Recent shakeups on Forrester’s Customer Intelligence team provided an opportunity to take a good look at our listening platform and social intelligence coverage. Long tagged as the responsibility of the social media team, we believe that “customer listening” should encompass numerous sources of feedback – from the call center, to voice of customer programs, to enterprise feedback management, to ethnographic and traditional market research – to really listen to the customer. CI researcher Allison Smith and I are working on a new series of reports around this concept – for now we're calling it Enterprise Customer Listening.
What is Enterprise Customer Listening, and why do we need it?
The Age Of The Customer makes it more important than ever to keep close tabs on what your customers and prospects are saying about your brand. As companies progress toward social intelligence maturity – full integration of social data into existing business strategies and technologies – many are checking the "listening" box, but we think that they aren't thinking broadly enough. The opportunity to listen to customers isn't limited to a single channel, and the unsolicited, unstructured feedback in each channel becomes more valuable when coupled with insights from others. Capturing, managing, and understanding the breadth of what customer's say can ignite the customer’s influence across the enterprise – giving you competitive advantage.
After we packed up the kids and drove three hours to Disney World in Orlando, I sat up until almost 2 o'clock this morning reading the media coverage about Disney's soon-to-be-launched Next Generation Experience. While the blogosphere has been muttering about this reported billion-dollar initiative for a few years, the story took off early this year when the NY Times announced its impending launch. Unfortunately, most of the media coverage centered on the proverbial elephant in the room -- privacy. Congressman Ed Markey exemplified the kneejerk reaction, demanding Disney CEO Bob Iger answer questions that were already addressed in the company's FAQs. If we were in Ireland or England, I'd say that Congressman Markey was taking the mickey!
As we kick off 2013 in earnest, I wanted to take the opportunity to update you on several changes to the CI team at Forrester. As many of you know, we’ve seen tremendous growth over the past few years since we introduced the role. However, we’re experiencing some change, and it felt like an appropriate time of year to provide a broader update.
First of all, I’m sad to announce a couple of departures. Suresh Vittal and Zach Hofer-Shall left Forrester on Monday, December 31st. Suresh was both a fantastic analyst and most recently a fantastic practice leader. Unfortunately, his expertise was noticed by the entire industry, and he got scooped away by an incredible opportunity. Zach has built our coverage of what was originally listening platforms and later social intelligence since his tenure as a researcher. In a similar vein, his expertise was noticed, and he’ll be applying his knowledge to great effect in his new role.
Carl Doty, formerly the practice leader of our consumer product strategy role, has switched roles effective January 1, 2013, to take over the CI practice. As some of you will recall, this is a homecoming for Carl — he was our research director who led the creation of the CI practice, leaving behind our old direct marketing focus and moniker. Carl is based out of the Cambridge office.
We’ve had a few other additions to the team lately and have shifted some coverage areas to compensate for Zach’s departure, so to help you keep track, here’s an update on the current CI team:
Allison Smith: Cambridge-based researcher focused on social intelligence under Joe Stanhope’s tutelage.
I caught up today with Julie Bernard in advance of her presentation at tomorrow's Marketing Leadership and Customer Intelligence Forums. Julie's keynote focuses on "Putting The Customer At The Center Of The Business." I had the opportunity to ask her what that means for Macy's. Here's what Julie had to say:
Q: What does it mean for Macy’s when you talk about “putting the customer at the center of the business”?
A: At Macy’s, this means that the customer has a seat at the table. As all of us in retail know, the customer is queen/king and as such, focusing on delivering against her needs and wants is of paramount importance. When we start a meeting, we ask ourselves “What decision do we have to make today and how will this decision positively impact the customer in terms of relevant product offerings, great value, and fulfilling shopping experiences wherever she chooses to shop with us?” Then, at the close of the meeting, before we all leave that table, we revisit our decisions and action plans to ensure that we have taken the customer’s perspective into account. When we make customer oriented decisions and take action against customer needs, those actions deliver against sales and profit goals.
Q: What do you see as the greatest opportunity for retailers as it relates to customer centricity?
Forrester believes that we have entered the age of the customer — an age in which customer obsession matters more than any other strategic imperative, requiring firms to focus their strategy, energy, and budget on processes that enhance knowledge of, and engagement with, customers.
It sounds straightforward, right? Which of us doesn’t wish to become more customer-centric? Yet we see few executive teams that treat customer understanding and intelligence as a strategic imperative. Don’t believe me? Look at the agenda or the minutes from your last several executive team meetings or board meetings. How much time was devoted to understanding customers better or to leveraging that customer knowledge in new ways to drive business success?
Our research shows that fewer than fifteen percent of firms operate at a strategic level of Customer Intelligence. These are the firms that have turned customer knowledge into a corporate asset. The vast majority of them drive improvements in customer acquisition, retention, satisfaction, revenue, profitability, and customer value. And they apply CI broadly within the business. Ninety-five percent of strategic intelligence firms use CI to drive corporate strategy, versus 30% of those we categorize as functionally intelligent. And 87% of strategic intelligence firms use CI to drive business operations, versus 19% of those at the functional intelligence level.
But before you switch off and tell me this is someone else’s job, be aware of the role of executive management. Strategically intelligent firms are far more likely to have a senior-level sponsor or champion: 46% of them strongly agree that their company has a C-level evangelist or champion for Customer Intelligence, versus 20% of marketing intelligence firms and 7% of functional intelligence firms.
