What Is Customer Intelligence and Why It Is a Key to Customer Success
What is Customer Intelligence and why is improving its performance vital to growth. Here’s how you can implement CI in your organization, benefits, and more.
Oct 13, 2020
In this age of increasing competition with other businesses, customer intelligence (CI) is becoming a prominent competitive advantage. We have already known that being customer-centric is paramount for the growth of any SaaS company. But there are various facets of becoming a customer-centric organization.
Many companies claim that they are customer-centric but they hardly understand the nuances of it. For being customer-centric, you need to know your customers well. It all begins with that. You need to understand their challenges, pain-points, interests, and behavior to better evaluate them for your business offerings. And this is where customer intelligence comes into the picture.
Table of Contents
What is customer intelligence?
Why is customer intelligence important?
How CI helps in customer success?
How to improve customer intelligence?
Benefits of Customer Intelligence
Challenges of Customer Intelligence
What is Customer Intelligence?
It is the process of collecting and analyzing customer data with the purpose of a better understanding of your customers. There might be a lot of data present about a customer that they leave during various interactions with your company. Through CI, you collect all of those data and glean valuable insights to understand customer behavior. This in turn is used towards taking informed actions for the growth of your business.
CI also helps in creating customer personas and holding relevant communication with them. When you interact with customers after knowing their background, it makes them feel more valued, understood, and appreciated. This results in creating a stronger bond with the customers entailing customer loyalty and long-term relationships which is essential for any successful company in a competitive environment.
Why is Customer Intelligence Important?
CI is an important tool to leverage the potential of a customer towards greater customer satisfaction, spend, and customer retention. There are various channels through which a customer interacts with your brand. This includes their web-activity, in-app activity, support calls, feedback, etc. CI is the data-driven strategy that helps you gather all these data scattered along different channels to create a meaningful insight out of those. It can be called as a 360-degree customer view.
When you truly understand your customer, you are able to talk to them in their own language. E.g. if you know their interest, you can start your conversation around that which would help you fetch their attention towards your brand. When you have a clear picture of your customer’s interests and behavior, you would be better able to communicate your message to them, and manage them more effectively which makes them feel more connected to your brand. And that’s a prerequisite for any effective customer communication. In fact, according to a recent report published by SmartKarrot, 78% of the respondents say that artificial Intelligence will make CS management more effective.
How CI Helps in Customer Success?
There are many customer success goals and activities that can be accomplished effectively through client intelligence. Few of them are:
Through the right technological infrastructure, you can collate all the valuable customer data to create various customer segments. These segmentations can be formed based on their demography and behaviors. After segmentation, it becomes easier for you to target customers for tech-touchpoints and personalized marketing communications.
You can design your marketing collaterals around their interests, e.g. any common sports which a group of customers likes. And through the right customer success platform, you can execute your customer marketing campaign through just a few clicks.
Churn Analysis and Prevention
CI becomes very helpful in the analysis of churn and thereby preventing it. Out of all the customers who got churned, you can do a root cause analysis and find out the KPIs that majorly affected churn. You can find what were the common attributes in all those churned customers.
To find that, you need to dig into the transactional, behavioral, demographics, and usage data of those customers. A full-fledged customer intelligence management tool can help you study all these data in a meaningful way to identify patterns that are repetitive. Then you need to improvise on your customer success strategies to specifically improve those KPIs that are affecting customer churn.
Personalized Customer Experience
Personalized customer experience is key to promote customer loyalty and satisfaction. And customer intelligence solutions allow you to use the power of information towards that end. In fact, in a study, it was found that 58% of enterprise customers see a significant rise in customer loyalty through enhanced customer analysis (or intelligence).
Understanding your customer is important in helping them proceed in their customer journey. For the top of the funnel customers, it is important that you show them relevant ads to attract them towards your brand. A Swedish boy would be least interested in seeing an ad for Spanish Guitars while searching online for a skateboard. Personalized customer experience can be leveraged only through access to the right customer information.
Advanced Capabilities in predicting Future Events
According to a recent report published by SmartKarrot, 71% of the CS practitioners and respondents believe that the most advanced capability of an intelligent CS solution is its quality of predicting future events.
The top 3 advanced capabilities were denoted as predicting the future events, risks, opportunities and outcomes with a whopping 71%. The next advanced capability was voted to perfectly understanding customer relationships (57%) and auto-learning from the past events (56%). However, people are still apprehensive about a conversational interface, such as a chatbot or voice assistant becoming an useful advanced capability of a smart CS solution.
Helps Teams form better Customer Relationships
When you are hit by uncertain times like COVID-19, companies find it tougher to acquire customers and then to retain them. That is when fostering closer relationships with the customers has proven to be helpful to outlast the crisis. Here, timely customer intelligence and thorough automation can go a long way in supporting customer-centric companies in their mission to understand and help make their customers successful on an ongoing basis.
Triggers Process Automation
Process automation is most sought after when it comes to Reporting (68%), Triggers and alerts (64%), and Health and product usage monitoring (63%), as per the same report. These are also the areas where automation has a powerful advantage and excels organically.
Augment CSM Productivity
The same report by SmartKarrot also suggests that 81% Say CSM Time Saved for Higher-Value Tasks Is the Most Important Benefit of CS Automation.
The top 3 CS automation benefits are CSM time saved for higher-value tasks (81%), Proactive actions (63%), and Easier scaling of CS ops (58%). There are a lot of low-value, repetitive CS tasks and automating these alone will lead to significantly more “customer time” and increased performance levels for CSMs.
How to Improve Customer Intelligence?
