How Customer Intelligence Impacts Customer Loyalty, Wallet Share

(Image: KANOWA/Shutterstock)

(Image: KANOWA/Shutterstock)

Many of today's companies talk about getting a 360-degree view of their customers and how that will enable them to increase share of wallet and improve customer loyalty. As a consumer and an industry observer, I would argue that these "360-degree views" are aspirational at best. Striving for a holistic view of customers is a noble goal and a necessary one; however, achieving customer intelligence nirvana is easier said than done.

"The vast majority of the people we talk to aspire to get a 360-degree view of the customer, but the reality is they may not have closed the circle," said Julio Hernandez, partner, global customer Centre of Excellence Lead and US Customer Advisory Practice Lead at KPMG . "A 360-degree view of the customer is really knowing who the customer is, what they're doing and why they're doing it. It's also bringing in the right information sources, and the information sources are continuously evolving."

Companies should also understand how valuable their customers are and where they are on their journeys. However, truly understanding customers and marketing to them appropriately is still difficult despite all the technology and data that's available now.

Part of the problem is what Hernandez calls "The New Year's Day" problem, which is saying one thing and doing another.

"It goes back to the 360-degree view and having multiple sources of data, combining them, and combining [different] types of analysis to get a better picture of what the customer wants and is doing," said Hernandez. "You have to start with what you're trying to achieve with customer insights. That drives how you harness the analytics and how you look at the data. If you expect to just look at all your data and [get] all the insights in the world, you're going to come up short."

Increasing Share of Wallet

Businesses purchase a lot of third-party data to better understand their customers' economic means, what they're buying and where they're buying it to understand their share of wallet. If they have a loyalty program, they have insight into what their share of wallet looks like.

"You have to make some inferences about what's your share in the marketplace is in different categories," said Hernandez. "You can also triangulate and come up to a number about what I'm actually selling to that person versus the inferred wallet [because] you won't know for sure exactly what their wallet is."

Businesses should also consider the attributes of their best customers and then identify customers who share the same attributes but spend less. That way, the company can intervene with some sort of marketing campaign that encourages the latter group to spend more.

Improving Customer Loyalty

Businesses with loyalty programs get varied results depending on the benefits their programs provide and the degree to which companies leverage that information.

"Loyalty cards are interesting because they're trying to [get] you to clearly state who you are when you're using the card and then they can track your basket and your purchases," said Hernandez. "But you have to step back and ask how do you as an organization define loyalty? Is it someone who stays with you on an ongoing basis? If so, that's great, but if you're a utility and I continue to business with [you], that doesn't necessarily means that I'm loyal. It means I'm lazy or I don't have substitutes."

Money isn't everything. If two customers spend the same amount of money, but one is a brand advocate on social media, the latter is considered more valuable now.

"When you think about loyalty, it's also about what are they're doing with their loyalty," said Hernandez. "Are they engaging with your services? Are they proponents of it? Those are things that help you determine what kind of loyalty you have."

What's Your Take?

How does your company increase its share of wallet? How does it improve loyalty? Are 360-view of customers fact, fiction, or a bit of both? We'd love to hear your opinions in the comments section below.

Lisa Morgan, Freelance Writer

Lisa Morgan is a freelance writer who covers big data and BI for InformationWeek. She has contributed articles, reports, and other types of content to various publications and sites ranging from SD Times to the Economist Intelligent Unit. Frequent areas of coverage include big data, mobility, enterprise software, the cloud, software development, and emerging cultural issues affecting the C-suite.

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Re: Engagement
  • 8/30/2017 1:01:22 PM

Broadway that's exactly the idea once they get someone in the store with the free offer they entice them to spend more. I get lots of those around my birthday with a minimum spend required. While they sound good they are often not that good. I read the fine print. I like the offers with the discounts and some kind of loyalty bonus. They are often best for consumers and keep them coming back coming back to stores!

