Smart Marketing -
Article Four

Understanding the Business as much as the Consumer
So far in our “Smart Marketing” series we’ve discussed the concept of Customer-Centric Intelligence, provided some examples, and last week, we presented the three stages involved in identifying the consumer insights required.  Readers will recall that a key factor in reviewing consumer insights is the collection and review of all that which has been obtained by the company already – often the answers will have already been collected by some department or manager somewhere in the organisation.

This approach – of looking within the organisation first - is a key tenet of the all-encompassing Customer-Centric Intelligence philosophy.  And, as well as doing this in the journey towards better consumer understanding, when companies examine the data and interfaces at this sort of cross-disciplinary level they often find they can make improvements and cost savings within their own operations as well. This is a key differentiator between most marketing paradigms and that of Customer-Centric Intelligence – by better understanding the myriad of processes operating within a company, a business is able to avoid the classic pitfalls of an overly knee-jerk reaction to competitor activity…a SALE or by reducing prices– one which all to often leads to reducing margins and the cycle of ever-decreasing returns.  In this way, managers are able to step outside of the “one-way-pushing-stock” model, but moulding their company into a business that knows itself as well as its customers – and thus knows how profits can be increased whilst also adding more benefits for the customers.

Of course, most businesses do understand their internal processes very well – but there are often two issues that override this understanding.  First is that each department is viewed on its own and not as consumer-centric operation, and two, in most cases the measures are those designed and used by accountants.  The Customer-Centric Intelligence approach incorporates such traditional internal measures into such aspects as wider industry and consumer measures.  For example, many Customer-Centric Intelligence practitioners develop “dashboard KPI reports”, which are regular top-line reports of measures such as campaign costs, DM response rates, product-movements, customer lifetime values, and customer complaints, as well as industry benchmarks recorded by third-party researchers.  Pre-set thresholds can alert managers to situations outside the norm before traditional measures would notice – thus enabling greater management flexibility and faster response times.

Another measure often utilised by Customer-Centric Intelligence practitioners is human resources management.  In many companies, HR is almost a stand-alone unit, charged with reducing turnover and absenteeism, increasing morale and productivity, and ensuring the legal position of the individual and the company are adhered to.  But in some industries (particularly retail, in which a high proportion of a company’s staff are “customer facing”), the customer transaction data held on database can yield many insights which can be used to improve the management of staff distribution, performance, seasonal labour, training, retention and even pay and bonuses.  As with the dashboard KPIs, integrating outside data can also be beneficial in this case, with factors as varied as the weather, competitor activity, mystery shopping and major social events all contributing to HR demand / availability, and thus able to be measured and utilised for more efficient management.

Last week’s article also mentioned the many online analysis products which can be used in order to analyse various sales channels – suffice to say, these can also be used to conduct a large variety of financial analysis, such as the following:

• Budgetary analysis: especially to examine the outcome of specific marketing campaigns right through the entire supply chain;
• Financial ratio analysis: in areas such as debt-equity, and liquidity ratios;
• Profitability analysis: e.g. to examine the profitability of retail operations from a geographical region down to individual stores’ departments;
• Fixed asset return analysis: used to analyse financial viability of fixed assets owned or leased by a company.

Such analysis of the supply chain and all it entails need not be restricted to that which occurs within a company however  - as stated earlier, competitor and environmental measures can also be integrated.  In addition, vender performance analysis can often prove worthwhile – not only checking factors as cost, but response times, order accuracy, payment conditions etc, all in order to extract what is required.

An important note to make clear at this point of the Customer-Centric Intelligence discussion is that analyses such as those discussed this week need not always be oriented around reducing expenditure. It remains paramount to keep consumers’ needs in mind, and whilst a better understanding of consumer needs will often bring the increasingly common call for “more channels / interactivity / customisation / flexibility” etc, providing for such needs can be kept to a minimum if the internal processes of the business are better understood.  This is one of the beauties of Customer-Centric Intelligence…it works for your customer and it works for you!  

Next week we will cover what needs to be included when building the customer-centric model into an IT solution – and how Digital Asset Management systems can ease your workloads.