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Using customer intelligence in a service strategy: Tip #1

This tip from the six-part series on customer service excellence offers ways that businesses can use customer intelligence as part of a successful customer service strategy.

Business Success Through Service Excellence
Business Success Through Service Excellence
Chapter 2, Customer Intelligence

Discover tools for customer intelligence and get tips for using customer intelligence in a service strategy with this chapter excerpt. Learn what factors impact customer value and discover how customer intelligence can be used to define customer value.

Customer service excellence: Six tips in six minutes

 Home: Introduction
 Tip 1: Using customer intelligence in a service strategy
 Tip 2: Improving customer service with effective business processes
 Tip 3: Employee satisfaction and customer service excellence
 Tip 4: Building a service strategy with organizational leadership
 Tip 5: Change management in a customer service strategy
 Tip 6: Customer service excellence best practices

Businesses should consider these questions when evaluating what role customer intelligence is playing in the customer service strategy:

  • We encourage and act on feedback from customers.
  • We understand the drivers of customer satisfaction.
  • We are recognised as innovators in our market.
  • We build long-term profitable relationships in our chosen markets.
  • We monitor and track customer retention and repurchase intention.

An "outside-in" approach to strategy development means eschewing a reliance on management intuition to "know" customers and "understand" what they are seeking, and developing instead a curiosity about seeing matters from the customer's perspective. In some cases, that can mean seeing things from the customer's perspective.

These chapter excerpts from the book Business Success Through Service Excellence, by Moira Clark and Susan Baker, are used by permission from Elsevier Publishing. Published by Butterworth-Heinemann, a division of Elsevier, 2004.

There are factors that maintain value for customers. These are the "hygiene" factors, or the core features and attributes that all competitors must offer to be considered players in a particular marketplace.

Surrounding these are the "value enhancers." These are the key discriminating factors that set the organization apart from competitors in the eyes of customers. Occasionally, these factors may be "adopted" by customers and become talking points, creating great word-of-mouth marketing. Organizations offering value enhancers will build market share quickly, rearranging the competitive forces in the marketplace as they do so.

The third set of factors to be identified through customer intelligence systems are those that diminish and destroy value in the customer's eyes. Put simply, these are the "turn offs" for customers. Once identified, these order losers should be eliminated from the offering.

Having identified the various components of value that factor in the customer's perception of value, the organization then needs to understand their exact meaning for customers. These may be described by customers in terms of the features and attributes of a product or service, but managers need to understand precisely the nature of the benefits that these features and attributes deliver. In some cases, they may offer higher level, intangible benefits that satisfy certain personal values or business goals (see Figure 2.2 of this chapter). This is where customer satisfaction surveys need to be focused if they are to pick up meaningful data.

Customer intelligence, then, enables the organization to define value from the customer's perspective. It provides a means of identifying underlying sources of customer motivation. This needs to be set within the wider socio-economic environment so that organizations are alert to trends that may impact on customer motivation. It is also important that organizations appreciate that perceptions of value shift over time and what were once value enhancers with a certain group of customers can quickly become the hygiene factors. Organizations that fail to appreciate this can find their customer satisfaction ratings take a nosedive.

Download the rest of this chapter on customer intelligence.

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