Kevin Hillstrom: MineThatData

Exploring How Customers Interact With Advertising, Products, Brands, and Channels, using Multichannel Forensics.

July 20, 2007

Multichannel Retailing Week: Consumer Intelligence

What spelled doom for me at the end of my tenure at Nordstrom was the concept of "consumer intelligence".

This was a movement that, in retrospect, anybody could see coming. But when you're slogging through day-to-day issues, it can be easy to miss.

Think of "consumer intelligence" as the sum of all activities that explain overall customer behavior.
  • Customer performance in catalog marketing campaigns.
  • Customer performance in e-mail marketing campaigns.
  • Customer performance in online marketing campaigns.
  • Database Marketing, the traditional role of direct marketing campaign execution.
  • Organic customer performance ... what customers spend when not marketed to (a very important concept in retailing, not well understood in the online environment).
  • Business Intelligence, the software tools and general ad-hoc queries that help solve generic business questions about customers, merchandise performance, and store performance.
  • Social Media Experts, folks who thoroughly understand how customers are interacting with tools like Facebook, Blogs, Twitter.
  • Customer Advocates, the folks who strongly believe that companies require "Chief Customer Officers" to better understand the challenges facing customers.
  • Multichannel Ombudsmen, the folks who understand customer behavior across channels, and then try to develop strategies like "Buy Online, Pickup In Store" that can be implemented by various channel leaders.
  • Lifetime Value, the net present value of all future customer transactions.
  • Statistical Modeling, condensing customer behavior down to an equation that explains customer actions.
  • Marketing Research, including surveys and focus groups.
  • Merchandise and Market Share Analysis, source from databases like NPD, Scarborough and Simmons.
  • Competitive and Customer Research from organizations like Forrester, Jupiter, Gartner.
The goal is to take these activities, typically done by separate individuals across the organization, tie them together, identify actionable findings, and then drive strategy through the EVP/C-Level/Board-Level individuals at multichannel retailers.

To be successful, the consumer intelligence leader must recruit a talented team of "translators", folks who synthesize the technical information obtained by staff members who work in the various functions, then put the information into a context that is relevant to the EVP/C-Level/Board-Level individual.

In some ways, you can think of it as the role that Management Consultants used to play, executed in a considerably less expensive manner.

It was good to have this experience at Nordstrom, because the companies I visit these days are ultimately asking for this solution --- they just don't know this is what they are asking for. The business leaders want folks to distill geeky, complex customer information into actionable sound bites that they can work with.

As our marketing world becomes more fragmented, with terminology and techniques that are unique to each discipline, it will become more important for a "Consumer Intelligence" expert to tie together each discipline. Multichannel retailing is a logical early adopter of this emerging discipline.

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