Re: Engagement
  • 8/29/2017 10:41:06 PM

impactnow, what's most impressive are the companies who can identify you or another consumer as a customer who wants that kind of engagement. Personally, 99% of the time I am going to ignore such contact. I am overwhelmed with garbage email, so forget about connecting with me there. For one retailer whose app I have, they'll connect with me there and offer me, literally, free stuff. But even then, if the offer is not convenient to my schedule at that moment, I will disregard it. They're learning that about me by trying the offer, and I am certain they are also learning that other app users probably will jump at any offer, and also spend another $10 at their store while they're picking up that free offer.

  • 8/29/2017 4:51:14 PM

Sadly too many companies have loyalty programs with little idea on how to use them to leverage their base. So many rarely engage in programs to increase spend and incent loyal customers. The travel industry is losing a lot of ground in this area while some retailers are getting better. I recently had a  retailer offer me a coupon and double points to make a purchase by a specified date. However, other retailers barely communicate with me or engage with me about my purchasing --they loose the opportunity to touch the customer and make an impression leaving their existing base open to defection.

Re: You might need only a 90 degree view
  • 8/27/2017 2:19:03 PM

Broadway, you make a good point about finding the sweet spot between 0 to 360. Companies want everything but want to pay for nothing. Overextending on a campaign is literally overspending unnecessarily.

Re: You might need only a 90 degree view
  • 8/24/2017 11:58:21 PM

360 is a buzz word past its prime. And no, 360 is not even needed. Surely, the smartest companies are finding the sweet spot between 0 and 360 where the least amount of investment and resources pays off with the biggest returns in customer satisfaction and sales, while most other are frustrated with poor talent, poor leadership or both.

Re: Loyalty measures
  • 8/24/2017 10:18:33 PM


Amazon has certainly done a lot to retain my loyalty as a customer. One factor is Amazon's loyalty to me in terms of service and quality assurance. Another is reducing the order quantity back down to $25 for free shipping.


Re: You might need only a 90 degree view
  • 8/24/2017 12:06:58 PM

Excellent example!  Bananas.  Lol.

I think the term, 360-degree view is an oft misused term.  Sounds good, so let's use it.  Never mind we continue to send irrelevant direct mail offering the customer a deal she can't get because she's an existing customer.  Oh, and those five calls to tech support where we had to send a technician out each time?  Boy, our customer service is grrreat!  You only have to wait 30 minutes to talk to a live person too!

Re: You might need only a 90 degree view
  • 8/24/2017 11:15:30 AM

A couple years back, our daughter's school had a crazy party where dozens of people suddenly needed banana costumes. That's right, costumes that you can use to dress up as a human banana. This urgent need happened in November, shortly after the big Halloween costume rush was entirely over.

The local shops were quickly out of banana costumes. After selling the last ones, they received many, many calls wherein the callers asked various questions about banana costumes. Their, not unreasonable, reaction was that these must be prank calls. With this analysis, understandably, they were even a bit rude.

Amazon, with the same information - lots of interest in a very particular item, took a different action. They raised prices on banana costumes and kept filling orders. I'm sure there were many banana costumes shipped in from neighboring states.

Neither supplier had the full 360-view, but one had enough AI to take the proper action.

You might need only a 90 degree view
  • 8/24/2017 9:32:23 AM

Relatively few businesses need that 360-degree view of the customer. Does Amazon really need to consider everything you have purchased/looked at to feed its recommendation engine? Not likely; a lot of what I look up might be only a passing interest for me. Should a brick and mortar retailer know from there loyalty program that you have made a dozen online purchases from them? Absolutely.

However, what seems just as more important as any of that is what a business learns about their entire customer base (or at least customer segments) in terms of trends that are reflected in aggregated data: how we shop, what we like, and what we don't like. The latter is where so many organizations fall down when it comes to understanding customer feelings about product support, store/site layout, sales support, product quality, etc.

Why do companies fail in that aspect of customer loyalty? I suspect that they don't want to know the bad news. Even if they have data about product returns, customer complaints, and abandoned carts, it's easy to place blame elsewhere -- fussy customers, product quality, the weather, lack of parking near a store, individual employees, etc.

If they won't accept or at least acknowledge the bad stuff they are wasting their money on a customer loyalty program.

Re: Loyalty measures
  • 8/24/2017 8:21:58 AM

I think it is also a question of variability in style, etc in a retail enviromonet with multiple employees.

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