Thursday, December 3, 2009


Writing about data has the same effect on me as eating dirt. All I can say is Yuck! Unfortunately the topic needs to be addressed from time to time. The market place today is overflowing with customer satisfaction and customer loyalty data. Millions of dollars (probably billions) are being spent to generate the data. I am sure there are computer databases overflowing with customer data. The problem I would like to discuss is that most companies have lots of data but little information. We have found very efficient ways to generate data and that is where many companies stop. They have computer data bases full of customer data and probably have books of data and charts on multiple desks and book shelves. The problem is not collecting data, the real problem is knowing what to do with it.

Several years ago I had a client who called me and asked me to come visit him. After I arrived at his office and we had a very cordial discussion about the state of his industry, he wondered if I had some time to help him. He had just spent several hundred thousand dollars to gather customer information. He had a box full of 3-ring binders, one for each quarter of the previous year. The books were filled with tabulations of data and some charts. His question to me was very direct and to the point. He asked me tell him what all this data said. In essence, he was overwhelmed with the data but had little idea what information was in the data.

I can assure you that the data was collected by a very reputable research firm and that the data was reliable. I was sure the data was collected using all the proper rules of statistical surveys. The problem was that the data was just that - data. There was no thought given as to how to extract actionable information from the data.

After pouring over the data for about 2 weeks there were several points that I could make; namely, that customer satisfaction was,in fact, increasing each quarter and that his small customers loved his operation and his large customers were ready to leave him. The sad news was that there was not sufficient planning prior to the administration of the survey that would allow him to determine the key indicators that would allow him to improve his operation (particularly with respect to his large customers).

Today, companies have multiple sources of data coming in with little or no idea how to integrate the data into a use able database. Customer intelligence is not restricted to customer satisfaction and loyalty surveys, it also includes sales and marketing data as well as feedback from customer service. The real value comes from developing metrics that assist managers and executives into seeing a more accurate picture of their business. Without that knowledge/vision, companies fall back into relying on experiential knowledge which may no longer be valid in the changing markets of today.

The first data commandment is to invest in analysis and operational metrics if you are going to collect data; otherwise, don't bother collecting the data in the first place.

Some recent polls indicate the following:
1. About 49% of companies believe they have adequate customer metrics,
2. About 46% do not believe they have adequate customer metrics,
3. About 2% do not think have adequate customer metrics is important, and
4. About 3% don't know and think it is not relevant.

The bottom line is that companies need to spend the time (and money) to not only integrate their information into a usable database, they need to allocate resources to building metrics that are meaningful and will assist the decision making processes. If a company wants to spend the time and money to create the data, they must also be willing to invest in converting the data into useful information. I would like to know the condition of the 5% who do not think adequate cusotmer information is important in the next few years.

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