Customer intelligence translates to better customer service.

By David Lustig

Ask direct response professionals how they define customer intelligence (CI) and it can become a little like asking different people to describe the color blue. Everyone’s answer will probably be in the same ballpark but all will have their own personal take on it.

Bill Trenchard, CEO of LiveOps in Palo Altos, Calif., explains that customer intelligence “is the practice of collecting, managing and using customer data to provide more value to your client.”

“It’s a company’s ability to acquire and apply information about customers to drive business results,” says Kathy Carter, vice president of operations at Convergys Corp. in Ogden, Utah. “It can include the history of the customer or demographics that might push the call to a different offer, depending on the propensity to buy. It can be something as basic as capturing information during the original call and taking a different path in the call script or knowing that the prospect has received a certain mailing or watched a certain commercial.”

Andy Arvidson, owner of Imagine Fulfillment Services in Torrance, Calif., defines customer intelligence as “…the data, which provides insight in understanding your customer in terms of how they react to your product, offers, marketing and other attributes. In a nutshell, Customer Intelligence = Customer Feedback that can be evaluated and analyzed to make better marketing decisions in the future.”

Shari Altman, president of Altman Dedicated Direct of Rural Hall, N.C., believes it is “The science and art of being able to understand customers and prospective customers…to be able to think like them, to understand their motivations, needs and fears; what excites them and what annoys them.” Often, she says, a brand or product has multiple customer segments, each group of people purchasing for somewhat different reasons. Having customer intelligence means understanding the motivations and needs of each group.”

“It’s both a science and an art,” continues Altman, “because while you can measure responses and replies [the science part], there is an art of interpreting what these things mean and what, in turn, you as the marketer should then do with the information. Customer intelligence is gained by digging deeper, not just getting the order, but understanding the customer who placed the order.”

HOW DOES IT APPLY TO MARKETING?
Adam Hanks, vice president, business development in Provell in Minneapolis, Minn., defines customer intelligence as, “…knowing your consumer on many levels, including demographics; buying frequency and volume; what motivates the consumer to buy, and what sales channels are most effective for the offer.”

Jennifer Nading, print director for Synergixx of Glassboro, N.J., sees customer intelligence as a “qualified lead,” someone who has received enough education on the product or service prior to calling to place the order without much more explanation or coercion.

“A customer who has just viewed a 30-minute infomercial will naturally have more ‘intelligence’ about the product and how it works than if [he or she] had heard a 60-second radio spot,” Nading says. She adds that similarly, someone who read a full-page advertorial will be more educated when he or she has finished reading than someone who read a billboard on the drive home.

So with similar yet different ways to answer, the implementation of use of customer intelligence takes on a little bit of a life of its own rather than walking down the same set path. Refining it a little more, how does CI specifically apply to direct response marketing?

“CI can be used to identify the target market,” says Convergys’ Carter. “Knowing customer history and demographics allows us flexibility with offers. If we can spend the time with the customer who has the highest propensity to purchase, we can increase conversion and revenue.”

Imagine Fulfillment Services’ Arvidson believes CI in direct response is a clear understanding of the effectiveness of direct marketing based on product hierarchy, messaging, product placement, marketing activities, and the manner in which customers interact and react to a message and product.

“A huge source for this intelligence can be found by the channels in which a customer chooses to interact with the business,” he adds. “That is, customer service, a company’s Website, sales representatives and feedback forms.”

Provell’s Hanks contends that knowing more about your target consumer helps corporate marketing campaigns to be more efficient and cost-effective.

“It’s the difference between a ‘shotgun’ approach versus an aimed rifle,” he says. “In many cases in DR marketing, a fine-tuned and tested script can make a great difference in overall response rates.”

On defining CI, Altman believes you can’t make a second sale without some level of customer intelligence…”and direct response marketing, where profitable, is almost always about a second sale.

“The bottom line,” she says, “is that if you don’t understand why the prospect called or came to your Website, or why the customer made the first purchase, you will be hard pressed to sell them anything else. And if you can’t sell to customers more than one time, with few exceptions, it’s very hard to generate a profit.”

