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.

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 January 1^st 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!

Cheers,

Dave

Since Forrester last published a Wave of Database Marketing Service Providers (MSPs), the landscape and the market have changed significantly. How?

• Consolidation of major players. For example 2 of the 12 vendors in our 2007 Wave were acquired by other Wave vendors (Acxiom acquired ChoicePoint's database business and more recently Epsilon picked up Equifax's direct marketing division which included it's data and database offerings).
• Market entry from non-traditional MSPs. We have seen further consolidation from outside the traditional database players. e-Dialog, an email service provider recently acquired MBS Insight, and in the UK, TV service provider Sky absorbed Experian's UK database business.
• Changes in  how marketers communicate with consumers. Perhaps the biggest change is how database marketing service providers have evolved beyond managing repositories for direct mail to performing as customer intelligence hubs - becoming a strategic asset as a single source of customer knowledge. These customer intelligence hubs, enable marketers to communicate with their customers and prospects not only in traditional direct channels, but across media including digital, mobile, social, and, on the horizon, addressable TV. And, as consumers increasingly control how and when companies communicate with them, marketers must leverage their customer intelligence across inbound, and not just outbound channels.

Lance Armstrong is one of the most recognized athletes on the planet. He’s a cancer survivor and the only person to have ever won 7 Tours de France. But, have you ever heard of Chechu Rubiera? He’s a pretty accomplished professional bike rider too. He has won stages of the Giro d’Italia and team stages in the Tour de France. He has finished in the top 10 in both the Giro and the Vuelta a Espana.

But something else you may not know about Rubiera is that he was on Lance Armstrong’s team when Armstrong won 5 of his 7 Tours. Cycling is an odd sport. I’m an addict. I can watch several hours of guys on bikes riding up and down mountains. Maybe cycling fans are odd too… But what’s amazing and I think unique about cycling is that although one guy gets a victory – wins a stage or a grueling three week race - they can’t do it on their own. Their team is crucial to their victory. The team shields them from the wind, paces them up the hills, protects them from the hustle and bustle within the peloton, fetches food and water, and generally buries themselves in the hope that the team leader can get the win.

What does this have to do with Customer Intelligence? Not much, actually. This post is personal.

Yesterday, I completed my first Forrester Forum Keynote at our Marketing Forum in Los Angeles. That was about Customer Intelligence. The feedback has been amazing – and extremely humbling. I’ve been overwhelmed by the emails, text messages, and tweets complimenting the speech. To all of you that commented, Thank You! I’m delighted to have been able to spend time educating so many people about the role of Customer Intelligence, and how it can make marketing and businesses more successful.