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Customer Intelligence
Seán Kelly
Every so often, probably not more than once or twice in a decade, a book comes along that succeeds in crystallising a radical change in marketing thinking - what the jargon calls a paradigm shift. In doing so it both defines a moment which will be looked back on later as a seminal point, and sets an agenda for debate and action for years to come. In the eighties think of Rapp and Collins MaxiMarketing, in the nineties of Peppers and Rogers One to One. Halfway through the first decade of the new millennium the book is Sean Kelly's “Customer Intelligence".
The introduction opens by defining Customer Intelligence, with deceptive simplicity, as “the knowledge that an organisation has concerning the likely future intentions of its customers or prospective customers”. However, it then goes on to lay out the book’s objective as nothing less than a comprehensive examination of the trends, movements, successes and failures of the last two decades as organisations have attempted to gather, assemble and exploit customer information.
This is a book ambitious both in scope and in willingness to tackle the big questions. Here at last is someone willing to venture “an attempt to explain why the age of information has substantially failed to live up to its own hype”.
The author is eminently well qualified to take on this vast subject. A popular and respected speaker and teacher, delivering courses for our own IDM among others, Sean Kelly has already authored two books on data warehousing and mass customisation. What’s more he is able to base his observations on direct experience of working with a wide range of corporations, both large and small, while engaged in roles at the Data Warehouse Network, SAS Institute, Sybase business intelligence and Comhra.
Kelly’s elegant, jargon-free style and compelling arguments make the work read like a who-dunnit, or in this case a who-didn’t-do-it, that both enlightens the thorny questions around why more than two decades of IT investment have failed to deliver the promised nirvana of close and profitable customer relationships, and offers invaluable pointers on how organisations can finally break through to achieve a new era of customer intelligence.
The wide ranging subject matter is made more manageable by the device of splitting the book into eight chapters, each dealing with one theme, one aspect of the great tectonic shift from industrial to information-based society. The chapter subheadings identify the key transformations: “from Product to Customer”, “from Monologue to Dialogue”and so on.
Though Kelly has a natural facility for articulating theory and capturing these over-arching patterns of change, he has been involved in the real world of customer intelligence too long not to be realistic about the fact that individual organisations are all at different stages of the transformations he describes. He points out that some choose to sit out the changes and some are even “counter revolutionaries” championing established views in the teeth of new ideas and changing technologies.
Despite, or more probably because of, his solid technology background, Kelly is particularly good on dissecting the wrongheaded approaches and false assumptions that have bedevilled efforts to harness new technologies to the aims of business intelligence and direct marketing.
He makes with authority the case that the successful development of customer intelligence is not about technology, but about organisations finding their way to extracting value from the huge stores of data they have, and about identifying the information they actually need. Acknowledging that IT projects seldom provide a quick win, and that the organisational and cultural changes needed to deliver benefits take far more time and commitment, he takes us beyond this truism to the insight that it is the very complexity and difficulty of building an effective information strategy that makes it a source of sustainable competitive advantage, precisely because it is so difficult to replicate.
Kelly originally planned to call the book "The Customer Information Wars" and the battlefield analogy is introduced from the start, and recurs throughout the book. It works well in painting a vivid picture of the way in which different companies have attempted to ride successive waves of technology change, from data warehousing to the dot.com boom, with a few winners and many more casualties in each new assault. Kelly cuts through this fog of war to pinpoint the changing possibilities ushered in by each of his eight big shifts in the customer intelligence landscape.
Classic marketers do not come out of this analysis well, with the philosophies of mass marketing cited as forming one of the barriers to progress. Direct marketers are left no room for complacency either. The charge that direct doesn’t in itself have to mean targeted, segmented or personalised, and that direct marketing has been too often suborned to become another blunt mass marketing channel is hard to deny. Reading this book should give us all a rueful sense of missed opportunities, as the very discipline that pioneered customer dialogue through direct response, that spawned the idea of relationship marketing driven by the power of the database, has repeatedly failed to grasp the opportunity to advance the cause when a new enabling technology comes along. Witness the recent example of the many voices in the DM press lamenting that web and digital marketing have been largely hijacked by those with little or no grounding in sound direct marketing principles.
Kelly’s final conclusion is that the advent of new technologies has finally made possible the original marketing principle of putting the customer at the centre of the business. The paradox is that the mass marketing paradigm is fundamentally product-centric, and has became so embedded in marketing thinking that many organisations are now trying to bend the new tools to the established methodologies.
If the book has a failing it is in the imbalance between the power of the critique of successive failures to exploit customer information effectively, and Kelly’s suggested resolution, a move to putting the relationship in the hands of the customer. This seems at first glance insufficiently heavyweight, insufficiently radical. Yet carried through it would represent a bold return to first principles that few organisations could boast of today.
In truth, no single person can offer the answers to that will unlock the potential of the information age, but this thought provoking work certainly enumerates the key questions. The sheer density of ideas, and the frequency with which targets are hit, makes this an exhilarating read. You know that you are reading a book destined to be read and re-read when you give up underlining individual phrases or sentences that are quotable and start marking a line down the side of whole paragraphs. Every page is packed with those little shocks of recognition at statements which seem obvious - now that you see them written down. Every paragraph seems to deliver another neatly expressed summary of a truth which somewhere at the edge of consciousness you already knew.
In another memorable military analogy Kelly points out that it was not the new technology of the tank that changed the face of warfare in 1939, it was harnessing the full power of the tank to a new “big idea” – Blitzkrieg. The challenge the book poses us is to come up with the big ideas that will fully exploit the information-rich capabilities of digital, interactive and mobile media. Surely the next few years must see direct marketers pick this gauntlet up.
Review first published in the Journal of Direct Data and
Digital Marketing, Volume Seven, Issue Three
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"...an invaluable
compendium of information on the most pressing challenge in
business today"
Sean Kelly
Comhra |
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"At last! Something
on data even an old Luddite like me can understand!"
Drayton Bird |
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"...a really useful resource to understanding all issues relating
to data management"
Prof Derek Holder
Institute of
Direct
Marketing |
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"...a down-to-earth, no-nonsense site designed to cover the
new practices and theory of Information Management"
Simon Lawrence
Information Arts |
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