1. Find and Keep the Customers You Want:
The Customer Insight Mandate
3

2. 4

3. After a half-decade of inward focus, companies are awakening
to the need to shift from customer retention to acquisition.
In fact, executives we’ve spoken with roundly agree that
their company’s success—in some cases, survival—is directly
tied to their ability to more effectively acquire new customers
and subsequently develop much more intimate relationships
with those customers.
Yet we’ve also heard and seen the frustration that companies
experience in addressing this challenge. In many organizations,
despite several years of Customer Relationship Management
(CRM) investment, capabilities for developing insights on
customers—and successfully acting on those insights—are
still lacking.
In this paper, we share our thoughts on how companies
can transcend the obstacles to generating deeper insights
into their customers. We explore how to use customer
insight to dramatically improve both the quality of sales
and marketing campaigns, as well as customer loyalty
and lifetime value. And we provide examples of leading
companies that are using customer insight as a key tool
in their journey to achieve high performance.
5

4. Find and Keep the Customers You Want:
The Customer Insight Mandate
Customers are key, but executives in France and Japan. French with finance and insurance companies
executives cited increasing customer fell by 1.7 percent (and 6.5 percent
capabilities are lacking loyalty and retention (56 percent) and since 1994). Furthermore, for the first
increasing customer service capability time ever, consumer satisfaction with
As companies continue their quest for (50 percent) as their top issues, while e-commerce providers dropped—by 2.7
growth, the need to build stronger, more in Japan, acquiring new customers (45 percent from 2004.
profitable relationships with customers percent) was tied for second on the
assumes greater importance. Accenture top-issues list2 (See Figure 2). Another well respected barometer of
research shows that growth is, indeed, consumer attitudes—this one involving
on the minds of many executives as the However, many companies—despite the automobile industry—is J.D. Power
economy improves. An Accenture survey making significant investments in CRM & Associates. In a recent study, they
of 244 executives around the world over the past several years—still aren’t discovered what should be a troubling
found that 42 percent will be focused well-positioned to connect with cus- trend for automakers: 17 automobile
primarily on growth in 2005 and an tomers in ways that maximize loyalty companies retain fewer than half of
additional 32 percent will attempt to and repeat business. This is reflected their customers when they buy a new
strike a balance between growth and in a number of industry statistics that car, with many of these companies
cost control. 1 speak to consumers’ ongoing frustration only holding on to one-third of their
or dissatisfaction with various product customers.
In a second survey of more than and service providers. One such statistic
800 global executives conducted by is the American Customer Satisfaction Churn is an accurate gauge of customer
Accenture, 32 percent of respondents Index created by the University of displeasure, as the telecommunica-
said acquiring new customers is one of Michigan. The most recent edition of tions sector knows all too well. Most,
their top business issues—just behind the index found that consumers grew if not all, of the major telcos and cable
changing organizational culture and less satisfied with product and service television providers have struggled
employee attitudes (33 percent) and providers in the past decade. In the throughout the past decade to retain
attracting and retaining skilled staff past year, satisfaction with retailers their customers as the industry has
(35 percent) (See Figure 1). The focus on dropped 3.2 percent (and just over 4 undergone significant technological and
customers is especially strong among percent from 1994), while satisfaction market upheaval. Cable companies,
6

5. for their part, continue to lose large to engage customers with offerings that Another study, conducted by Strativity
numbers of subscribers to hard-charging more closely meet their needs. Group, reinforces Accenture’s findings.
satellite providers, while traditional In this research, 54 percent of execu-
and mobile telephony companies seem For example, it is well documented tives said their company’s relationship
intent on fighting a price war that that to generate true insights into with the customer is not well defined.
no one can win. The vast majority of customers’ behavior and preferences, a Even worse, fewer than 20 percent had
customers switching telco and cable company must have a complete view of data on key aspects of their customer
providers typically cite poor service as each customer’s interactions and history relationships, including the cost of new
their top reason for making the move. with the company—whether those customers, customer complaints and
interactions were via a store, website, even average annual customer value.3
catalog or call center. Yet, according
to an Accenture survey of global Clearly, companies must do a much
No insight equals marketing executives, only 29 percent better job of knowing who their
no connection of companies surveyed have a single, customers are and what motivates
consistent view of all customers across them if they are to stimulate the strong
all business functions. customer loyalty that is the foundation
Why are companies continuing to
for business success.
struggle building strong and lasting
Furthermore, the same survey found
relationships with their customers?
that companies are not regularly
Based on our research and work with
capitalizing on customer interactions as
leading companies around the world,
selling opportunities (typically because
we believe the root of the problem
1. “The High Performance Workforce Study,quot;
they lack a complete view of their
is that most companies still lack the Accenture, 2004.
customers). Only 39 percent of partici-
capabilities to develop and act on robust 2. quot;Accenture Global Awareness Tracking Survey,quot;
pating marketing executives said their
customer insights—and that shortcom- January 2005.
companies offer additional products and
ing is preventing them from using 3. quot;2004 Customer Experience Management Global
Survey,quot; by Strativity Group.
services each time a customer contacts
customer interactions as opportunities
the company.
7

