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Business Intelligence: A Customer Analysis Solution Selection Guide

Marketers are faced with multiple pressures. These pressures include the need to contribute to top-line growth and to increase share of customer as well as market share. Moreover, marketers also seek to do more with less: they are pressured to identify and invest in their most valuable or profitable customers while optimizing both budgets and resources applied (see Figure 1). In order to address these pressures, marketers seek strategies and solutions that will provide the required level of decision-support. Enterprises participating in three recent AberdeenGroup benchmark studies cited business intelligence/analytics applications and tools among the top prioritized investments for the next 12-24 months. 1

In short, marketers must find ways to proactively interact and provide service to customers based on customer value metrics. Ideally, highly profitable customers would receive more attention, service and resources than less profitable ones. Companies plan to invest in customer analytics to improve customer retention and acquisition rates among preferred segments or profiles as well as to increase share of their most valuable customers. Moreover, within highly commoditized industries, marketers plan to proactively addressing a customer's propensity to migrate based on analytical models in order to reduce customer churn rates.

Key Business Value Findings

AberdeenGroup surveyed and interviewed more than 400 companies to gain an understanding of the selection criteria and approaches used by top performing organizations in deployment of customer analytics strategies and solutions. Our research demonstrates that effective use of customer analytics leads to improved customer retention rates, higher revenues from up-sell/cross-sell campaigns and enhanced levels of customer satisfaction.

Leveraging customer analytics in support of profitable growth has been shown to deliver triple value for organizations. Aberdeen research confirms selective investment in high value customers empowers companies to boost revenues, reduce operational costs, and increase customer retention rates.2

All respondents confirmed they are addressing challenges from a technology, process, performance and organizational perspective.

Figure 1: Customer Analytics - An Assessment Approach

Selection Criteria

Vendors and service providers who are able offer solutions that are financially attractive as well as easy to use for line-of-business (LOB) employees in marketing, sales/business development or call center will be in high demand. Overwhelmingly, survey respondents cited cost and ease of use as top priority criteria for selection of customer analytics tools and services.

Numerous tools, applications, solutions, systems and/or third-party services may be engaged in support of customer analytic strategies, processes, services and solutions. Aberdeen recommends that enterprises assess customer analytics capabilities in these primary areas:

1. Ease of Use - ability for LOB users, analysts and/or statisticians to create reports, rules-based workflows, optimized offers, profitability models and/or scores. This includes the ability to create, embed, execute, report and refine marketing campaigns.

2. Analytics and reporting - ability to aggregate and report on one or more customer segments, products, channels, campaigns, and to perform customer value modeling based on both transactional and interactional data.

3. Integration and services - ability to integrate and interoperate with enterprise applications such as: ERP, CRM, marketing automation, data warehouse and financial management/accounting and to provide training and/or professional services.

4. Deployment timeframe and ROI - average timeframe necessary for full deployment with correlation between deployment timeframe, cost and return on investment.

To download the complimentary study, click here. http://www.aberdeen.com/includes/asp/sponsored_registration.asp?ci=/launch/report/benchmark/RA_CustAnalyticsSSG_GB_JL_3709.asp.

Reference:

1. "Customer Intelligence: Converting Data to Profits." AberdeenGroup. December 2005.
"Success Strategies in Leveraging Customer Intelligence." Aberdeen Group. March 2006.
"Precision Marketing." AberdeenGroup. September 2006.


2. "Success Strategies in Leveraging Customer Intelligence." AberdeenGroup. March 2006.


Leslie Ament is an experienced consultant, researcher and presenter. She advises clients on business issues relating to precision marketing, customer data management and customer relationship management strategies. She may be reached at lament-ruder@att.net.

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