Implementing client intelligence in your business and improving its performance is key to your growth. You will be surprised to know that 70% of the organizations are struggling with their current customer intelligence process. While there are numerous articles present online on this topic, here I will break down the whole process into three simple steps. This is how you can implement CI in your organization.
Create a right CI strategy
Invest in data analytics technology
Transform data into cross-functional information
Create a Right CI Strategy
To begin with, you must list out all the possible channels through which you can access customer data. They can be social media platforms, customer service departments, customer success meetings, quarterly business review meetings, and so on.
Then you need to create the right data structures to convert all these data into meaningful information. This will involve automated rules which segregate raw data to different useful information segments.
The strategy should include all the steps from collecting data, to segregate them, to analyze them along with the goals that you intend to achieve. Goals can be customer retention, prevent churn, customer marketing, etc.
Invest in Data Analytics Technology
There are many big-data services that you can purchase like BigML or Google Cloud ML Engine. These services can help you do the predictive analysis along with data modeling to use the data towards your end-goals. Through AI-based CI tools, you can scale and manage large chunks of data and produce actionable insights for your business.
Only by leveraging the potential of AI can you make it a competitive advantage over other businesses in your niche. The earlier you invest, the more effective it will become because it takes time to learn your process and create new ones based on the behavioral data.
Transform Data into Cross-functional Information
The information you would gain from AI-based customer intelligence analytics tools can be used in multiple avenues. You must use the data towards enhancing the efficiency and strategies of different departments. These can be:
Marketing and sales: Use the customer information towards marketing your upsells and cross-sells, as well as to acquire new right-fit customers.
Product management: Based on customer likings and preferences, you can re-adjust your product map to become more customer-centric.
Customer success: Through the right behavioral data, identify the opportunities to effectively engage with customers on a timely basis. Each touchpoint can be used as a means to add more value to the customer.
Benefits of Customer Intelligence
Improves Production and Profitability Improvement: According to a report by Business Parlor, it has been found that by using big data analytics and intelligence, the companies achieved 6% more productivity than when not used. This also augmented their marketing return by almost 15 – 20%.
Engages and attracts your customers: Wouldn’t it be nicer if you get the liberty to analyze historical profiles and purchases and predict the likelihood of a future activity at a customer level? With customer intelligence, you can easily study the past purchase behavior and ascertain the probability of a customer making or not making a certain purchase. Now, when you correctly study and deploy that knowledge, you can attract, target customers and engage them better because now you understand their interests better.
Retains your Customers for long: Customer retention, without a doubt is a critical marketing activity that speaks highly of your business. That is when deploying customer intelligence can make things work in your favor. Keeping a track of data that covers customer’s behavior, shopping patterns and purchase history can help analyze what does the customer really want from your company. And fulfilling their demands will entice them to stay retained for longer.
Helps gain Customer Insights: Typically, companies can discover a ton of structured data for their customers using analytical tools such as Google Analytics. But for the collection of unstructured data, say from social media or internal data, customer intelligence can be highly effective in gaining insights about what the customers want and how their brand resonates with their existing clients and potential prospects.
Challenges of Customer Intelligence
Low or Zero Human Intervention: Although some of the customer success companies might not take a backseat from boasting about 90% accuracy attained via intelligence software, it is a fact that humans can do better in all of these scenarios. For example, let an intelligent model predict whether the given picture is that of an ocean or lake. The human can predict the correct output nearly every time, giving away an accuracy of above 99%.
Limited Knowledge: The pivotal issue with intelligence technology is limited knowledge. Aside from technology enthusiasts, millennials, and researchers, there are only a limited number of people who are aware of the potential of AI. Many small and medium Enterprises are unaware of service providers such as Google Cloud, Amazon Web Services, and others in the tech industry. They can find many innovative ways to increase their production, sell and manage products online, learn and understand consumer behavior.
Inadequate Trust: Being transparent can go a long way towards revving up customer trust in intelligence technology. By revealing how the AI algorithms utilize customer data to secure their decisions, and how the customer helps in rendering this data, the obvious secrecy of AI software can be eliminated, thereby helping customers gain trust and confidence.
Unable to capture all Data: Since intelligence is not human-driven, it sometimes leads to some inconsistencies and that makes it cumbersome to capture all the data at all times. While difficulty in correlating data is a challenge faced by companies of all sizes in varying proportions, small and midsize businesses also find it difficult to capture all relevant data.
Manually correlating data to drive insights: Especially for the small scaled companies, it is not easy to corelate data and drive insights from the intelligence-driven software. In fact, as per the report by SmartKarrot, 70% of companies are struggling with manual processes (32%), making sense of data (22%), and capturing data (16%).
Limitations of Current Tools: When asked to the respondents of the SmartKarrot survey about the biggest challenges for gaining CI, 46% of the midsize companies said taht the limitations of current tools is one of them. It is mostly because the growing companies tend to quickly outgrow the capabilities of their older tech stacks.
Client intelligence cannot be fully utilized without highly intelligent data analytics software. You must know where to invest in your business to maximize your ROI. Few customer intelligence examples that companies use include customizing customer journeys, creating customer personas, activity-driven recommendations, and so on.
Gone are the days when you can rely solely on MS-excel or a CRM tool to gather useful information from the raw data. A highly sophisticated customer success platform can bring you the benefits of having a 360-degree view of customers. And that, if implemented correctly, can set you apart from your competitors.
Shoeb lives and breathes Customer Success and SaaS. He has a passion to research on the latest innovations happening in SaaS and Customer Success. Shoeb hails from a Software Architecture background where he worked for many years with Indian Tech Giants like Wipro and ITC building software solutions for their MNC clients in the UK and Denmark.