An article in yesterday’s Ad Age led with a fascinating premise — that investments in technology and innovation may provide future breakthrough for Wal-Mart. That’s Wal-Mart. Not Apple, or Google, or Samsung, but Wal-Mart — the world’s biggest retailer.
Forrester has been writing for some time about how technology management must change to deliver business results, a phenomenon we call business technology (BT). The implications for Customer Intelligence professionals are immense. CI teams are often among the more technically oriented of their marketing brethren, and they are steeped in data and analytics, but the best CI pros also act as customer strategists — helping the company to better understand the customer and to put the customer squarely at the core of the business.
To do so requires a lot of BT involvement. For too long, we’ve heard that IT is from Mars, and marketing is from Venus, but to harness the full power of Customer Intelligence, BT and CI must form a deep bond and learn to collaborate. To help CI professionals on this journey, Rob Brosnan will soon publish a report introducing the idea of a Marketing Technology Office.
And to help CI pros, CMOs, and CIOs figure out how to emulsify marketing and technology, Forrester will be hosting its first CIO-CMO Forum next week on 9/22 in Boston. I’ll be co-moderating a session with my colleague Gene Leganza — we hope to see many of you there!
I've had two reports go live in the past week or so which, although we worked on them separately, are in some ways related. First, we argue that Customer Intelligence needs to get out of the weeds to demonstrate value. CI professionals seek to fill a strategic function at their organizations, but many are stuck grappling with the basics -- integrating data, struggling to evolve beyond direct marketing channels, and neglecting inbound marketing.
Today, Tamara Barber and I launched two reports on which we collaborated to understand the intersection and interplay between market insights and CI. We found that, for Customer Intelligence professionals, collaborating with market insights will help to elevate the CI role and that, collectively, they can bring the organization closer to becoming an intelligent enterprise.
This isn't something for every company, and it is something that will require work, but we show that firms can create competitive advantage if they invest the time and resources to build a shared CI and MI culture, align processes, integrate the relevant data, rationalize technology decisions, liaise collectively and directly with business functions, and adopt shared metrics.
On April 1, 2011, Epsilon announced that it had detected an unauthorized entry into its email system, and that, as a result, a subset of its email clients’ customer data was exposed to an external party. The company indicates that the information was limited to email addresses and/or customer names only. The company is also limited in the information that it can share due to an ongoing investigation.
Epsilon plays in the “permission email” game — it is a legitimate player and certainly not a spammer. It has big and significant email customers — this weekend, I received emails from Disney, Best Buy, and Brookstone, and I’ve read about other notifications from Chase, Citigroup, Barclays, and Kroger. On the one hand, some of the press headlines would lead to a big shoulder shrug — the fact that a spammer might now have my name as well as my email address really doesn’t raise that much concern for me.
But I like to think I’m relatively tech savvy. What about others that might receive an email — addressed correctly apparently from a marketer that they trust that asks for more information or asks for them to take specific action? The emails that I’ve seen from the companies above have been well written and designed to offset some of that concern.
My bigger question is the long-term impact for marketers and service providers. Specifically:
On January 1st I became a resident of Florida -- my wife and I joke that after the collective 63 years that she, our two kids, and I have spent in New York, that we’re just doing what so many other 63-year-old New Yorkers do -- and headed to the Florida sun. As a migrant, I’ve been closely monitoring the communication that I receive from companies.
So many data and database vendors promote their “new mover” and “pre-mover” offerings that help identify when someone has recently moved house or is about to do so. And although this wasn’t a formal experiment -- and I recognize that I’m a case study of one (or four if you count the family) -- I wanted to observe how companies adjusted their communication once we moved. I should point out that I deliberately didn’t register a change of address with the US Postal Service.
And so far? Zilch. We’ve cancelled and connected cable; switched our address with our credit card issuers, banks, and cell phone companies; registered for new schools; and the only unusual action of late was when American Express denied a charge on my credit card as part of its fraud protection program. Meanwhile, we’ve opened new bank accounts and purchased new appliances, electronics, furniture, and a host of other “new mover” items -- purchase decisions that many marketers would love to have had the opportunity to influence. Again, we may be an isolated case, but if your vendor is selling you “new mover” and “pre-mover” data, have you assessed the quality, timeliness, and accuracy lately?
Meanwhile, if you’re in South Florida, don’t hesitate to look me up!
In recent inquiries and in one-on-one meetings at our Consumer Forum last week, I’ve had several discussions about the preference management landscape. We’ve written about the trend, but many of the questions relate to the players in the market. Given that I am unlikely to have time to write a landscape report in a reasonable timeframe, I figured I’d outline how we view the market and highlight some of the players.
Conceptually, I divide preference management into managing compliance versus managing preference. I don’t have a problem with compliance management — I would strongly urge companies to focus on it. But I don’t think of it as true preference management.
Compliance management can be further divided into a) complying with legal requirements, and b) complying with consumer requests relating to how you communicate with them. Legal requirements are pretty straightforward and in many cases channel specific — CAN SPAM for email communications, The National Do Not Call Registry for telemarketing, The Telemarketing Sales Rule for telesales, etc. Not complying with these laws has legal ramifications, and we usually find legal departments playing some sort of role in governance and compliance.
Consumer compliance usually relates to opting in or out of communication. That “opt” is sometimes done with the company directly — think “unsubscribe” or opt-in pages for email communication — and sometimes through third parties such as the DMA and many of the catalog opt compilers like PrivacyCouncil.org, Catalog Choice, and the DMA’s DMAChoice.