internally have become very efficient due to standardization and refinement, standard methods don't always apply when dealing with individuals. "The idea that there is a single correct way to run an organization is valid in many aspects of the organization (such as product development, supply chain, manufacturing, finance, and HR)," Maoz writes. "However, the concept of a uniform approach does not apply in situations where the correct action varies, and is dynamic and based on the unique and changing needs of the customer (for example, where the criticality of the customer's problem or the current state of the account determines the response to the customer."
Achieving a business process driven by customer intent is not as simple as merely deciding to do so, however. Maoz notes that customer needs vary by life stage (or life cycle, in B2B situations), health of the customer's relationship with the company, and the strength of competition. No business can know everything about every client, but smart companies will consider as many possibilities as they can, and try to understand why customers use their products or services, as well as how they view the company. "Understanding the customer state requires continual monitoring of customers' needs and their relationship with the organization. Create customer process maps, modeling the steps through customer experiences," Maoz advises. "[These maps] must not take a limited, departmental view, but must be seen through the eyes of the customer." While companies have focused on data collection to accumulate customer insight, they rarely deliver value in exchange for that data, which has led to skepticism and distrust of the method. "Organizations must explain to customers what the specific benefits are of enabling certain pieces of data to be gathered on them and used," he concludes. By using data collection to improve the customer experience, rather than for direct corporate benefit, the organization reaps benefits anyway via the value of improved relations.
The report uses health insurance as an example of how intent-driven business can work. A customer's child turns 18 and heads off to college. The young person looks for a doctor affiliated with the health plan system, and contacts the insurer, only to be told that the doctor is outside of the plan's coverage area and the visit will not be covered. This negative interaction could go down a very different way, according to Maoz. "The business has enough family data to notify parents when their children are in their senior year of high school that, should the child move away after high school, they will need to see if their child is still in their coverage area. Since the family's intent is to stay covered, and the business's intent is to keep the family as a customer, the business must follow the customer's intent by building in a business rule that triggers a message to the insurance broker or directly out to the customer that their coverage needs may change."
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