Customer data consolidation: the foundation for building more valuable customer relationships
July 30th | 2002 By
Managing customer relationships has come a long way in the lastseveral years. Customer history is tracked more closely and isinterpreted to help predict future behavior; preferences, rangingfrom product preferences to personal interests, are collected; andmessages and offers relevant to an individual customer’s needs aredelivered in a targeted fashion. While there has been much progressin this area, customer expectations have been raised as a result.To meet rising customer expectations, organizations must continueto manage their customer information efficiently and look for waysto effectively use it to meet and exceed customer expectations.
With some companies providing higher levels of personalizedservice, customers now expect that level of service from everycompany with which they interact. It is important to note thatcustomer expectations are not set within the confines of oneindustry. If a customer receives personalized service from theirbank, they’ll notice if their phone company falls short.
In order to meet the increasing expectations of theircustomers, marketers need to ensure that the information that isfeeding their marketing efforts is accurate and complete. Thismeans that all customer information that exists within theorganization must be made available and leveraged when interactingwith a customer.
Companies need to show customers that they are sharing theinformation gathered at each point of contact with the rest of theorganization in order to improve the level of service. Often, inlarge organizations, this information sharing falls apart betweenbusiness units or between business areas. However, customers viewthemselves as having developed a relationship with anorganization’s brand. They do not draw a distinction betweenbuilding a relationship with one business unit, but not another.Therefore, it is necessary for organizations to consolidate theircustomer information so that they know who their existing customersare, what products or services they use, and when they come incontact with company representatives. For instance, a sales repshould know that one of his customers recently called for productsupport, as well as how the issue was internally resolved.
So, how does a Fortune 500 organization with thousands ofemployees and disparate business units begin to address the issueof fragmented customer information?
It is a large undertaking, to be sure. However, anincremental approach can cover a great deal of ground despite thecomplexities of working in such an environment. Developing a planthat approaches the task as a series of steps that begin small andbuild upon each other to gain momentum will limit risk and increasethe chance for success.
A good starting point is to find out what customerinformation exists within the organization. Performing an auditacross all business units and channels will determine what dataexists within the enterprise. This is simply a fact-findingmission. Areas to focus on include what customer information iscollected, where it is stored, who has access to it, and how it isused. This knowledge will provide an understanding of the currentstate, and can feed the development of a strategy for movingforward.
The findings from an audit will also allow marketers todetermine what information is available and what additionalinformation should be captured. Furthermore, analysis of existinginformation will identify how different business units approachcustomer relationships and how valuable customers are treatedcompared to other customers.
With a clearer understanding of the customer base, it ispossible to begin testing how consolidated information can be usedto improve customer relationships. By starting small, such assharing data between only two business units, marketers can testthe backend data integration and programs that make use of theintegrated data. At this point, marketers should focus on using theconsolidated data to target the most valuable customers.
As with any marketing program, it is imperative to puttracking metrics in place to measure the success of the initiative.These metrics will be used to prove the value of consolidatingcustomer data and to gain support from other business units foradditional improvements. Many organizations conduct ongoingcustomer satisfaction and attrition studies that can be leveragedto determine return on investment (ROI) for a customer dataconsolidation effort.
As success is achieved and support within the organizationgrows, additional business units or customer segments can be addedto the mix. Progress should remain incremental and should becontrolled so as not to try to do too much.
As more areas within the organization participate, thecustomer profile will grow in size and value. Programs can then bedesigned that make use of the available information. These programsinclude targeted marketing programs that cross-sell and up-sell, aswell as programs that address customer satisfaction and retention.Consolidated information also opens the door for loyalty programsthat reward customers for building deeper relationships and usingadditional products and services. In addition, better customer datamanagement creates opportunities to improve and coordinate customercare and sales support — sales reps can follow up to ensure that acustomer complaint logged through a call center has been resolved.
In summary, consolidating customer data across theorganization ensures that the most value possible is extracted fromcustomer information collected. This value is delivered in terms ofunderstanding and responding to customer needs. Complete customerinformation is the foundation required to build customerrelationships that will increase customer satisfaction andretention, as well as meet customers’ rising expectations.