When delving into intelligence in the customer realm, one peculiar experience always comes to mind. In the fall of 2012, on a usual pizza night in Chicago, I decided to give the Giordano’s/Lou Malnati’s routine a break and order Domino’s. Domino’s was becoming known for its rapid delivery times and innovative use of technology (live tracking of the pizza and delivery processing, etc.) and I wanted to test the trackers out. My past experiences with them were neutral/positive but this time it was different. The delivery took unusually long (over 100 minutes) even though the tracker was showing the pizza in route for over an hour. The kid I spoke to when I called to inquire was clueless. There wasn’t even a major event happening nearby in downtown Chicago that could have caused the delay (I checked). So, in the vein of any self-respecting modern consumer (imagine my entitlement), I took to Twitter to ask Domino’s about the real point of a pizza tracker when they just couldn’t deliver on time. To my shock, Pizza Hut (their closest competitor) wrote to me before Domino’s could, suggesting I use them next time and added in a nice introductory discount code for when I decided to do so. Now, in 2019’s world of automated social tools, constant point-scoring and blazing one-liners, this less than perfect experience may not be as alarming as it was back then, but it did demonstrate a new and unflinching intent by a brand in taking an open and direct shot at capturing a rival customer.
Times have changed since. Customer is now perceived as THE competitive advantage and the level of investments and advancements in the creation and consumption of Customer Experience Management (CX), Customer Relationship Management (CRM) and AI-driven predictive tools and engines to gauge trends and behavioral shifts to target better, sell better and serve better are mind-boggling. But above all the amalgamation of customer-focused data, analysis and methods is this ‘X’ factor that really shapes it all and Customer Intelligence (CI) sits right within it. As a concept, CI is not easy to define (let alone implement). Vision Critical suggests CI’s goal to “producing insight into customers that are both smart and useful”. The closest definition I could drum up is ‘the use of tools and methods that aim to provide actionable, practical and predictive insights that evolve with a customer’s journey and forms long-term relationships and loyalty to brands’.
There are number of factors that fuel the rise of Customer Intelligence, but for the purposes of this write-up, let us explore the key ones that really drive it forward:
1) Rapid technological evolution of the 4 Industrial Revolutions, 2 have occurred over the last 25 years (World Economic Forum). Innovations like social media, subscription economies, fintech, intelligent bots, blockchain and others that are a major staple of modern life are the phenomenon of just the last 15 years. The result of this proliferation is a monumental shift in behaviors, attitudes, and expectations of modern consumers, who, equipped with advanced technological capabilities and a heightened sense of entitlement are a major reason why 52% of Fortune 500 do not exist anymore (they have merged, been acquired or folded). Such fast-changing behavioral variables are not only difficult to pin down, they make it harder to figure out the direction in which the human mind is headed and the type of innovation that should be created for their consumption.
2) Globalization and competition From Amazon (US led Retail) to Alibaba (Chinese wholesalers) to ThinkGeek (niche, enthusiast offerings), the geographical boundaries of competition have blurred and a world of goods has opened up for customers to access from any other part of the world. Even developing economies that are nearly 60% of global GDP (IMF) are experiencing brisk overhauling of retail standards because of this and the use of intelligent data is on a very serious rise to segment and target leveraging regional and cultural nuances against competition. McDonald’s added a custom-vegetarian menu in India based on user preferences it learned through machine learning and used similar data tactics back in the US to overcome a negative stigma of a campaign that allegedly promoted the Filet-O-Fish sandwich using child bereavement. This brand of personalization and intelligent segmentation is a surefire way of promoting customer loyalty and fending enhanced competition in today’s AI infused environment.
3) Crossindustry disruption Innovators from all over consider it their obligation to take stabs at incumbents from any industry of their choosing. The Financial world as an example, once the darlings of the regulators is under constant attack by Apple, Samsung and every fintech out there. Modern consumers, preferring convenience and timesaving over comfort of an immovable financial partner, have enabled these technology-led entrants to find success against traditional mainstays. According to HBR, identifying the factors which lead customers to choose these disruptive products despite long-lasting relations is key, even more so than the command over technologies involved. Incumbents need to act quickly on uncovering behavioral variables in real-time and create relevant offerings using CI. Other industries should also follow suit as none of them are safe from such savages (or at least that’s how incumbents see them).