6. Business issues ranked by order of importance
Attracting and retaining skilled staff
35%
Changing organizational culture and
33%
employee attitudes
Acquiring new customers
32%
Develop new processes and products 29%
to stay ahead of the competition
Increasing customer loyalty
29%
and retention
Managing risk
29%
Improving workplace performance 28%
Increasing shareholder value
27%
Using IT to reduce costs and
27%
create value
Being flexible and adaptable to
26%
rapidly changing market conditions
Developing employees into
26%
capable leaders
0 5% 10% 15% 20% 25% 30% 35%
Figure 1. Survey of 800 executives conducted by Accenture.
Customer insight Creating a single view
A consumer may have a home mortgage,
of the customer
savings account, credit card, and
unlocks the door to investment portfolio with the same bank. The capability that is at the core of
Yet, because these products often are customer insight is the single view of
profitable growth sold and managed separately, the bank the customer. Without such a view,
has no way of knowing the true value it is impossible to paint a complete
Where does such knowledge begin? It
of that customer across its product picture of customers and their needs
all starts with customer insight. The
lines. Similarly, telcos have millions of and preferences. Gaining a single
logic really is quite simple: unless a
customers, each of whom purchases view of the customer begins with the
company fully understands key aspects
some combination of broadband, implementation of a data warehouse
of a customer—including behaviors,
wireless, local, long-distance and into which all relevant internal customer
attitudes, and perceptions of the com-
entertainment-content services. The big data—often widely dispersed throughout
pany’s offerings relative to competitors’
challenge is to know what that specific the organization—is fed. This data includes
products and services—it will be unable
combination is for each customer and customer contact information, products
to take the steps necessary to create a
treat them accordingly. or services purchased, mode of purchases
strong bond with that customer.
(Web, store, call center, catalog) and
To be sure, the challenge companies monetary value of purchases. Importantly,
Of course, the simplicity of the concept
face is quite significant. But it can this information must be augmented by
often clashes with the reality of managing
be solved. A number of organizations external demographic data on customers.
thousands, hundreds of thousands or
—including a country’s postal service, By teaming a customer’s transaction
millions of customers and their multiple
an energy company, a telco and a history with key data such as number
interactions across numerous touch
large retailer—have taken major strides and ages of people in the customer’s
points. This is especially true with
toward generating and acting on strong household, median income of the
industries such as telecommunications
customer insights. In the process, customer’s neighborhood, and customer’s
and financial services, which often have
these organizations are building better ethnic heritage, a company can transcend
different types of relationships with
relationships with their customers, the one-dimensional, internal picture
customers depending on the particular
becoming more competitive and achieving of a customer that purchase history
service or product being purchased.
higher performance overall. alone provides.
8

7. Just as important
as getting the right
type of data in the
data warehouse is
ensuring the data’s
quality and accuracy.
9

