Perspectives & Strategy

For many years it has been an important corporate goal to build insights into the habits and thinking of the customer. This requires the business to focus their marketing efforts through a customer intelligence solution.

Normally this is achieved by combining  the use of advanced analytics with analytical CRM components. This is one form of closed-loop Business Intelligence, the principle of which is to predict behaviour based on classes of customer. Of course a class can be encompass a group of one person, but is normally much larger. The concept is that each customer would fall into certain demographic groups. There are certain behaviour patterns that could be drawn from the generalised behaviour of specific groups of people. We are now living in different times and whilst group behaviour can still assist in determining the general needs of a group it does not assist in knowing why individual customers make specific choices.

Take Joe, he is 52 years old, middle class, owns a Mercedes on many things he is typical for his age group, a true red-blooded American, supports his college football team. On the management team where he works. He is involved with many local causes. A family man with three kids, staunchly conservative on most issues, yet a vegetarian since his youth. His whole family have followed him in this regard with each making a conscious choice.

When the local supermarket sends them special offers it is always for meat products that nobody in the family eats. This is a case of the store fitting him and his family into specific demographic groups and having little tolerance for individual preference within their data structures. For most things Joe and his family follow the norms associated with their demographics. Through traditional Business Intelligence it is possible to identify specific anomalies to demographic norms, yet there is a tendency to believe that Joe’s family purchase their meat from another store; hence the offers that are sent.

UK supermarket chain Tesco has performed much research in making special offers relevant to their customers, yet it is all too easy to make assumptions. Thus it is all too easy to misunderstand why people do the things they do. We may never truly understand why people do all they do, even with a psychologist on the business team.

What social media adds to the picture can be the views and attitudes of the customer. However to add value these must drive additional insight over and above the demographic norms. For small businesses there is often more value driven by listening to customers than can be gleamed from analytics. Of course small businesses have to think twice before adding expensive systems.