Customer centric knowledge management

Prof. Chhabi Sinha

Customer centric knowledge management

A study by Gartner found that 75 percent of the leading companies are incapable of creating a unified view of the customer. Most of the challenges in the organisational performance originate from the maintenance of customer data which include Lack of data availability Poor storage and management Ineffective sharing and usage

Types of customer knowledge

Davenport distinguished between several types of customer knowledge -quantitative ,data driven knowledge found in transactional systems -Knowledge derived from interactions with people including experiential observations,comments,lessons learnt ,qualitative facts etc -Tacit knowledge which is unstructured and difficult to express and must be converted to explicit knowledge

Customer knowledge measurement

Companies measure three aspects of customer knowledge -The value customer knowledge has(intangible asset measurement) -The process by which it is produced and consumed(knowledge management operations) -The quality of the knowledge or data(data quality)

Customer centric knowledge management

Figure 1 depicts a conceptual model of the CRM development stages.

The stages are determined by the level of IT employed and the sophistication/integration of the information system used in the organization.

The higher the level of IT the higher the integration of CRM into the organization's IT/IS architecture

First Stage
The first CRM development stage is the preliminary, non IT-assisted stage. Organizations belonging to this stage have a very limited or not at all use of IT as far as the management of customer relationships is concerned. However, these organizations use customer related knowledge management instruments and have some type of a mostly manual customer satisfaction and/ or complaining data recording/processing system, indicating, thus, their positive attitude and orientation towards defensive relationship marketing

Second stage
The second CRM development stage is the IT-assisted CRM, predominately a manual process that uses IT to enhance the company-customer relationship and analyze customer-related data.

Customer data are mainly collected manually but recorded and analyzed by using spreadsheets, database systems and statistical packages.
Organizations belonging to this stage are expected today to have some Internet presence and manage effectively and efficiently customer satisfaction and

Third stage
The third CRM development stage is the IT-automated CRM, which emphasizes customer interaction by using a number of technologies, such as the Internet and telephone/computer integration. Acquisition of customer profiles, tracking of customer purchase patterns and trends and interactive service provision have been made possible by the advances in IT . Companies belonging to this stage have active Web presence, use EDI systems, engage in e-commerce and have implemented ERP and operational CRM systems aimed at business processes optimization and sales force automation. Processing of customer requests and orders and management of customer accounts are expected to be timely and accurate and generally at a high level of efficiency.

Fourth Stage

The fourth CRM development stage is the integrated CRM (iCRM), leading to customer personalization and high level of service and customer satisfaction. At this stage, companies employ sophisticated CRM information systems providing highly integrated back-office, front-office and Internet functions. Personalization software includes a number of analysis technologies such as data mining, collaborative filtering and rules engines . Supply chain optimization and analytic functions are also expected at this stage through the use of Web-enabled decision

This will probably require not only enterprise-wide sharing of information so that customer-centric knowledge could be available to every decision maker inside the organization but also sharing of relevant business information with customers and business partners aiming at overall customer satisfaction, processes efficiency and cost minimization.

TESCO-A Retail customer divisibility campaign

TESCO , one of Europes largest and most data-advanced retail chains is one company known for proper gathering and application of in-depth customer information to optimise its customer share Its customer database contains not only the demographic and life-style data ( including the total dollars spent on food items in stores and the customer response to its promotions and other programs) But also specifics about its customers interest in,and use of a diverse range of other food-related services and non-food products and services

Case study continued..

The company has leveraged on the customer data drawn from its loyalty programme to diversify into the attractive banking and financial services sector. The loyalty card programme istracking several hundred million instore purchases per day The company developed 5000 customer needs segment with each segment receiving the personalised coupons

Case study continued..

Tesco would create upto 1,50,000 variations of its promotion and reward statement mailings each quarter. The result has been tightly targeted messaging and marketing oppurtunities giving TESCO the ability to address individual customer requirements by the purchasing situation. Its coupon redemption rate is 90 percent