InformationWeek

A new venture with America Online in which customers can use AAdvantage miles as online currency will increase what American knows. While Crandall won't discuss the analysis American does on that data, she says it gives the company insights that help it identify profitable customers and tailor products--such as tour packages--to them.

Still, Crandall says, nothing beats simply asking the customer: "In most cases, our first choice is to have customers tell us what they like." Crandall says American Airlines asks customers about their ideal destinations, activities, and service preferences in surveys and opt-in E-mail campaigns. That way, she says, there's less mistaking whether the customer will be interested in a promotion or not.

Other companies disagree, insisting that the best ways to collect information are those that require little effort from customers. Brodbeck Enterprises Inc., which owns a chain of supermarkets in Wisconsin and Illinois, has been piloting a frequent customer club in its Dick's Supermarkets stores. When customers check out at the cash register, the clerk scans their cards, and all their transactions are stored in a customer database. That data is then analyzed by Customer Expert, retail analysis software sold by DataSage to RMS Inc.

Brodbeck, in Platteville, Wis., will use the data to address product demand and understand its customers' behavior. If, for instance, a family stops buying cereal at Dick's, the system will see that and send cereal manufacturers' coupons to them. It will also reward profitable, loyal customers and improve the store's margins--it could determine what brands a customer is buying, for instance, then provide coupons for more expensive brands. Still, while Brodbeck VP of marketing Ken Robb says the club is a great way to track a customer's interactions with the company, it isn't as good at giving a complete picture of the customer. "The problem with purchase information is that we're not the only ones that sell goods," he says. "The picture you get of a customer is incomplete."

Another challenge facing companies as they try to create a 360-degree picture of the customer is putting all the data they collect--and there can be a lot of it--in one place. Until 18 months ago, USA Group Inc., an Indianapolis guarantor of student loans, had the bulk of its customers, which include students, universities, and loan companies, contacting the company through call centers--17 of them, with 48 phone numbers to reach the centers. When customers called the wrong center--for instance, a student calling a number reserved for loan companies--representatives couldn't transfer the caller to the right number, even though it was in the same building. And a rep using one database couldn't tell a customer about another product residing in another database.

USA Group has changed all that by building a consolidated call center that accesses all its databases. When a customer-service rep queries a customer's records, the system pulls the data from all the databases holding information about that customer. "It provides a single view of the customer across all of the systems," says USA Group CIO Greg Clancy. It's also reduced the company's call-center phone numbers to two.

Mitsubishi Motors Sales of America Inc. had its customer data sprinkled across 20 databases in different parts of its business--a little in the dealer database, a little in the call-center database, a little in the sales database, a little in the warranty database. If one division of the Cypress, Calif., company talked to a customer, the other divisions had no way of knowing what had just happened. That gave the company a limited view of its customers. "Right now, it's difficult for us to see whether the customer has bought one vehicle or 15," says Greg Stahl, Mitsubishi Motor Sales of America's manager of E-commerce initiatives and director of retail development.

Mitsubishi is installing front-office software from Epiphany Inc. to act as a central customer-data hub, where Mitsubishi can track customer interactions, analyze them, and initiate marketing campaigns that draw from that data. "It allows us to treat the customer as the asset, not the vehicle as the asset," Stahl says. While the company hasn't decided what exactly it will do with its analytical capabilities, Stahl says it will use Epiphany to determine which customers are loyal, and reward them with better deals on cars and financing. It could also use the software to analyze personality traits, such as a love for outdoor sports, that would help it sell specific products, such as sport-utility vehicles.

Not everyone is convinced of the efficiency of the 360-degree effort. "The 360-degree customer is a fallacy," says Tim Guleri, CEO of CRM software vendor Octane Software Inc. "It assumes you can understand everything about your customer, and you can't."

Guleri may be right. But any understanding is valuable, and more usually means better. "It's ambitious and impractical," says Hage of 1-800-Flowers' efforts get a complete picture of its customers. "But for me to do the best the job possible serving customers, I have to know them as well as I know my friends."

Read more about the empowerment of the consumer in this week's feature, "Consumer Centricity" by C.K. Prahalad, Venkatram Ramaswamy and M.S. Krishnan