Understanding and predicting customer behavior is crucial for organizations that want to thrive in today’s hyper-competitive marketplace.
Why every business can benefit from an advanced customer intelligence platform
Understanding who your customers are and what they need is critical for every business. It’s essential for marketing, product development, customer experience (CX) and support, to name just a few teams. But many businesses still only have a basic understanding of their existing and potential customers. This is because their efforts are often based on little more than CRM-level demographic data and high-level customer segmentation that fails to drill down into people’s unique, individual-level drivers and interests.
To improve performance, you need genuine customer intelligence that goes beyond this broad strokes approach and delivers insights into customer intent. In order to implement this effectively, a specialized data analytics platform is a must-have.
Why customer intelligence is so important
Without effective business intelligence about your customers, you’re operating blind. If your brand is still using data limited to your CRM system content or relying on your own hunches, you’ll never have a complete picture. This means it will be harder to make connections between consumers, identify new opportunities or better understand why a campaign did or didn’t work.
There are several reasons why this matters. For starters, effective intelligence allows you to create personalized customer experiences based on their unique preferences, behaviors and needs. At the same time, this can identify pain points and issues that can be addressed. In turn, this leads to higher levels of satisfaction, improved customer retention and an increased chance of successful marketing and upsell campaigns.
Other benefits of developing a deeper understanding of customers through intelligence include the ability to allocate resources more effectively and optimize future product development based on a real-world understanding of customer needs.
The meaning of customer intelligence
Customer intelligence starts with data – but it goes far beyond this. It’s about ensuring information is stored, categorized and processed effectively and is available on-demand whenever users need it, whether it is dealing with an individual customer service query or planning a campaign to target millions of people.
The data itself can be sourced either internally or externally – but it’s imperative to start using resources you possess yourself, gathered on your own customers. This is the key to developing a personalized customer experience, as it offers a clear, unique insight into your own user base. However, other sources of data shouldn’t be overlooked. With the right customer intelligence platform, this can be used to enrich your own data and provide more context for your decision-making.
Put broadly, customer intelligence combines the data businesses have in their customer relationship management (CRM) software with other sources such as activity records to build a much more detailed picture of individual customers and their intent, which in turn can be used to guide future strategy.
What are the challenges of customer intelligence?
A big challenge for many brands is the sheer scale of the customer data they have available to them. Some firms may not even realize just how valuable the information they hold in their data warehouses is. Demographic data, purchase histories, session and user journey records, and weblogs all offer the potential for powerful, actionable insight. However, it is often a major task in itself just to get this under control.
Even when firms have access to the right data in the correct format, the actual process of data analytics is still hard to run at the scale needed to drive accuracy in customer intelligence. This means firms can miss out or be misled by insights, either because their data is restrictive or their processes are unable to be scaled up to incorporate the volume of data required.
Another major issue that every brand must consider when building a customer analytics solution is privacy. There are very tough regulations on what a business may do with the information it collects – and beyond their legal requirements, individuals also have very high expectations of brands.
Customers will quickly stop doing business with a company they believe is not being careful with sensitive consumer data or is not delivering true value in exchange for use of their data. Therefore, having robust protocols in place for access controls, encryption and anonymization are essential.
What is a customer intelligence platform?
In today’s data-driven world, it is nearly impossible to create value from customer intelligence without the right tools, and this is where solutions such as a customer intelligence platform, or CIP, come in. These act as a hub for all your analytics activities, providing a single source of truth about who your customers really are, what they want and when they want it – all in a package that’s accessible and easily navigable by anyone within the business who needs customer insight.
This should not be confused with a customer data platform (CDP). Although both are ways of dealing with customer data, a CDP is essentially an aggregator, collecting insight from various sources in order to create a complete picture of the customer. A CIP, on the other hand, goes beyond this to provide actionable insight and intelligence.
By including elements such as machine learning and predictive modeling, a CIP seeks to empower businesses to fully understand customer behavior patterns and make informed decisions based on what they are most likely to do in the future, setting it apart from other technologies such as CDPs.
What types of insights can a CIP deliver?
Just as Google Analytics can tell you about the performance of your website, customer intelligence platforms, with the right data, offer insight into every customer interaction, whether it’s a customer service touchpoint, engagement with marketing campaigns or how they interact at different stages of the sales funnel. It enables you to gain insight into all aspects of customer behavior – not only what they do, but how and why they do it. In turn, this gives you a much stronger idea of what they are likely to do next, allowing you to tailor your future activities accordingly.
The right tools help you understand your audience’s pain points and where any barriers might be that prevent a prospect from converting. They also assist with customer retention by identifying customers who are most likely to churn, allowing employees to focus their attention where it’s needed the most.
A good CIP should provide insights into a range of areas, including segment analysis, trend identification, customer journey mapping and much more, allowing for the forecasting of purchase trends, churn likelihood and potential customer needs.
On top of building your understanding of each customer as an individual, insights can show the overall effectiveness of marketing campaigns, the performance of specific products or services, and wider market trends and insights to provide a competitive advantage.
What are the benefits of a customer intelligence platform?