8. Just as important as getting the right priate to the amount of business they At the call center level, lack of integra-
type of data in the data warehouse is do with the postal service, and grow tion prevented call center agents from
ensuring the data’s quality and accu- its overall customer base. However, detecting the difference among various
racy. As the old saying goes, “Garbage they also recognized that their existing callers—for instance, a corporation that
in, garbage out.” We have seen many customer-facing database systems were did $10 million worth of business with the
companies spend considerable time and holding them back. These systems were postal service versus an individual who
money implementing a data warehouse, spread throughout the postal service, did $10 in shipping. Because they had no
but fail to take the necessary steps to had their own set of business rules and way of knowing how much business each
ensure that what goes into the ware- view of the customer, and had no link- person calling the postal service was
house is clean and consistent. Tools and ages to each other. responsible for, agents treated every
governance processes must be put in caller the same way—whether it was
place to maintain data integrity and, This lack of integration and pervasive the $10 million customer complaining
hence, its value to the organization. data integrity issues resulted in serious about recurring service problems or the
operational problems for the postal $10 customer claiming his package was
One country’s postal service has service. Because the organization didn’t not picked up on his doorstep. Besides
experienced firsthand the value of a have the tools in place to handle the obvious implication—that the more
single view of the customer. Facing variations in the name or address of valuable customer was not receiving
formidable competition in the express the same customer, a misspelling of a more attentive and urgent service—
mail segment, the organization was in customer’s name could lead to the same this situation also resulted in missed
trouble. It not only was losing money company being counted as two different opportunities for cross-selling and agent
on various customer segments, it was entities. This was especially problematic follow-up to ensure that the problem
losing customers to competitors better when it involved a major customer, has been resolved satisfactorily.
equipped to understand and meet their because reports based on such data
needs. Agency executives knew that the would not provide an accurate picture The postal service eventually decided
organization needed to develop deeper of just how much business that customer it had to act. The organization first
insights into its customers to create conducted with the postal service (and, designed, developed, tested and deployed
more relevant service offerings, ensure consequently, the importance of that a technology solution that automatically
a level of service for customers appro- customer to the postal service). cleanses and standardizes the data in
One telecommunications
company knew that the
only way to grow was to
convince customers to
switch from its competitors.
10

9. all the postal service’s systems, and uses As a result of this initiative, the postal the behavior and value of customers;
advanced matching capabilities to link service team now has the capability to and tactical customer and prospect
corresponding customer entries across target marketing, sales and service ef- segmentation to continually improve
the disparate organizational systems forts to specific customer needs, as marketing campaigns based on
to one unique identifier (a customer well as identify new revenue and cost- initial response.
identification number). Next, the agency cutting opportunities. Whereas in the
created a central repository of the 16 past, the organization was centered Building on effective segmentation, the
million uniquely identified postal service on products and services, its new company then can take advantage of
customers, as well as a cross-reference customer-centric model enables postal best-of-breed marketing practices and
capability that allows the postal service service employees to cluster products a more rigorous, scientific approach
to know which systems are storing by particular customer segments, to customer interaction to plan and
transaction information for each of thus resulting in better service for coordinate multi-channel campaigns
these customers. The various source these customers. that reach customers with the
systems can access these capabilities, appropriate offers via their preferred
Executing more precise targeting
in batch or in real-time, depending on channel. And by using advanced
and superior campaigns
their business needs. Finally, to improve technology to automate the campaign
the quality of customer data stored in With a single view of the customer, development and execution process, the
the source system databases, the project an organization can take the next step company can capture information on
team worked with each source system toward building stronger customer campaign performance to continually
business owner to assess data quality relationships: executing more precise improve campaign effectiveness.
and address issues such as duplicate targeting and superior campaigns.
customers, bad address data and missing Using a variety of analytical tools and The experience of one global telecom-
customer information. The resulting processes to deeply analyze customer munications company illustrates the
data consistency across all systems and prospect data, the company can impact more precise targeting and
gives the postal service a clear and conduct strategic market segmentation better campaign execution can have on
accurate picture of every way in which to understand its relative position in the a company’s marketing efforts. Facing
the organization serves a customer—and marketplace; strategic customer and a saturated mobile phone market and
opportunities to enhance that service. prospect segmentation to understand stiff competition, this company knew
11

