Building Customer Insight

IT’S A SIMPLE FACT: Great direct marketing and CRM programs don’t happen by accident. They’re the products of insights that target relevant messages to the most receptive customers or prospects.

Unfortunately, while firms spend countless hours creating and executing complicated marketing plans, very few devote the same amount of time and energy to understanding their customers. A company can do this by taking an inventory of its customers, profiling them, building tactical tools and looking at their lifetime value.

The first step in building customer insight is to take a comprehensive inventory of customer data. Before beginning any customer analysis all customer data must be identified and documented. This process will typically start in the information technology department if a company has a customer data warehouse or a marketing database. However, the accounting or finance departments may hold any billing or transactional data not housed in the larger systems. In addition, the sales department may have its own contact or prospect database. This is especially true in business-to-business companies, since they are most likely to store transactional billing and fulfillment data in one system and marketing or contact information in another. Finally, internal or external research groups are likely to have databases that contain analytical data, such as customer demographics or survey information.

After these data sources are identified, take a hard look at the quality and quantity of each. Audit the data for accuracy, examine its timeliness and determine what holes or problems may exist. The data may be too complicated, inaccurate or out of date to provide any real customer insight. On the other hand, there might be a wealth of transactional sales and billing information but little or no descriptive data, such as consumer demographics or business