Hoarding Information Isn't Always the Path to Profits

By Allan Alter  |  Posted 11-07-2006

Hoarding Information Isn't Always the Path to Profits

Companies have boosted IT spending in order to collect more customer data. But they aren't necessarily reaping the benefits of the increased information, because they aren't actually analyzing and using all that data. Some customer initiatives are succeeding, such as collecting and sharing customer feedback, and creating a consistent customer experience. Companies are also utilizing customer information from their loyalty programs. But activities that depend on high-quality, well-integrated data still aren't meeting expectations, and the old goal of a "single view of the customer" seems further from realization than ever.

Companies can obtain more satisfactory results by improving alignment between IT and the sales and marketing functions, analyzing more of the data they collect and—most of all—improving their data analysis. Simply stockpiling data isn't enough; companies need to make better sense of it.

For more data and analysis, see CIO Insight's Research Center blog at go.cioinsight.com/researchcentral

Next page: More IT spending is directed to customers.

More IT spending is

directed to customers.">
Finding 3: More IT spending is directed to customers. Listening to customers, providing accurate information and personalization are the most useful ways to spend it.
This year's survey finds there's been a large jump in the IT budget going to customers. The reason: Companies are attempting more ways to engage and sell to customers. The interesting news is that the best and fastest-growing way to do that is to simply listen to customers. The good news is that the 12 techniques we asked about meet expectations at most companies, with the exception of creating a single view of the customer.

Next page: Companies are still suffering from data indigestion.

Companies are still suffering

from data indigestion.">
Finding 4: Companies are still suffering from data indigestion. Customer data is growing by 51 percent, but companies struggle to use it all.
There's been little progress in analyzing and using data: about the same percentage of customer data is used as last year. This difficulty with analyzing data is also what keeps companies from obtaining and then taking advantage a single view of the customer. An exception is data from customer loyalty programs: about 70 percent of this data is put to good use.



Research Guide:

  • Finding 1: The hunt is on for new customers; most companies continue to favor growth over cost-cutting.
  • Finding 2: Nine out of 10 companies sell on the Web, but only half say the Internet is among their most profitable channels.
  • Finding 3: More IT spending is directed to customers.
  • Finding 4: Companies are still suffering from data indigestion.

    Upcoming results from the Customer Strategies survey:

  • Nov. 15: Sales and marketing technologies are often not deployed and frequently fall short when they are.
  • Nov. 22: Customer service products linger despite IT support.

    Read our previous surveys on customer strategies and related topics:

  • July 2005 Customer Strategies Survey: Can You Profit as Customers Get Smarter?
  • October 2005 Business Intelligence Survey: Business Intelligence Is Valuable, but Falls Short of Its Potential
  • August 2004 CRM Survey: Will Old Problems Sink New Users?
  • September 2003 E-Business Survey: Is E-Business Finally Starting to Deliver?

    Related expert voices:

  • CK Prahalad & Venkat Ramaswamy on CRM
  • Gary Hamel on Thinking about the Customer

    Related case studies:

  • Loyalty Programs: How 4 Companies Foster Loyalty
  • Continental Airline's Tech Strategy Takes Off
  • Morgan Stanley: Trading Sideways
  • Pipemaker Learns a Hard Lesson in Customer Profitability
  • Coldwater Creek: Using One Retail Channel to Fund Another
  • Harrah's Entertainment Inc.: Make Every Customer More Profitable

    Related trend stories:

  • Megachurch Megatech: Using IT to Spread the Word
  • Individual Knowledge Doesn't Always Help Understand Customer Groups
  • Cross-Selling at Cross-Purposes