T H E C I O I N S I G H T S T R AT E G Y W H I T E B O A R D

How organizations track customers . . .

Increasingly, organizations are focusing on understanding their customers in 1) Manage your customer touch points
to retain them longer—and acquire more
1) Give your current customers more of what they want 1) Find prospects similar to your best customers
order to increase customer satisfaction and maximize lifetime customer value.
Insights gleaned from observing customers can drive product improvement, 2) Record and analyze behavior 2) Determine which ones are most profitable 2) Tailor offers to them
loyalty, word-of-mouth referrals and cross- and up-selling. 3) Maintain data integrity 3) Focus on increasing sales to them 3) Test your offers and roll out the winners
(Potential) Customers interact with Touch Points may elicit various Behaviors may be linked to customers by Data Capture Systems feed Customer Databases require frequent Cleansing ensures data integrity needed for Segmenting Customers makes it possible to find Lists of Similar People are good candidates for Offers are made to

Stores Purchase Credit card transaction records De-duping By RFM From:

Data cleansing vendors - merging lists More and more organizations - recency In order to find the right lists, - associations Direct marketing campaigns

A feedback loop forms when an offer reaches a potential custormer. See the left edge of the diagram.
include: employ their own data stewards organizations typically retain are developed by direct marketing
Web log files, cookies, adware - Ascential Software - purging duplicate entries to define customer segments. - frequency list brokers or direct marketing professional agencies such as:
- DataFlux They often rely on business companies such as: - Digitas
Information on customers may include Online stores Save data - Firstlogic intelligence tools and forecasting - monetary value - American List Counsel volunteer and civic - Ogilvy May include:
- Group 1 Software tools from firms such as: - Direct Media - PGI
demographic, behavioral and appended Product registration - Trillium Software Updating data fields - Cognos These metrics can be combined - Intelledyne recreational - Wunderman - discounts
- PeopleSoft - Market Touch
data, for example: - incentives (gifts, services) E-mail change of address
- mail returned - SAP
to determine the value of a - Millard Group
religious and political Printed pieces, e-mail and Web
- gifts
Name John Q. Public Catalogs Sign up - cards may include data on: services are available from:
- Acxiom
- address changed - SAS customer to an organization. Companies may also share list
- catalogs pages can be individually tailored
to include text, images and offers
- information
Social Security Number 012-34-5678 - online forms - current customers - Experian About 20% of U.S. addresses and behavior information through (with response data) appropriate to individual customers (e.g., white papers)
- ReturnPath cooperative databases such as: by using dynamic printing techno-
Physical Address number, street (apt #), 123 Main St. - prospective customers change each year, according By response to promotions - Abacus - magazines logy and personalization software - trial memberships
- iBehavior from developers such as:
(district), city, state, Normal, IL
postal code, country 61761
Phone service centers Inquire Loyalty programs - distribution channels used to the U.S. Postal Service, whose Response to one promotion - Z24 (with reader survey data) - IQ Advantage
- Nimblefish
E-mail Address jqp@yahoo.com
- cards - products purchased National Change of Address may double the likelihood of - Responsys Typically, variations on
- discounts for volume purchases - promotions offered program makes data available response to another. List rental fees start at about offers and messages are
Phone Number 309-123-4567
Web sites Visit or read to direct marketers. $50 per 1,000 names, but tested on sample groups
Driver’s License Number state IL
number 1234567 Customer-generated data Integrating the disparate By regression analysis names that are more difficult (about 10,000 people).
Real Estate Title state IL - birthday reminders data sources presents several Enhancing (filling in the blanks) Fair Isaac Company (FICO) scores Looking for correlations to find—and presumably The most successful ones
county McLean express consumer credit worthiness.
title book number 12 Personalized Web pages Ignore - gift registries and wish lists challenges, including: Enhancing is often provided - with public information from Scores range from approximately between behaviors and more valuable—such as those are rolled out to much
by list compilers such as: 300 to 900. 700 and above is good.
page/map
plot number
34
567 - shopping carts - connecting legacy systems - Acxiom InfoBase sources such as phone books Below 500 indicates a risk. other variables. of doctors, cost much more. larger groups.
- ChoicePoint MarketView Scores are determined by about 40
Credit Card issuer Visa
- data accuracy (also owns a direct and title records factors, though the exact algorithms
marketing agency) are proprietary. Factors include:
account number
code
1234 5678 9012 3456
7890
Direct-mail offers Behaviors map to steps in Purchase suggestions - data security and privacy - Equifax - with private credit information - 35% payment history
By lifestage and lifestyle Geo-demographic categorization Direct-mail offers are
- Experian systems include:
expiration date 04/05 the purchase cycle. Lower - made by collaborative filtering - identifying the same customer (also a list broker)
such as FICO scores - 30% amounts owed
- 15% length of credit history
Commercial systems for - PRISM, 1974 not the only outcome;
- VALS,™ SRI 1979
Insurance Policy issuer Blue Cross steps precede higher, though - made by human experts (establishing a unique identifier) - RR Donnelley
(also a major printer)
- 10% new credit
- 10% types of credit in use
correlating location with (Values and Lifestyles) the process could also
account number 123456789 - MicroVision
E-mail offers customers may skip steps. - based on fixed dates - linking related customers - TransUnion demographic and psycho- - Mosaic result in changes to any
Bank Account bank Bank of America - P$YCLE
account number 987654321 - based on time elapsed - negotiating customer ownership graphic characteristics. - LifeP$YCLE
touch point.
Loan bank Wells Fargo
account number 0123456789
One touch point may lead to another. Estimates for services
Brokerage Account broker Charles Schwab A Customer List is cleansed and combined with . . . Information from a List Compiler to yield an . . . Enhanced Customer List may be correlated with . . . Prism NE Categories for a customer’s address, e.g. . . .
account number 0123456789
- link a customer to a need
Name John Q. Public Name John Q. Public Name John Q. Public In the case of John Q. Public (a customer living 47) City Startups Lifestyle Traits: Demographics Traits: 2003 Statistics:
Rewards Program organization United Airlines in Normal, IL), Prism correlates the zip code In City Startups, young, multi-ethnic singles have settled in neighborhoods 1. Go to nightclubs - Ethnic Diversity: High Asian, Black, AmInd - U.S. Households: 1,347,921 (1.23%)
account number 0123456789 Touch points may be sorted: Discount offers Physical Address 123 Main St. Physical Address 123 Main St. Physical Address 123 Main St. (61761) with five lifestyle categories (numbered filled with cheap apartments and a commercial base of cafes, bars, 2. Order pizza from Papa John’s - Family Types: Singles - U.S. Population: 3,401,154 (1.17%)
Normal, IL 61761 Normal, IL 61761 Normal, IL 61761 47, 27, 10, 12 and 53). Beneath the first lifestyle laundromats and clubs that cater to twentysomethings. One of the youngest 3. Read Rolling Stone - Age Ranges: 20-35 - Median HH Income: $23,270
Web Site Membership site Amazon - mass versus targeted communication - notice of upcoming sales category (numbered 47, right), we’ve listed Prism’s segments in America—with ten times as many college students as the national 4. Watch MADtv - Education Levels: H.S./College
user name
password
johnqpublic
jqp123 - one-way versus two-way
Product Serial Number