10. Organizations are
becoming experts at
learning what their
customers want and
need, and then giving
it to them.
that the only way to grow is to convince customer data would be consolidated. the company has improved the speed
customers to switch from its competitors. This repository enables the company of campaign creation and execution
Doing so hinged on the ability to under- to quickly pull relevant data for and has strengthened its analytical
stand customers’ lifestyles—and then to specific campaigns. It also allows the capabilities and on-demand evaluation
more effectively communicate how its company to conduct complex analyses of campaign performance. Company
offerings fit into those lifestyles. that often require cross-referencing executives believe the new campaign
with different data sets. Next, the management capabilities give the telco
To address the challenge, the company company implemented a new campaign a strong competitive advantage not only
streamlined and automated a large management system that would access by solidifying the company’s current
number of activities associated with the the data in the repository for analysis, market leadership position, but also by
planning, execution and evaluation of segmentation and list generation by laying the groundwork for future efforts
marketing campaigns. The company’s marketing personnel. This system is that are expected to include real-time
existing marketing campaign design and critical to the marketing team’s ability to personalization capabilities that can help
implementation process was actually more efficiently and effectively launch the company boost revenue through
quite mature and effective. But the campaigns to the right audience, and increased cross-selling and up-selling.
process of identifying campaign targets to evaluate the effects in time to make
Boosting customer loyalty
and evaluating campaign effectiveness necessary adjustments.
and lifetime value
required considerable time and effort to
gather and cleanse data from disparate As a result of its efforts, the company History and conventional wisdom
systems, as well as to collect customer has reduced by 25 percent the cycle tell us it is much cheaper to keep a
feedback. Also, necessary adjustments to time of marketing campaigns from customer than get a new one. So while
the campaign could not be implemented initial data sourcing to final evaluation organizations make a pronounced
quickly because of the lack of an of campaign performance. In fact, the move toward more aggressive customer
appropriate online analytical tool. telco’s campaign process has become 32 acquisition, they must not do so at the
percent more efficient, as measured by expense of existing customers who
To improve its campaign management the amount of time that the activities are a prime target for competitors.
process, the company first built a associated with the campaign are actu- As customers become more informed
campaign data repository in which the ally adding value. Through automation, and competition intensifies, leading
12

11. companies have recognized the clear that the company no longer could customer service agents, marketing
necessity of instilling discipline and pursue business as usual. and sales specialists, and other parts
rigor in their customer loyalty activities of the business with complete views of
and boosting the lifetime value of their One of the company’s biggest problems customers’ product/service holdings and
most profitable customer segments. The was that its product orientation, their contacts within the company.
key to managing and growing loyalty coupled with a number of process
is developing specific experiences and technology shortcomings, made On the heels of the successful rollout
for each customer segment that are it extremely difficult for employees of the new CRM system, the project
unique to those customers and their to understand—and, thus, effectively team moved to phase two: adding
specific needs. By analyzing patterns market to and service—customers. an enhancement to the system that
of churn on a segment-by-segment Company executives recognized that would help call center agents become
basis, an organization can develop a incremental fixes and process tweaks more successful salespeople. These
deep understanding of the reasons why would not be sufficient; nothing short enhancements included “campaign
customers defect. Once a company has of a complete transformation in the way prompts” that are marked against each
identified its most important sources the company dealt with customers— customer’s record in the CRM system,
of value, it then can develop specific including marketing, sales, service and which is linked to a data warehouse that
loyalty programs that have the highest billing—was needed. contains more detailed information on
chance of being enthusiastically customers such as complete transaction
received by the most profitable The company ultimately embarked history and demographic data. Another
customers. on a multiphase project, the first improvement is a product configuration
phase of which involved creating a tool that enables employees to select
A major provider of gas, electricity and common CRM technology layer on the different types of options on a
a variety of home heating and plumb- top of the company’s legacy systems product (payment methods, rates,
ing services faced a loyalty crossroads for gas, electricity and home services etc.) along with a common three-step
of sorts. The confluence of three key customers. By aggregating the separate process to configure, price and submit
challenges—intensifying competition, sets of product-based information a sale. And a number of automatic
increasing customer churn and heightened into accurate comprehensive customer and integrated validation steps have
investor pressure for growth—made it files, the company could provide its been added as part of the sales process
13

