Customer Knowledge Management

Customer Knowledge Management (CKM) has drawn increasing attention through the convergence of both the technology-driven and data-oriented approach in Customer Relations Management (CRM) and the people-oriented approach in Knowledge Management (KM) (Chen & Su, 2006). The earliest origins of the term “customer knowledge management” can be found in articles and books authored by Thomas Davenport in the mid to late 1990s.

CKM has been characterized as an innovative practice of extracting and exploiting two types of customer knowledge, namely knowledge about customers and knowledge from customers (Chen & Su, 2006; Garcia-Murrillo & Annabi, 2002; Rowley, 2002; Davenport, et al., 2001). It is both a practice and a philosophy of fostering, identifying, and transferring tacit and explicit knowledge from the customer to and through a learning organization. It is an important element of the feedback loop that influences innovation and the evolution of market offerings. Recognizing customer knowledge as part of a firm’s knowledge, and then managing this intellectual asset is a source for product development, project management, and business success.

While KM attempts to solve the axiom “if only we knew what we know,” CKM attempts to solve the axiom “if only we knew what they know,” referring to information a customer knows about a business, its competitors, and the marketplace. CKM is comprised of multifaceted business functions, and could include an optimal mix of:
  • marketing,
  • marketing research,
  • marketing information systems,
  • customer profiling,
  • customer analytics,
  • competitive intelligence,
  • business intelligence, and
  • customer relationship management.
Data and information is gathered at the individual customer level, the market segment level and at the level of the business’s overall customer profile, then processed and converted into customer knowledge to fuel organizational learning and change organizational behavior.

Effective CKM requires active customer involvement in the company’s decision-making: learning from customers and understanding their knowledge and product needs by identifying, sorting, and differentiating relative knowledge between customer expectation and customer competence: what customers want and what is critical to their decision-making. It seeks to leverage business-to-customer, customer-to-business, and customer-to-customer communication, and could include any of the following:

Business-to-customer communication to differentiate and separate a business’ products and services from that of a competitor:
  • First-line direct communication at customer service level, including face-to-face, call center, online help, personalized greetings
  • Public relations
  • Advertising campaigns
  • Marketing strategies
  • Espoused values
  • Test marketing

Customer-to-business communication to identify demographics, psychographic and behavioral information as it relates to a business and its competitors:
  • Monitoring sales and service calls
  • Transactional tracking
  • Data mining
  • Data warehousing
  • Environmental scanning
  • Knowledge repositories and databanks
  • Focus groups
  • Surveys
  • Polling
  • Extended discussions and interviews
  • Observation: how customers use the business’s products and services
  • Employees as customers
  • Retailer feedback
  • Mapping
  • Accounting principles
  • ROI measurement

Customer-to-customer communication to monitor, gain insight, and differentiate customer knowledge:
  • Weblogs
  • Chat rooms
  • User conferences, brand events and rallies
  • Discussion forums
  • Online self developing
  • Observation
  • Co-creation toolkits
  • Hidden shoppers
  • Co-learning
  • Customer communities and cultures
  • Remarks and ratings
  • Open-source access to product design and meaning

Challenges to CKM include:
  • capture and codification,
  • translating and transferring tacit knowledge into to explicit knowledge,
  • developing coherent internal KM strategy and resource coordination between a myriad of different business processes, multiple environments, platforms and systems,
  • keeping knowledge current and up-to-date,
  • changing organizational culture,
  • determining how much knowledge to share with customers,
  • customer education,
  • communication to and from customers, as often customers can’t articulate their needs and wants, and
  • data and information is by nature situational, behavioral, and psychological

The result of CKM is a synergy of collaboration and an increase in value for both the customer by way of:
  • superior products and services,
  • customized products and services,
  • personalized experience, and
  • continued customer satisfaction, reducing the “cost” of switching to a different provider.
and the company through:
  • understanding and targeting those customers and prospects who are profitable and sustainable,
  • improving innovation, development and growth of products and services,
  • improving customer experience with the business’s products and services,
  • facilitating customer commitment and loyalty,
  • reducing marketing costs and improved marketing strategies,
  • making customer-centric management decisions,
  • reaching the right customer at the right time,
  • optimizing operations, e.g. reducing operating costs and increasing net profits,
  • identifying new market segments and market directions,
  • providing early warning and competitive intelligence on competitors,
  • translating and extending success in one part of the business to another,
  • effectively managing customers throughout the customer life cycle: customer acquisition, customer growth, customer loyalty, customer retention, and
  • assessing overall performance of the business.

CKM is an integrated approach to business coalescing strategic direction, sensible human and business processes, and an advanced technology infrastructure.

Chen, Y. & Su, C. 2006. A Kano-ckm model for customer knowledge discovery, Total Quality Management, 17(5):589-608.

Davenport, T., Harris, J. & Kohli, A. 2001. How do they know their customers so well?, MIT Sloan Management Review, (Winter): 63-73.

Desouza, K. & Awazu, Y. 2005. What do they know? Business Strategy Review, (Spring): 41-45.

Garcia-Murillo, M. & Annabi, H. 2002. Customer knowledge management, Journal of Operational Research Society, 53: 875-884.

Gebert, H. et al. 2003. Knowledge-enablied customer relationship management: integrating customer relationship management and knowledge management concept, Journal of Knowledge Management, 7(5): 107-12.

Lawer, Chris. Brand development for customer co-creation. Accessed October 20, 2007. Available at

Martin, W. 2001. The role of knowledge content in e-commerce, Journal of Information Science, 27(3): 180-184.

Rowley, J. 2002. Eight questions for customer knowledge management in e-business, Journal of Knowledge Management, 6(5): 500-511.