4) Changing modern consumer demographics Every new generation brings with it its pertinent behaviors into the fray. Generation-Z, the populace born between the mid-1990s & early-2000s, is on course to become the largest spending US consumer segment by 2020 (Forbes) and is known to break all historical norms by doing things differently, be it buying, consuming, or complaining. Nearly 80% of them prefer businesses that allow personalization to their needs (Epsilon, 2017). They also pride themselves in showing a near contempt for loyalty by their tendency to switch brands after just one bad experience. I guess their 4 hours a day of regular smartphone usage and a culture of instant gratification and social entitlement makes them experts in customer loyalty. And if you think these mavericks are hard to cater to, wait till you experience Generation Alpha (2010-2025) that will be the first to be born into Artificial Intelligence. Alpha’s are growing with the machine and their entitlement of personalization is at an unimaginable level, a level that many CI solutions are probably not even equipped to cater to yet. But by in large, CI solutions are doing a decent job of tracking these shifts in preferences in real-time, plucking unforeseen trends, and predicting future actions in line with the expected service demands, preferred communications channels, and overall expectations of customer experience. Most importantly, they provide a single view of the customer throughout the organization, allowing all sales, service, and marketing efforts to be coordinated towards acquiring them, retaining them or growing them with the right levels of intelligence baked in.
5) Customer retention over customer acquisition Economic crises like the dotcom bubble and the Great Recession caused organizations to intensify and rethink cost-cutting measures, leading customer retention to become the preferred strategy over customer acquisition. Retention, which is 6 times cheaper than acquisition (HBR), has resulted in the widespread focus on loyalty programs, building long-lasting relationships and the rise in KPI’s like Customer Lifetime Value (CLV), Defection Rate (DR) and Customer Satisfaction Rate (CSR). Retention typically depends on the right attitude and the right delivery of service by the brand, a strategy that requires businesses to regularly collect feedback (data), predict business needs (CI) and act on issues even before they become issues to have a shot at up-sell and cross-sell of products and services. During my Salesforce days, the Customer Success Group religiously worshiped the Early Warning System, a carefully crafted internal CI tool that predicted churn way before time so appropriate actions could be taken by the account teams to salvage the relationship/ account in a timely manner.
6) Intelligent tools are becoming more and more intelligent The mainstreaming and constant evolution of AI has broadly enhanced the power of CI in a global AI market expected to grow from $20.67 billion in 2018 to $202.57 billion in 2026 (Forbes). Natural language processing and machine learning are expected to lead the pack which aids CI further in impacting day to day business activity from matching riders to drivers in Uber, to notifying users of larger-than-usual bills by Wells Fargo and much more. Enterprise Solution vendors also continue to pour R&D dollars into their platforms. SAP just went through a $15B overhaul with bulk of its investment spent in enhancing infrastructure, security and the customer experience toolkit. Salesforce is deepening its Einstein offering with predictive insights on all aspects of sales, service, marketing tasks. Microsoft’s Insights application adds ‘knowledge mining’ and ‘bot support’ and IBM’s Watson support agents are best in class for customer service. Many of these solutions come with the right built-in predictive functions that suggest next best offer/service based on the defined customer journeys. Such solutions can be both specific and non-specific to a platform e.g. Vonage’s Nexmo is used for generating insights and pushing marketing communication on voice and text. Voice being a growing medium and essential for evaluating and monitoring consumer behavior where the likes of Apple’s Siri and Amazon’s Alexa are mapped with Google Analytics and Facebook Insights Tool to uncover the right actionable insights on the customer.
7) Evolving voice of the customer The rise of technological and social tools is giving customers more of a say in product development than they ever had. Kickstarter alone has seen consumers pledge $4.5 billion to products they wish to buy. Dimensions of customer feedback is now increasingly vital in shaping the future of a brand, by deliberating insights from brand health, product and service performance, etc. Major marketing campaigns from the likes of Pepsi, Dove, and others have been swiftly dealt-with after drawing backlash from consumers in one market or another. CI enables organizations in providing consumers more control over their products, thus allowing brand affinity to flourish. Cases in point include Netflix and Amazon, both of which revived popular shows like ‘The Expanse’ that were previously discontinued but were still in demand as per streaming data. CI also leads targeted marketing campaigns on all channels to automatically push ads that customers will likely relate to. As a result, a baby boomer might receive a coupon in the mail while a millennial might get a QR code delivered in an app (only if Domino’s had this in 2012).
In the end, what is needed to be realized is that modern consumers, with their ever-changing behaviors and demands, are the most-important stakeholders businesses have today. Their needs are constantly evolving and customer-focused intelligence tools (that can also continue to evolve) are the ones that are needed. Pizza Hut won that night in Chicago but Dominos could have easily done the same if it had the right customer game back then. I bet they both now employ the best in class CI tools and strategies to win as, without them, the only path ahead is of irrelevancy, and demise. Welcome to the intense Age of Customer Intelligence!!!