Customer Centric Knowledge Management

7/31/2019 Customer Centric Knowledge Management

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Customer centric knowledge

managementProf. Chhabi Sinha


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Customer centric knowledge

managementA study by Gartner found that 75 percent ofthe leading companies are incapable ofcreating a unified view of the customer.

Most of the challenges in the organisationalperformance originate from the maintenanceof customer data which include

Lack of data availabilityPoor storage and management

Ineffective sharing and usage


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Types of customer knowledgeDavenport distinguished between severaltypes of customer knowledge

-quantitative ,data driven knowledge found intransactional systems

-Knowledge derived from interactions withpeople including experiential

observations,comments,lessons learnt,qualitative facts etc

-Tacit knowledge which is unstructured anddifficult to express and must be converted to

explicit knowledge


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Customer knowledge

measurementCompanies measure three aspects ofcustomer knowledge

-The value customer knowledgehas(intangible asset measurement)

-The process by which it is produced andconsumed(knowledge management

operations)-The quality of the knowledge or data(dataquality)


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Customer centric knowledgemanagement

Figure 1 depicts a conceptual model of the CRMdevelopment stages.

The stages are determined by the level of IT employed andthe sophistication/integration of the information systemused in the organization.

The higher the level of IT the higher the integration of CRMinto the organization's IT/IS architecture


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The first CRM development stage is the preliminary, non

IT-assisted stage.

Organizations belonging to this stage have a very limitedor not at all use of IT as far as the management of

customer relationships is concerned.

However, these organizations use customer relatedknowledge management instruments and have sometype of a mostly manual customer satisfaction and/ orcomplaining data recording/processing system,indicating, thus, their positive attitude and orientation

towards defensive relationship marketing

First Stage


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Second stage

The second CRM development stage is the IT-assistedCRM, predominately a manual process that uses IT toenhance the company-customer relationship andanalyze customer-related data.

Customer data are mainly collected manually butrecorded and analyzed by using spreadsheets, database

systems and statistical packages.

Organizations belonging to this stage are expectedtoday to have some Internet presence and manage

effectively and efficiently customer satisfaction and


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Third stage

The third CRM development stage is the IT-automated CRM,

which emphasizes customer interaction by using a number oftechnologies, such as the Internet and telephone/computerintegration.

Acquisition of customer profiles, tracking of customer purchase

patterns and trends and interactive service provision have beenmade possible by the advances in IT .

Companies belonging to this stage have active Web presence,

use EDI systems, engage in e-commerce and have implementedERP and operational CRM systems aimed at business processesoptimization and sales force automation.Processing of customer requests and orders and management ofcustomer accounts are expected to be timely and accurate andgenerally at a high level of efficiency.


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Fourth Stage

The fourth CRM development stage is the integrated CRM (i-CRM), leading to customer personalization and high level ofservice and customer satisfaction.

At this stage, companies employ sophisticated CRM informationsystems providing highly integrated back-office, front-office andInternet functions.

Personalization software includes a number of analysis

technologies such as data mining, collaborative filtering and rulesengines .

Supply chain optimization and analytic functions are also

expected at this stage through the use of Web-enabled decision


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This will probably require not only enterprise-widesharing of information so that customer-centricknowledge could be available to every decision

maker inside the organization but also sharing ofrelevant business information with customers andbusiness partners aiming at overall customersatisfaction, processes efficiency and costminimization.


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-divisibility campaign

TESCO , one of Europes largest and most

data-advanced retail chains is one companyknown for proper gathering and application ofin-depth customer information to optimise itscustomer share

Its customer database contains not onlythe demographic and life-style data (including the total dollars spent on fooditems in stores and the customer response

to its promotions and other programs)But also specifics about its customersinterest in,and use of a diverse range ofother food-related services and non-food

products and services


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Case study continued..The company has leveraged on the customerdata drawn from its loyalty programme todiversify into the attractive banking andfinancial services sector.

The loyalty card programme istrackingseveral hundred million instore purchases perday

The company developed 5000 customerneeds segment with each segment receivingthe personalised coupons


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Case study continued..Tesco would create upto 1,50,000 variationsof its promotion and reward statement

mailings each quarter.The result has been tightly targetedmessaging and marketing oppurtunitiesgiving TESCO the ability to address individual

customer requirements by the purchasingsituation.

Its coupon redemption rate is 90 percent

Customer Centric Knowledge Management

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