Smart Segmentation

By now we know that we can't treat all of our customers the same. We understand the value of segmenting our market into relatively homogeneous groups based on things like Geography, Demographics, Psycho graphics, Purchase History, or Behavioral Responses.

We also have a wide array of tools, online and otherwise, that make the task of understanding your market much easier. The top companies are not only utilizing these tools and techniques, they are also creating an analysis-driven culture.

What are leading companies doing that the others can follow? In the fall of 2008 the Aberdeen Group published a great white-paper that outlined the characteristics of customer analytics efforts of top organizations.

The following framework is a good starting point for organizations that are beginning to lay out their road map.













At the end of the day, the linchpin of success for any analytic based solution is the quality of input data. To that end the top companies have a centralized database of customer information so that they can ensure a single view of the customer. That old and over-used adage, "garbage in- garbage out" rings very true.

With a quality infrastructure in place your organization can do fun and beneficial things like RFM and Propensity Analysis. That's where the real value and profit is.

Turning data into gold

The internet has been both a blessing and a curse for those of us who are in the business of turning data and information into actionable intelligence. On the plus side, we have more and more information than we could have ever wanted. Not surprisingly, this is also the downside. Plus we will also need to spend more time validating discovered information because most of it is second rate.

Here is the standard hierarchy associated with knowledge management within firms. (From least to most important)

1. Data: Facts and Observations. Ex. 1st Qtr Sales for company X are up 5% over last year.
2. Information: Collection and some synthesis of the data. Ex. The sales growth was attributed to the launch of product Y.
3. Knowledge: The mix of information, experience, and context obtained in a value adding process. Ex. The launch of product Y by Company X represents an aggressive strategy towards attacking a new market and taking on a new set of competitors.
   

An experienced practitioner of competitive intelligence will know how to effectively mine information and data so that a solid hypothesis can be created and tested. These hypotheses will ultimately guide and direct strategic decision making.

More importantly, companies need to create an environment where every employee is capable of contributing to the overall knowledge management mechanism. This involves creating an appropriate culture, providing in the necessary infrastructure, and enabling efforts through the right IT support.

A previous blog entry mentioned the Chatter tool by Salesforce.com as an excellent platform for information gathering and sharing. We've also talked about the importance of promoting information gathering and sharing through every aspect of business activity. Finally, has the organization made the gathering and synthesis of information as easy as possible for employees through a proper infrastructure.

This graph, taken from McKinsey, outlines a proper framework for designing the appropriate knowledge management or competitive intelligence program.

Predictive Analytics for Marketing

In the past couple of years the light has gone off and companies have started to finally value what predictive analytics and data visualization can do for their marketing efforts. Now these tools have expanded beyond the realm of direct marketing and they have begun to permeate to other fertile grounds where there is sufficient data to be mined.

Laura Patterson and MarketingProfs.com have done a great job of summarizing the most commonly used predictive analytics tools when it comes to marketing. Check out the link.

Salesforce.com, Chatter, and Competitive Intelligence

We are exceptionally excited to use the new Salesforce.com offering, Chatter, once it launches. Why? Because it has the potential to be an incredible platform for gathering and disseminating competitive intelligence. If it is half as cool as the presentation, it will run circles around Share Point and the other current offerings.

Take a look...

Beating the Odds as a New Venture

We are spending more and more time working with companies on the far left end of the growth curve. These are nascent enterprises that are fueled by a great idea and a desire to shake up the market place. They are enterprises that are willing to take risks in their journey of growth.

Fellow BYU alum Clark Gilbert writes a great piece for the Harvard Business Review here.
It explains that while there are many risks naturally inherent in starting a new venture, most of the successful ones are able to identify certain risks and manage them. By discovering and managing their myriad risks they are able to see a better overall result.

One of the big risks that can be minimized? A proper understanding of one's competitive environment. Hint, Hint....just sayin'.

Tough Times and the Competition: Making a Case for Competitive Intelligence

Tough Times and the Competition: Making a Case for Competitive Intelligence

Read this great article from my mentor and Thunderbird professor extraordinaire, Paul Kinsinger. Some very relevant insights regarding how competitive intelligence needs to be used during tough times like the present.

How to elicit competitive intelligence

Here is an interesting presentation from fellow T-Bird alum, Stephen Hernan. It is a general discussion on various tactics that can be employed when trying to elicit intelligence from the people managing the organizations that you might be following.

Discussion regarding the ethics of some of these recommendations aside, he does a good job of explaining how human interactions can be manipulated for the sake of gaining intelligence. As anyone who has spent time gathering competitive intelligence will tell you, getting actual actionable intelligence from a living, breathing human being is quite a more difficult and unpredictable challenge than just relying solely on secondary sources.