“DR marketing is data driven and using customer intelligence can turn a marginal campaign into a winning one,” says LiveOps’ Trenchard. “The call center is the first point of contact for the customer. The intelligence collected on the customer can then be used on the initial contact as well as further ones. As a company markets other products and services to its customer base, the company can use CI to create more value for its customer.

“At LiveOps, we start collecting information on the customer once the call hits our system and continues until the call is over. We have a Web-based real-time reporting system that our clients use to quickly analyze data and detect trends in their customer behavior. In DR, clients need to have this data at their finger tips to respond to changes rapidly.”

Synergixx’s Nading feels that DR advertising uses the story behind the product to sell the product.

“Whether that story is translated via a demonstration or a personal testimonial,” Nading says, “customers want to be sold on the story behind the product before they will call to purchase.”

THE BUILDING BLOCKS
Okay, we have all this information and expert opinion about customer intelligence, how important is it really in building a database and ultimately, higher profits for the company?

“Good customer intelligence helps you to develop products and offers that customers want,” says Altman. “It is much easier and more profitable to ask your customers what they want, then make it-or go get it, and sell it to them, rather than to make products and then hope you can find customers who want them.”

“Understanding customers means understanding their experience in total,” says Arvidson. “Customer intelligence will allow you to see which part of the direct marketing process is not working and needs improvement.”

Convergys’ Carter contends that effective deployment of customer intelligence can result in quantifiable business impact, including improved revenues, reduced costs and increased customer satisfaction.

“CI allows agents to spend more time on those customers who have the highest interest in the product or offer,” Carter explains. “This saves valuable talk time when handling TV-driven calls. Certain types of knowledge management can assist in this process, either through the use of databases, real-time predictive modeling or real-time decisioning.”

It’s important, says Hanks, because for most companies, marketing budgets are finite and companies need to maximize the returns on their marketing dollars to achieve the desired results.

“With the possible exception of some forms of Internet marketing,” Hanks adds, “where a high volume of impressions leads to an expected percent of sales-the numbers game-targeted marketing enabled by customer intelligence allows DR companies to get the most out of their marketing dollar.”

Synergixx’s Nading feels some product owners/investors settle on DRTV half-hours as their message vehicle, because they think that the more expensive ticket means they are getting more bang for their buck.

“In reality,” she says, “using a marketing vehicle that is right for your product is more important and will gain you more than just going with the most impressive price tag.”

SECRETS OF CUSTOMER INTELLIGENCE
What are the keys to achieving customer intelligence? “The best way to make sure you are creating educated or ‘qualified’ customers is to make sure your marketing message is clear.” Nading says. “Choose one to three main points about the product and reiterate them throughout your message. The clearer your message, the faster the customer will ‘get it’ and call.”

Arvidson says we need to systemize and organize the data collection for use.

He says that other issues are: How does the organization obtain customer feedback? Who handles the customer initially when the feedback comes in the form of a telephone call? Does the call get transferred to the proper department? Who handles the call, if the complaint is about poor service? How is feedback given to the people responsible for the poor service? Are managers trained on how to give negative feedback to their staff? Does customer feedback result in changes?

“These questions are vital because if not addressed properly, you will lose on customer intelligence; and thus, not have the means to make valuable business decisions in the future,” he contends.

“Listen to customers!” says Altman Dedicated Direct’s Shari Altman. “Pay attention to what they say. Be open and allow customers many ways to communicate with you. Ask them their interests on the phone, send surveys for their input and query them when they place orders. If customers know you want to hear what they have to say, they will share. All of us are interested in giving our opinion when we know someone wants to hear it. But don’t be pushy or demanding…some customers are very private and will never want to share anything. Some of the best product ideas can come from customers.”

David Lustig is a contributing writer to Electronic Retailer magazine. We would appreciate your feedback. To send comments or questions, point your browser to customermay.marketing-era.com.