The question of how best to analyze and use individual customer data presents special problems. In the current big data era, most companies are awash in information about their customers and the marketplace. Still, smart companies capture information at every possible ­customer touch point. These touch points include customer purchases, sales force contacts, service and support calls, web and social media site visits, satisfaction surveys, credit and payment interactions, market research studies—every contact between a customer and a company.

Unfortunately, this information is usually scattered widely across the organization or buried deep in separate company databases. To overcome such problems, many companies are now turning to customer relationship management (CRM) to manage detailed information about individual customers and carefully manage customer touch points to maximize customer loyalty.

CRM consists of sophisticated software and analysis tools from companies such as Salesforce.com, Oracle, Microsoft, and SAS that integrate customer and marketplace information from all sources, analyze it, and apply the results to build stronger customer relationships. CRM integrates everything that a company’s sales, service, and marketing teams know about individual customers, providing a 360-degree view of the customer relationship. For example, MetLife recently developed a CRM system that it calls “The MetLife Wall”:20

One of the biggest customer service challenges for MetLife’s sales and service reps used to be quickly finding and getting to customer information—different records, transactions, and interactions stored in dozens of different company data locations and formats. The MetLife Wall solves that problem. The Wall uses a Facebook-like interface to serve up a consolidated view of each MetLife customer’s service experience. The innovative CRM system draws customer data from 70 different MetLife systems containing 45 million customer agreements and 140 million transactions. It puts all of a given customer’s information and related links into a single record on a single screen, updated in near real time. Now, thanks to The MetLife Wall—with only a single click instead of the 40 clicks it used to take—sales and service reps can see a complete view of a given customer’s various policies, transactions, and claims filed and paid along with a history of all the interactions the customer has had with MetLife across the company’s many touch points, all on a simple timeline. The Wall has given a big boost to MetLife’s customer service and cross-selling efforts. According to a MetLife marketing executive, it’s also had “a huge impact on customer satisfaction.”

By using CRM to understand customers better, companies can provide higher levels of customer service and develop deeper customer relationships. They can use CRM to pinpoint high-value customers, target them more effectively, cross-sell the company’s products, and create offers tailored to specific customer requirements.

As noted at the start of the chapter, today’s big data can yield big results. But simply collecting and storing huge amounts of data has little value. Marketers must sift through the mountains of data to mine the gems—the bits that yield customer insights. As one marketing executive puts it, “It’s actually [about getting] big insights from big data. It’s throwing away 99.999 percent of that data to find things that are actionable.” Says another data expert, “right data trumps big data.”21 That’s the job of marketing analytics.

Marketing analytics consists of the analysis tools, technologies, and processes by which marketers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance.22 Marketers apply marketing analytics to the large and complex sets of data they collect from web, mobile, and social media tracking; customer transactions and engagements; and other big data sources. For example, Netflix maintains a bulging customer database and uses sophisticated marketing analytics to gain insights, which it then uses to fuel recommendations to subscribers, decide what programming to offer, and even develop its own exclusive content in the quest to serve its customers better (see Real Marketing 4.2).

Another good example of marketing analytics in action comes from food products giant Kraft, whose classic brands—from JELL-O, Miracle Whip, and Kraft Macaroni and Cheese to Oscar Mayer, Philadelphia Cream Cheese, Lunchables, and Planters nuts—are found in 98 percent of all North American households:23

Kraft has a treasure trove of marketing data, gathered from years of interactions with customers and from its social media monitoring hub called Looking Glass. Looking Glass tracks consumer trends, competitor activities, and more than 100,000 brand-related conversations daily in social media and on blogs. Kraft also reaps data from customer interactions with its Kraft Food & Family magazine, email communications, and the more than 100 web and social media sites that serve its large brand portfolio. In all, Kraft has 18 years’ worth of customer data across 22,000 different attributes.

Kraft applies high-level marketing analytics to this wealth of data to mine nuggets of customer insight. Then it uses these insights to shape big data–driven marketing strategies and tactics, from developing new products to creating more focused and personalized web, mobile, and social media content. For example, Kraft’s analytics have identified more than 500 custom target segments. Within these segments, Kraft knows in detail what consumers need and like. Says one analyst, it knows “their dietary [characteristics and] restrictions—gluten free, a diabetic, low calorie, big snacks, feeding a big family, whether they are new cooks.” Kraft uses this knowledge to personalize digital interactions with individual customers, down to the fine details. “If Kraft knows you’re not a bacon user,” says the analyst, “you will never be served a bacon ad.” Thus, sophisticated analytics let Kraft target the right customer with the right message in the right medium at the right moment.

The benefits of customer relationship management and big data analytics don’t come without costs or risks. The most common mistake is to view CRM and marketing analytics as technology processes only. Or they get buried in the big data details and miss the big picture.24 Yet technology alone cannot build profitable customer relationships. Companies can’t improve customer relationships by simply installing some new software. Instead, marketers should start with the fundamentals of managing customer relationships and then employ high-tech data and analytics solutions. They should focus first on the R—it’s the relationship that CRM is all about.

Marketing information has no value until it is used to make better marketing decisions. Thus, the marketing information system must make information readily available to managers and others who need it, when they need it. In some cases, this means providing managers with regular performance reports, intelligence updates, and reports on the results of research studies.

But marketing managers may also need access to nonroutine information for special situations and on-the-spot decisions. For example, a sales manager having trouble with a large customer may want a summary of the account’s sales and profitability over the past year. Or a brand manager may want to get a sense of the amount of the social media buzz surrounding the recent launch of a new product. These days, therefore, information distribution involves making information available in a timely, user-friendly way.

Many firms use company intranet and internal CRM systems to facilitate this process. These systems provide ready access to research and intelligence information, customer transaction and experience information, shared reports and documents, and more. For example, the CRM system at phone and online gift retailer 1-800-Flowers.com gives customer-facing employees real-time access to customer information. When a repeat customer calls, the system immediately pulls up data on previous transactions and other contacts, helping reps make the customer’s experience easier and more relevant. For instance, if a customer usually buys tulips for his wife, the rep can talk about the best tulip selections and related gifts. Such connections result in greater customer satisfaction and loyalty and greater sales for the company. “We can do it in real time,” says a 1-800-Flowers.com executive, “and it enhances the customer experience.”25

In addition, companies are increasingly allowing key customers and value-network members to access account, product, and other data on demand through extranets. Suppliers, customers, resellers, and select other network members may access a company’s extranet to update their accounts, arrange purchases, and check orders against inventories to improve customer service. For example, online shoes and accessories retailer Zappos considers suppliers to be “part of the Zappos family” and a key component in its quest to deliver “WOW” through great customer service. So it treats suppliers as valued partners, including sharing information with them. Through its ZUUL extranet (Zappos Unified User Login), thousands of suppliers are given full access to brand-related Zappos’s inventory levels, sales figures, and even profitability. Suppliers can also use ZUUL to interact with the Zappos creative team and to enter suggested orders for Zappos buyers to approve.26

Thanks to modern technology, today’s marketing managers can gain direct access to a company’s information system at any time and from virtually anywhere. They can tap into the system from a home office, customer location, airport, or the local Starbucks—anyplace they can connect on a laptop, tablet, or smartphone. Such systems allow managers to get the information they need directly and quickly and tailor it to their own needs.