12. Targeted campaign
prompts in the CRM
system have delivered
uplift in sales
conversion rates.
14

13. Current business issues: France Current business issues: Japan
Figure 2. Survey of 800 executives conducted by Accenture.
improvements, including address and dramatically. Following the completion business. This approach had the retailer
payment validation and credit vetting. of the second phase of work, average carrying a wide assortment that was
handling time for energy customers difficult for its sales force to support
As a result of the project, the company increased from 4 percent to 11 percent, and that greatly hindered profitability.
is enjoying numerous operational and but sales conversion rates rose by as The company thought that shifting to
financial benefits. All sales agents in much as 30 percent. Similarly average a customer-centric business model—a
the company now have a single view handling time for home services new store layout, selling strategy and
of its customers—and all the products customers jumped by 3 percent but was operating model geared to the retailer’s
they hold—over its three major business accompanied by an increase in sales most profitable customer group—would
areas (gas, electricity and home servicing). conversion rates of 7 percent. restore the organization’s growth
This single customer view has improved and profitability.
sales people’s efficiency because they Targeted campaign prompts in the
are entering fewer duplicate sales, no CRM system have delivered uplift in The retailer’s first step was to mine
longer wasting time trying to acquire sales conversion rates. A pilot of the its customer database to determine
customers that already are won, and campaign prompts functionality across the shopping and lifestyle traits of the
spending much less time recontacting four different sites demonstrated an company’s most profitable customer
customers for more information. average uplift in conversion rates of group. After conducting a fact-based
7.3 percent. Rejection rates on sales analysis of historical purchases
Because the CRM system supports a made by field agents have been reduced and primary research, the company
common process and front-end interface from 60 percent to 25 percent due realized that it didn’t need such a
to energy and servicing sales, all call to improvements in the automatic broad assortment. On the contrary,
center agents can easily generate quotes validation, credit vetting and address its most profitable customer group
and create customer orders—which verification processes implemented. And, wanted select, fewer items with
has greatly increased agents’ ability to within just a few months of operation, better sales support and higher-value
carry out cross-sales, and has spurred the CRM system significantly stemmed offerings. As a result of its findings,
agents to actively look for cross- the company’s loss of gas customers. the company began reformatting its
selling opportunities. Furthermore, the stores to expressly appeal to its most
customer-centric nature of the CRM A large retailer is another company profitable customer segments in various
system gives the company a unique that has boosted its top and bottom geographic areas. The new-format
ability to generate deeper customer lines on the back of stronger loyalty. rollout is still in its early stages, but
insights and marketing programs To differentiate itself in a crowded thus far, the company reports that
based on the actions and life events market and reverse a serious decline its new formats are generating sales
happening to its customers. These in revenue and profits, this organiza- at twice the rate of the company’s
operational benefits have led to some tion decided to make a major shift in traditional formats.
dramatic, measurable improvements in focus. Historically, the company had
the company’s business. For example, a very product-centric approach that
sales conversion rates have increased dominated almost every aspect of its
15

14. Conclusion
To be sure, building and Leading organizations such as and need, and then giving it
maintaining strong, profitable those profiled are examples of to them. In doing so, they are
customer relationships is far how customer insight can be positioning themselves to make
from easy. It requires significant a powerful tool in the drive and strengthen the connection
shifts in organization and culture, toward more valuable and with customers that is so vital to
sophisticated technologies and lasting customer relationships. keeping revenue and profits high
analytical capabilities, and the Armed with a single view of and leaving competitors far,
discipline to continuously monitor its customers—and leveraging far behind.
and measure the results of all that capability to segment
marketing activities. And, because customers more precisely,
of constantly changing market execute more effective and
conditions, “customer nirvana” efficient campaigns, and drive
is a journey, not a destination. stronger customer loyalty and
However, although difficult, it’s a higher lifetime value—these
journey that every company must high-performance organizations
take to grow and prosper in the are becoming experts at learning
next five, 10 and 20 years. what their customers want
16

15. About the Author
Alton L. Adams is the Global Managing Partner for Accenture’s
Customer Insight practice in the CRM Global Service Line. Mr.
Adams has more than 20 years of experience in marketing, sales
and general management. He has particular expertise in the use
of information for sales, marketing and risk management decisions.
Prior to joining Accenture, Mr. Adams was president of the
Database Solutions business at Experian, specializing in customer
information, decision support and target marketing services.
Before joining Experian, Mr. Adams held several positions in the
information services industry, including executive positions with
TRW, Equifax and Standard and Poors.
Mr. Adams holds an MBA in Marketing & Finance from the Wharton
School and a BA in Economics from Georgetown University.
He can be reached at: alton.l.adams@accenture.com.
17

16. About Accenture
Accenture is widely regarded as
Accenture is a global management
the leading provider of consulting
consulting, technology services and
solutions and managed services
outsourcing company. Committed to
designed to deliver high performance
delivering innovation, Accenture
to your business. The company infuses
collaborates with its clients to help
marketing, sales and customer service
them become high-performance
operations with strategic insight,
businesses and governments. With
sophisticated data analysis, advanced
deep industry and business process
technology and operational excellence.
expertise, broad global resources and
Combining experience, innovation
a proven track record, Accenture can
and a global delivery network, our
mobilize the right people, skills and
Customer Relationship Management
technologies to help clients improve
professionals team with clients across
their performance. With more than
virtually all industries to design and
115,000 people in 48 countries, the
implement strategies for creating
company generated net revenues of
customer experiences that enable
US$13.67 billion for the fiscal year
growth, increased profitability and
ended Aug. 31, 2004. Its home page is
high performance.
www.accenture.com.
Copyright © 2005 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.