Daily Research News Online no. 4523 - UK Firms Neglect Customer Knowledge Management

UK Firms Neglect Customer Knowledge Management

September 6 2005

Only 7% of UK companies make efficient use of customer knowledge, according to a new report. The study, from the Centre for Integrated Marketing(CIM) at Luton Business School, rates the practices of more than 200 brands.

The Winning with Customers study was led by Professor Angus Jenkinson from the CIM, who also runs his own marketing consultancy Stepping Stones. It is based on an 18-month study, which involved telephone and face-to-face interviews with senior marketers at 201 companies. The aim of the study was to understand current practices, and provide benchmarks for individual firms.

The report identifies four main factors that contribute to overall 'customer excellence', as follows.

Customer knowledge management - effective processes and systems for customer knowledge capture and distribution.
Living the brand - employee participation in the brand culture.
Marketing organisation - the skills and processes in the marketing function.
Optimising communication - understanding customer groups and managing customers on a lifetime value basis.

The study rates just 7% of the firms interviewed as 'strong' at customer knowledge management, while 60% are classed as 'weak'. It uses British Gas as an example of a company that knows its customers well. The company uses data from its CRM project to help segment customers by value and type. The knowledge is pooled from across the company, and used at every contact point. For example, its mailing programme is heavily segmented, and automated technology in call centres generates individual recommendations for customers.

Only 13% of firms achieve a 'strong' rating for customer excellence overall. The top ten are: