What is “Customer Intelligence?” As the use of technology has mushroomed over the last ten years and the industry has matured, there’s been a lot of confusion around this and similar terms (customer knowledge, customer relationship management, customer-centricity and so on), with many people using different terms to mean the same thing, or the same term to mean different things. So I’d like to provide a simple definition:

Customer intelligence (CI) is the creation of insights into your customers and prospects, and the continuous and systematic use of those insights throughout the organization to drive measurable business results.

There are a few important elements of this definition that are worth noting:

• CI involves the creation of insights, not mere reporting of statistics. It’s not good enough to generate reams of data, or to know just how many customers you have who bought a particular product. The data need to be turned into informative insights that imply a value-added analysis conducted on the raw data. Without insight, you’ve got just a pile of data.

• CI speaks to both customers and prospects, and even farther up the sales funnel to suspects. Good CI will tell you something valuable not just about your current customers, but about your future customers as well, telling you where to look for the most profitable future relationships.

• CI is continuous and systematic. That means you can’t just create an insight into a particular problem once and be done with it, you have to keep doing it continuously – CI is a way of doing business, a method of looking at the world of your customers and prospects, and not just a one-shot deal; you have to be generating and using customer insights all the time. It is also a well-defined process – it is not driven by hunches or by “shoot-from-the-hip” instincts, it is a consistent set of rules applied to data to generate insights. Of course, these rules will change over time and will become more robust as you learn more about your customers, but without some systematic methodology for generating insights, you can’t efficiently begin to incorporate CI into the fabric of your business.

• CI should be implemented throughout your business, not just in marketing or sales. Finance, operations, customer service, research and product development – all of the different functional areas of your business need to be informed by CI so that the entire organization is aligned towards the customer and all can move together, frictionless, to creating the maximum value both for the customer and for the organization.

• Finally, the use of CI should generate measurable business results. “Measurable” and “results” are key words here: you need to be able to measure the effect of your CI efforts against a variety of quantitative goals (increasing profitability, retention, number of products or services, length-of-time customer, and so on), and there need to be results to measure! CI is more than just analysis – it must be actionable, and it must be acted upon to create real results for the business.

In my next post, I’ll go over some example of CI and how it can be used in your business.