Use of this technology offers a much clearer understanding of your customers’ interests, desires and drivers. This helps ensure that every interaction you have and every offer you present is relevant, interesting and timely. It achieves this by giving you much stronger insights into user intent – not only answering the question of what users are likely to do in the future, but when they will do it. Having this information is vital when it comes to crafting future customer communication campaigns as it ensures you’re only targeting the right people with offerings that are specific to their interests and needs. This means happier customers who feel a better connection with the brand.
However, better customer satisfaction is not the only benefit. When it comes to activities such as running a marketing strategy, a good CIP can greatly improve your bottom line. For instance, it can increase the ROI of marketing campaigns, as they can be much more closely targeted. It can also boost conversion rates by ensuring offers are genuinely aligned with an individual’s interests.
What key features are essential when evaluating a customer intelligence platform?
There are a range of offerings available that promise to give brands deeper customer insights but to function as true customer intelligence software, they should offer all of the below features in order to provide an effective tool for an entire enterprise.
- Data integration – CIPs should be able to integrate directly with a wide variety of sources – including structured sources such as CRM and marketing tools and unstructured sources like social media – to collate data and transform it into a single, comprehensive view of the customer. How a CIP achieves this must comply with both privacy legislation and avoid the use of third-party cookies, which combined is a huge challenge for brands to overcome.
- Scalability – The amount of data available to businesses is huge and growing all the time, so a CIP platform must be able to effectively scale up as companies grow. As well as handling larger volumes, this must include the ability to separate the most useful signals from the surrounding noise.
- Segmentation and targeting – The ability to segment audiences based on a wide variety of factors, from demographics and behavior to brand affinities and interests, is critical in building targeted marketing campaigns, improving customer experience, and making data-driven decisions based on the predicted future needs of the various segments.
- Advanced analytics – This encompasses tools like machine learning and AI to identify hidden patterns and trends within data that provide insights into customer behavior and preferences that might not be apparent through traditional analysis methods.
- Real-time capabilities – Real-time analysis allows businesses to react quickly to changing customer behaviors and market trends in order to deliver timely, relevant experiences and offers.
- Privacy – A good CIP must factor in privacy right from the start to ensure that no individual customer can be identified from their data and that only those with the correct authorization can access the data. Tools to effectively anonymize personal information will be the key to this.
The importance of continuous customer intelligence
Ultimately, having an advanced customer data platform is only of use if brands are able to effectively act on the information it provides. Turning this insight into action is what separates the top performing businesses from the rest. This starts with ensuring you have a full idea of how a customer intelligence platform fits into your wider operations, including what use cases it is especially suited to.
Building customer understanding isn’t a one-off activity – people’s needs, priorities and situations change over time, and this is reflected in their buying behavior. Therefore, a good customer intelligence data solution needs to be ahead of the curve with strong predictive insight capability.
Doing this ensures you can build the best customer lifetime value by understanding your users at every stage of their journey, from before they even make their first contact, through to a long-lasting, profitable relationship. Do it right and you can maximize your customer lifetime value as you adapt your offer positioning to their needs.
Increasing the effectiveness of marketing campaigns
Intelligence-driven marketing campaigns offer a wide range of benefits. They can be better tailored to specific customer segments, be used to determine what type of offers customers would be most likely to respond to, and help fine-tune the messaging or delivery itself. This may include pinpointing the best language to use, the most appropriate channel to reach the intended customer or even the right time of day to engage with customers.
Brands that use customer intelligence effectively can see significant improvement in their return on investment by connecting with consumers on a more individual level, while those that don’t leverage the resources they have will find it much harder to engage with their audiences. Indeed, more than nine out of ten consumers expect a personalized experience from marketers and are often prepared to permit the use of their data to achieve this.
The future of customer intelligence
The advent of key trends such as AI and advanced analytics, as well as the challenges of replacing third-party cookies and conforming to privacy expectations, means that customer intelligence is set for a major overhaul in the coming years, and firms that are able to respond best to this by implementing the right technologies will be well-placed to address future challenges too.
For instance, CIPs will be critical in leveraging AI and machine learning to provide much deeper, more accurate predictive capabilities. This will enable businesses to understand customer behavior patterns, forecast trends, and create more accurate strategies due to AI’s ability to work with huge amounts of data and deliver real-time customer insights.
This means firms can embrace strategies such as ‘hyper-personalization’ and avoid mass marketing, doing away with traditional customer segmentation strategies to develop specialized categories that can be adjusted on demand based on the needs of an individual campaign.
However, all this must be done against a backdrop of tougher data governance requirements. Evolving customer expectations for how personal data is handled and regulations like GDPR and CCPA both demand companies make privacy a top priority. Protecting user data while still using it for valuable insights is a tricky challenge that can only be solved with the right, privacy-focused technology.
Legacy tools are unlikely to be able to keep up with these trends or deliver the results businesses expect in today’s data-driven environment. Therefore, comprehensive CIP technology will be essential if brands across all sectors are able to fully make the most of their customer data and turn this into the insight they need to deliver better performance for years to come.