How analytical competitors are stealing customers away

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By: Wise Marketer Staff |

Posted on July 17, 2007

How analytical competitors are stealing customers away

The driving forces behind many companies' operational improvement priorities do not include customer intelligence, according to customer loyalty author and consultant Jill Griffin of the Griffin Group, whose research with CustomerSat provides insight into why so many customer experiences today are disappointing.

When making operational improvement decisions, over half (57%) of marketing executives and 50% of sales executives surveyed reported using internal factors or no formal process at all to identify problem areas and prioritise improvement efforts.

Lack of customer focus According to Griffin, "For many companies, what's right for the customer takes a back seat to other decision making priorities. Instead, departmental lobbying, squeaky-wheel dynamics, and management 'gut feeling' drive the firm's operational improvement decisions, but that usually spells trouble."

According to Monica David, chief customer officer for CustomerSat, "We got the perspectives of both the seller and the purchaser in terms of actions taken in response to negative customer feedback. What's clear is that warning signals from customers are often ignored or dealt with in a non-customer centric way."

Risks and rewards Such a lack of customer-driven decision making comes with heavy penalties, Griffin warned. In almost every industry, a new breed of competitor is increasingly emerging: One that applies customer analytics, and data and fact-based decision making. These are companies that make customer-centric decisions based on data rather than intuition.

According to David, "Tactical actions address unhappy customers' immediate issues and concerns, and typically include personalised follow-up calls by executives or account managers to address their problems. Broader, longer-term strategic actions can include process improvements, systems upgrades, and product enhancements. These kinds of actions based on analytics are more likely to build true customer loyalty, recover at-risk customers, and protect recurring revenue."

Leaders in the field Some notable companies have already earned distinction for their analytics cultures. As Griffin told The Wise Marketer: "Take casino operator Harrah's, for example. Look at the competitive gap between Harrah's and other casino operators that was created with decisions based on analytical tools. Harrah's financial results have been breath-taking."

Another company, Ariba (a Silicon Valley-based spend management company with US$300 million in annual sales), uses CustomerSat's systems to produce 'Action Alerts' that notify account managers about at-risk customers. The results of follow-up calls to those customers are carefully logged and acted upon. Ariba has also set up customer advisory councils, quarterly management reviews, and customer focus groups to further target operational improvement priorities.

Questions to ask So how can a company avoid the situation in which analytically-minded competitors lure their customers away? Griffin suggests that executives should start by answering five key questions about their own market:

  1. How do you set operational improvement priorities today?
  2. Where is the voice of the customer in the decision making?
  3. In debating operational priorities, how often do your decision makers and influencers say "I think..." rather than "The data suggests...")?
  4. Which competitors are using customer analytics, and how are their market strategies changing?
  5. What risks will you face if operational decisions aren't tied to customer intelligence?

For additional information: ·  Visit CustomerSat at ·  Visit Griffin Group at