Registration Date
A1234-0987

01/03/03
+ = Product Serial Number

Registration Date
A1234-0987

01/03/03
description of that category along with lifestyle
and demographic traits, and recent statistics.
For details on other categories or to look up
average—these neighborhoods feature low incomes and high concentrations
of Hispanics and African-Americans.
5. Drive a Kia Spectra - Employment Levels: White-Collar, Service
- Housing Types: Renters
- Urbanicity: 2nd City
Club Membership club Gold’s Gym - communication versus distribution Customer research categories associated with your own zip code, 27) Middleburg Managers - Income: Poor
account number 123456 Store Number 123 Store Number 123 visit www.clusterbigip1.claritas.com/
MyBestSegments/Default.jsp?ID=20 10) Second City Elite
Professional Organization organization AIGA FICO Score 635 FICO Score 635
account number 12345 12) Brite Lites, Li’l City
In this example, John Q. Public visits Store 123 . . . and he purchases a product identified as SKU A1234, Later, he fills out the product registration form and mails it back. Phone Number 309-123-4567 Phone Number 309 123-4567 Written and designed by Dubberly Design Office | July 28, 2004 | version 7.0
Subscriptions Time a fact coded in his product serial number. . . Then, his information is added to a customer database. . . 53) Mobility Blues Special thanks to Candy Desantis, James Hipkin, Greg Olson, Paul Pangaro, Julie Riegel,
Home Owner Status Owner Home Owner Status Owner Randy Spurrier and PJ Sontoro for their expert input and helpful suggestions.