Customer Innovation Centres prove ROI

by Jackie Zack

High-performance organizations typically excel at four major activities: increasing profits by cross-selling and up-selling, developing strong customer loyalty, differentiating service based on customer value and mastering channel complexity.

Neil Miller

These activities do, of course, form the basis for good customer relationship management in any organization. But "the point is, high-performance organizations execute well in those areas, consistently," explains Neil Miller, partner in the Customer Insight team for Accenture, a global management consulting, technology services and outsourcing company. "The foundation for success in these areas is having complete and accurate customer data, then analyzing that data to develop a really good understanding of customer needs and preferences. That insight generates intelligent interactions with the customers."

Of course, the time, effort and cost required to achieve this goal in today's fast-moving, highly competitive environment is not simple. The key challenge, then, becomes how to create an insight-driven marketing organization quickly, while minimizing cost and risk. That line of thinking, in a nutshell, is the philosophy behind the Accenture Customer Innovation Centres (CICs)-part of a network of more than 40 delivery centers around the world.

In 2000, Accenture established the first CIC in Minneapolis with an underlying Teradata architecture and skilled professionals in customer data management, advanced customer analytics and marketing campaign management. These facilities service prominent clients across the globe with impressive results, including documented revenue increases of up to 10%; customer churn reductions of up to 20%; and campaign cycle-time reductions of up to 50%.

Building on this success, Accenture launched the London-based European CIC in December 2003 to serve clients across Europe.

"Accenture has been doing insight-driven marketing projects for a number of years," says David Pardoe, manager for Accenture's Customer Insight practice. "The idea of the Customer Innovation Centres is to bring together this experience and the assets we have created to help our clients deliver greater value faster."

The purpose of the CICs is to provide an environment where the customer management (CM) business proposition is tested and validated for specific clients, demonstrating the ROI of the proposed Customer Insight solution. The solution can then be run and managed by Accenture on behalf of the client or transferred back to the client for ongoing management. Andy FitzGerald, Teradata Strategic Partner Manager for the Teradata and Accenture alliance in Northern Europe, describes it as an opportunity for prospective clients to "prove the value."

"The object of the exercise is to provide a fact-based business case clearly demonstrating the ROI," he says. "What it proves for clients is not just that the technology works ... but that incremental value can be captured using the integrated Customer Insight approach and thus validating the business case."

The CIC initiative, including the creation of the London facility, is a joint venture between Accenture and Teradata that came about through a number of shared accounts. "Teradata provided the data warehouse and a lot of the technology for the centre. Accenture provided a permanent staff to manage the centre," says FitzGerald. "It's a dedicated, high-quality environment in which to learn about the business benefits of Teradata solutions for your organization."

Miller says that a typical project involves defining the business value opportunity with the client, taking extracts of the client's data, cleansing and matching the data and then loading the data into the Teradata Warehouse to create a specific data model for that client. The data is then profiled, segmented and used to create predictive models for targeted marketing. In addition to using the Teradata database and analysis software, Accenture works with other best-of-breed vendors in the UK CIC.

"So it might be a cross-sell opportunity or an acquisition opportunity or an up-sell opportunity or an anti-churn opportunity," explains Miller. "We work with the client organization to define and execute those campaigns using the data we've loaded into the data warehouse. Then we work with them through the modeling and segmentation process, create predictive models and execute the campaigns through the client's organization."

This process is repeated numerous times over several months, ultimately creating an objective view of the business value being created. According to Pardoe, the key behind customer insight and insight-driven marketing is predictive analytics-using customer data to predict the likelihood of certain behavior and then building analytical models based on that.

"That is a key part of what we are doing," he notes. "It's not just about data warehousing or building a database. It's about using that data intelligently and using analytical techniques to enable the benefits of that data to be realized by our clients. Teradata provides an environment that makes that very easy for us to do."

The Accenture CICs work with clients worldwide and across all industries, including insurance companies, government agencies, financial services and retail. "It isn't restricted to particular markets," says Pardoe. "For example, just last week we worked with clients ranging from the Royal Shakespeare Company (RSC) to a leading financial institute, and from a major airline to a global high technology manufacturer."

The RSC project developed a customer insight-driven marketing campaign based on information from the company's ticketing database.

"We have defined a number of characteristics relating to customers that can be derived from the database and the pattern of performances they go to," Pardoe explains. The process identified everything from a "super-regular" segment consisting of customers who attend a high number of RSC performances to customers who patronize more than one theatre or type of performance. Such segmentation allowed RSC to test insight-driven marketing activities to foster a feeling of loyalty.

Working with a variety of clients and projects in different industries has enabled the CICs to continue to accelerate CM knowledge evolution on multiple business levels. "The knowledge and experience gained from working with different clients allows the CICs to leverage that experience and our methodology and reuse it across multiple clients," explains Miller.

Looking ahead, Accenture will continue to engage different types of clients, and Teradata will continue to play an important role in the evolution of Customer Insight and CRM solutions. Accenture has already established a CIC in Bangladore, India, and will continue to develop the CIC network throughout Europe. T

Jackie Zack's business and technical articles have appeared in various trade journals.

© Teradata Magazine-September 2004