Information as a Competitive Advantage - Part 2: Creation of Customer Value

Information as a Competitive Advantage - Part 2: Creation of Customer Value

Customer information categories

The following information categories form a frame of good understanding of the Customer.

Customer behavior:

o Products and services that are purchased

o Product portfolio, product versions, supplementary services, product features

o Recency and frequency of purchases, monetary value of transactions

o usage characteristics of a continuity service (e.g. a credit card or a telephone subscription)

o Share of wallet spend with the business and with competition

Customer interaction history:

Service calls, complaints, campaign offer contacts and customer reactions

Customer value estimations:

o Customer total and per product revenue value

o Customer lifetime value or equivalent metrics

Purchase-decision making process by the Customer:

o Factors which influence choices (e.g. cost, product manufacturing quality, product design, product packaging, product/business reputation)

o product information which is essential to support the decision (e.g. cost, product features)

How does the Customer purchase:

o purchasing channel preferences

o interactions required in order to carry out a purchase

Customer service after the purchase:

o support type and frequency, the Customer requires during products or services usage

o preferred customer service channels (e.g. web channel or call center)

Personal sociographic profile of the Customer:

o Marital status and household characteristics

o Financial condition (income and disposable income)

o Education level

o Lifestyle / Preferences

o how does the Customer relate to predefined customer segments or profiles (e.g. Prizm clusters in the US or Meta-Milieus profiles in Europe)

o demographics of the neighbourhoods in which the Customer base lives (geodemographics)

o Other factors affecting purchasing behavior

External factors affecting Business Customer behavior:

o Competitive environment and market trends

o macroeconomic factors which influence the market

o Regulatory environment in the market

In certain cases, the data gathered can be overwhelming. For example the phone calls made by a long list of Customers, are generating an enormous volume of call detail records. The telecom company should design a realistic approach to handle this valuable information effectively.

Customer holistic view

Many Businesses operate legacy systems serving exclusively a specific business process or a specific organizational unit. These legacy systems capture customer information and they are hardly accessible by other organizational units. Therefore, information on customer interactions with the Business, is dispersed in uncoupled systems which form 'information silos'. This Business cannot develop a 'complete view of the Customer' and offer it to all relevant channels.

As Businesses recognize the competitive value of the enhanced knowledge of the Customer, an international trend to better exploit Customer information on all customer lifecycle stages, is witnessed.

Information for new Customer acquisition

Information captured, is used to segment the market into groups and shape products based on the needs of these groups. As the degree of market segmentation increases (segmentation into smaller more focused groups - microsegmentation), the required information for each Customer must be enriched (e.g. richer demographics, analysis of behavior, customer value analysis).

Information for Customer retention

Customer retention & loyalty is a difficult task, in the modern competitive environment. Customer & market information should be fully exploited in order to strengthen the relationship with the Customer.

Information which:

o contributes to the understanding of the customer profile, the market segmentation and the focused provisioning of products and services on selected Customer groups

o allows the development and use of Customer value models

o allows value-based servicing of the Customer

o allows the adoption of Customer service to specific customer requests or preferences

o allows the guidance of certain Customer profiles to advanced products which are of strategic importance to the Business development or better serve Customer needs (e.g. identify Customer groups of a specific profile for upselling)

o relates to areas of Customer dissatisfaction, in which improvement is needed

o supports the internal assessment on the customer service quality level

o contributes to the identification of differentiation and value creation opportunities,

should be systematically captured and used efficiently.

Copyright 2006 - Kostis Panayotakis

Kostis Panayotakis - [http://www.pleroforea.com]

Material relevant to information management, can be found at [http://www.pleroforea.com]

Article Source: http://EzineArticles.com/expert/Kostis_Panayotakis/39774

Article Source: http://EzineArticles.com/323569

_(By Kostis Panayotakis).