FivestylesofCustomerKnowledgeManagement,AndhowsmartcompaniesputthemintoactionMichaelGibbert1,MariusLeibold2,GilbertProbst31UniversityofStGallen,SwitzerlandandINSEAD,France,2UniversityofStellenbosch,SouthAfrica,UniversityofGeneva,Switzerland3E-mail:Michael.Gibbert@unisg.ch,Leibold@mweb.co.za,Gilbert.Probst@hec.unige.chAbstract.Intheaftermathoftheknowledgeeconomy,smartcorporationsbegintorealizethattheproverbial‘ifweonlyknewwhatweknow’alsoincludes‘ifweonlyknewwhatourcustomersknow.’Inthispaper,theauthorsdiscusstheconceptofCustomerKnowledgeManagement(CKM),whichreferstothemanagementofknowledgefromcustomers,i.e.knowledgeresidentincustomers,incontrasttoknowledgeaboutcustomers,e.g.customercharacteristicsandpreferencesprevalentinpreviousworkonknowledgemanagementandcustomerrelationshipmanagement.Subsequently,fivestylesofCKMareproposedandpracticallyillustratedbywayofcorporateexamples.Keywords.KnowledgeManagement,Customerrelationshipmanagement,customerknowledgemanagement,valuecreation.OurcustomersaremoreknowledgeablethanwerealizeIntheemphasisonknowledgeasakeycompetitivefactorintheglobaleconomy,corporationsmaybeoverlookingamajorelement–customerknowledge.Forexample:OldMutual,thelargestinsurancecompanyinSouthAfrica(andaninternationallyexpandingFTSE100quotedcompanyontheLondonStockExchange)hasbeenincorporatingtheknowledgeofpatientsconcerningtheirownhealthconditionandtreatmentdirectlybywayofelectronicmeans,insteadofrelyingonlyonmedicaldoctorstoprovidethis.CustomerknowledgeisbeingusedbyOldMutualbothtoscreenapplicantsformedicalinsuranceandmoreimportantlytodevelopnewmedicalinsuranceproducts.1WhatisthereasonfortheincreasingsuccessofOldMutualinSouthAfricaandinternationally?PartlyduetoaprocesscalledCustomerKnowledgeManagement(CKM).Itworkslikethis:wherepatients’healthevaluationformswerepreviouslycompletedmanuallybytheirdoctors,ithasbeenreplacedbyelectronicformsthatcanbefilledinmainlybypatientsthemselves,fromtheconvenienceoftheirhomes.Patientsstillrequiremedicalexaminationbytheirdoctors,buttheadvantagetoallpartiesarespeed,greateraccuracy(doctorsarenotoriousforpoorhandwriting),moreinformation,andespeciallyadditionalknowledgeinputfrompatientsthemselves.Theissuesofethicsandprofessionalism(e.g.securityofinformation,patient-doctorrelationship)ofcoursehavetobecarefullymanaged,buttheadvantagesofcustomerknowledgeinputoftheircondition,treatment,effectsofparticulardrugs,perceptionofmedicalinsurancecompaniesandtheirproductsaresubstantialandvaluabletopharmaceuticalcompanies,insurancecompanies,doctorsandotherstakeholdersinthehealthmanagementindustry.Doescustomerknowledgemanagementonlyhappeninthepharmaceutical/insuranceindustries?Wethinknot.Overthelastsixyears,wehavestudiedmorethantwo-dozencompanies,andfoundthatsmartcompaniesareprolificcustomerknowledgemanagers(seeinsertAppendixB:‘Ourresearch’).Indeed,mostcompaniestodayconsiderthemselvesasmarketdriven,orcustomer-oriented.Yetonlyafewcompaniesareactuallymanagingwelltheirperhapsmostpreciousresource:theknowledgeof,i.e.residingintheircustomers,asopposedtoknowledgeabouttheircustomers.Ourresearchshowsthatbymanagingtheknowledgeoftheircustomers,corporationsaremorelikelytosenseemergingmarketopportunitiesbeforetheircompetitors,toconstructivelychallengetheestablishedwisdomof“doingthingsaroundhere”,andtomorerapidlycreateeconomicvalueforthecorporation,itsshareholders,andlast,butnotleast,itscustomers.CKMisthestrategicprocessbywhichcuttingedgecompaniesemancipatetheircustomersfrompassiverecipientsofproductsandservices,toempowermentasknowledgepartners.CKMisaboutgaining,sharing,andexpandingtheknowledgeresidingincustomers,tobothcustomerandcorporatebenefit.Itcantaketheformofprosumerism,mutualinnovation,team-basedco-learning,communitiesofpractice,andjointintellectualproperty(IP)2management.WehaveidentifiedtheseasfivestylesofCKM,whicharedistinctivelydifferentpractices,butnotmutuallyexclusive.ExpandingonCRMandKnowledgeManagementAtfirstglance,CKMmayseemjustanothernameforCustomerRelationshipManagement(CRM),orKnowledgeManagement(KM).Butcustomerknowledgemanagersrequireadifferentmindsetalonganumberofkeyvariables(seeTable1).Customerknowledgemanagersfirstandforemostfocusonknowledgefromthecustomer(i.e.knowledgeresidingincustomers),ratherthanfocusingonknowledgeaboutthecustomer,ascharacteristicofcustomerrelationshipmanagement.Inotherwords,smartcompaniesrealizethatcorporatecustomersaremoreknowledgeablethanonemightthink,andconsequentlyseekknowledgethroughdirectinteractionwithcustomers,inadditiontoseekingknowledgeaboutcustomersfromtheirsalesrepresentatives.Similarly,conventionalknowledgemanagerstypicallyfocusonlyontryingtoconvertemployeesfromegoisticknowledgehoardersintoaltruisticknowledgesharers(EisenhardtandGalunic,2000).Incontrast,withCKM‘Ifonlyweknewwhatweknow’turnsinto‘ifonlywealsoknewwhatourcustomersknow.’Table1:CKMversusKnowledgeManagement&CustomerRelationshipManagementKMCRMCKMKnowledgesoughtinEmployee,team,company,networkCustomerDatabaseCustomerexperienceandcreativityAxioms‘ifonlyweknowwhatweknew’‘retentionischeaperthanacquis