Engaging Customers as Individuals

In addition to an intense focus on risk, our analysis revealed Transformed organizations pay more attention to understanding and engaging with their customers in new ways (see Figure 8). They appear to be responding more pervasively to a profound market shift, namely the explosion of new customer expectations generated in part by our digital, social and mobile marketplace. Likewise, Transformed organizations are also seizing the competitive advantage created when they understand their customers as individuals and engage them in more “authentic” or personalized ways.

FIGURE 8: Focused on Customers


View Exhibit

Transformed organizations are learning to use customer analytics that yield something better than broad statistical averages. Instead of segmenting customers along two or three dimensions — sales and interactions, for example, or income, age and geography — they are analyzing a broader set of customer dimensions. These dimensions can include everything from transactional patterns to psychographic profiles of how customers prefer to shop, their likelihood of product purchases and their cumulative value to the company. The result is a highly individualized understanding, otherwise known as a “market of one,” making authentic customer engagement possible.9 As one Australian respondent in the financial services industry noted, “As interactions become more electronic and distant from staff interactions, insight to customer behavior and needs is increasingly essential.” Analytical insights and actions help restore the sense of a personal relationship that human tellers once provided, he said. Transformed organizations are putting analytical insights like these into the hands of customer-facing employees. Two-thirds of them support these employees with insights to drive sales and productivity compared to one-fourth of Aspirational organizations. Many organizations, for example, are learning to anticipate customer needs by understanding what customers actually do when they go online. Pfizer Inc., a global biopharmaceutical company, has taken this approach. “What’s really changed this past year or so, as we continued to evolve to a digital interaction and multi-channel model, is the sheer magnitude of data we collect directly about our customers.

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References

1. Organizational performance is a self-assessed measure that delves into the organization’s competitive position relative to its industry peers. Respondents are asked to select one option from five choices: substantially outperforming competitive peers, significantly outperforming competitive peers, on par with competitive peers, slightly underperforming competitive peers, or significantly underperforming competitive peers.

2. LaValle, Steve, et al. “Analytics: The New Path to Value.” MIT Sloan Management Review and IBM Institute for Business Value knowledge partnership. October 2010.

3. ibid.

4. IBM Institute for Business Value. “Capitalizing on complexity: Insights from the 2010 IBM Global CEO Study.” May 2010.

5. Corporate Executive Board, “Internal Audit’s Role in ERM,” referenced 21 October 2011.

6. Torok, Robert. “Improving enterprise risk management outcomes.” APQC. 2011.

7. Clanton, Brett. “Chevron stayed busy while idling in deep water: Staying busy while idle – Confronting a deep-water slowdown in the Gulf, Chevron worked to get more from its data.” Houston Chronicle. July 11, 2011.

8. ibid.

9. Teerlink, Dr. Marc and Dr. Michael Haydock. “Customer analytics pay off: Driving top-line growth by bringing science to the art of marketing.” IBM Institute for Business Value. September 2011.

10. Our findings on the two paths are based on response patterns from a representative sample of Experienced organizations using a subset of key questions from our survey.

i.Looking at Robert Bruce’s Two Huge Healthcare Bets,” Guru.com. September 6, 2011. Accessed on October 17, 2011.