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Just Ask the Customer

I grabbed my wife’s Harvard Business Review (HBR Jan-Feb 2012) edition before a recent plane ride to a customer meeting.  After diving through a bunch of case study-type narratives I ended up in a section titled “Stop Collecting Customer Data” (page 57), which was part of HBR’s “Audacious Ideas” series.  This series was aimed at showcasing some proclaimed thought leaders’ very forward-thinking and, in my opinion, also some rather ill guided ideas full off naïveté. 

In a nutshell, the author, Doc Searls, poses that when customers are in charge of publishing their intention and related data (payment, shipping, demographic) online, they will be more content as compared to receiving today’s personalized often non-targeted marketing campaigns. These are typically generated by mining millions of transactions, extrapolating the next purchase.  Let’s face it, this new paradigm, I wrote about in one of my prior IBM blog posts  rests on your understanding of the scope of what makes up master data.

Searls, calls it the “intention economy”, while I branded it “Customer Motivation Management” in my old blog  to stay with standard industry nomenclature.

What grabbed my interest was also that the author, a fellow at the Berkman Center for Internet and Society at Harvard and author of “The Intention Economy: When Customers Take Charge” claimed the implementation of this effort to be

  1. Easy in terms of degree of difficulty
  2. Obstructed by legacy investment in CRM
  3. Best timed before customers revolt

It should be obvious why it is an easy task. Portals are old news, (p)reference data management as well as posting motivations on Facebook, Craigslist, eBay, etc. are too. I am not sure; however, why it would be so difficult to justify in light of legacy CRM system investment. The CRM application touch points would still be various in nature, handle the interaction style and quality variation as well as transaction workflow for order placement.

MDM would still validate and establish the customer’s uniqueness; provide a common product catalog; capture all relationships, etc. However, armed with (p)reference attributes created and managed by the customer (and maintained in MDM), it can now serve the direct need immediately. This is now done without calling upon a propensity score from a data warehouse environment, which was created by mining his and other customers’ past transactions. Let’s face it; even dynamically generated offers are still skewed by a hard-sell paradigm through correlating historical transaction data, with clickstream analytics, inventory and margin considerations. The degree of sophistication is endless, but is it really necessary?

I really wonder how many people find the “other people also bought this item” so helpful that they actually buy it too, unless the products are meant to be an additive sale (pasta and sauce for example).

As I argued in my previous blog, while data mining is a worthwhile exercise for strategic decisions requiring a lot of sample data and continued model adjustment, for single transaction, why not just ask the customer (or give them a tool to ask). Asking also takes the educated guessing out of product development as well. Moreover, this would also make marketing’s mission easier, less costly and more deterministic since interactions are based on actual need (not calculated/manipulated).

Also, I don’t think this should be done before customers revolt. Customers want to govern their own data and I am sure companies also want to save money doing some of this. Do it now and get a leg up on the competition and establish a consumer empowered, we-listen premium brand, fostering loyalty and even more important in this Facebook-economy – referrals. All this requires a good amount of flexibility, particularly on the technology platform used to support these processes – something to keep in mind during evaluation time ;-)   At any rate, go ahead and start the discussion with your customers today.

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