Meet Terry O'Connor, sales representative for a large manufacturer based in
Terry is on the go and travels extensively for work and pleasure. She's well connected to the world around her, can be seen "wearing" a cell phone or hunched over her laptop while waiting for a flight. She commands an above-average salary and excellent discretionary spending power. When buying goods and services, she places a high priority on value, service and convenience.
If you ask Terry what earns her loyalty, she'd have a tough time articulating a quick answer. Sure, consistent high quality and prompt, personal service are important. But she also desires something more: a conviction that the companies on the receiving end of her dollars really know who she is.
For most people, time has become an increasingly precious commodity. To put it bluntly, most simply have no time for purveyors of goods and services, especially those who can't get it right the first time, who waste their time with irrelevant, redundant and erroneous messages.
Not surprisingly, a lot of companies would love to earn Terry's long-term patronage. This article takes a closer look at one such enterprise, which we'll call Advanced Micro Computer Company (AMCC) and how it reconnects with Terry after selling her a PC five years ago.
Can AMCC succeed in its efforts to build a profitable, ongoing relationship with Terry? Before answering this question, let's first explore the issue of why businesses have difficulty seeing their customers clearly, anticipating the needs of their customers and getting it right the first time.
CRM Technology: Enabler or Impediment?
We live in a world where the "one-to-one customer relationship" has become the holy grail of marketers. It seems logical then, that companies can access the tools to make it happen. One technology, customer relationship management (CRM), has actually made the task both easier and more difficult.
On one hand, CRM technology enables businesses to acquire an unprecedented wealth of customer data, everything from name and address basics to advanced demographic intelligence the "grist" for building one-to-one relationships. On the other hand, this information often exists in a highly fragmented state.
With the deployment of sophisticated multichannel CRM systems, consumers are interacting with companies in new and often innovative ways, whether they're requesting product information, making purchases, registering for awards programs, checking on order status or initiating service calls.
Think about all the channels through which today's companies can glean new information about their customers:
Customer data can exist in several places (often called "silos" of data). In fact, some companies admit to having as many as 50 to 150 systems that contain customer data.
The difficulty comes in trying to consolidate these silos of data to create unified customer profiles. Too often, a company's various data systems may contain multiple records for the same individual. Some companies report uncovering duplication as high as 30 to 40%. In most cases, these duplicate records contain data disparities variations in name, address, phone number and other essential information.
Who can be sure which customer record, if any, is correct? Factors such as human error, incomplete data entry and a high mobility rate (an estimated 17% among consumers) creates additional barriers to forming an accurate, single-customer view.
If all of that isn't daunting enough, you have mergers, acquisitions and companies partnering with each other on marketing campaigns. More sources of consumer data coming together. More potential for duplication of the same customer. And there is no easy way to determine which information is correct an enormous cost to business.
Poor data quality, as a result of this fragmentation, costs companies plenty. One industry expert contends that bad data translates to lost revenue and ultimately as much as a 10 to 20% hit to the bottom line. What's more, up to 50% of an IT department's budget may be consumed with correcting errors caused by bad data.
For mailers, the consequences are measurable and significant. Customers receive duplicate mailings or no mailing at all. Consider the effects of a 10 to 40% duplication rate on your printing and postage costs (with costs expected to rise again in 2002). Next, think about the impact on customer relationships. What does it say about your company, your products or services? How much does it diminish long-term customer satisfaction?
For some answers, let's return to the story of Terry O'Connor, the West Coast sales representative and her experience with AMCC. As mentioned earlier, she purchased a PC from the company five years ago.
One day, Terry receives a solicitation offering her a deep discount on AMCC's latest, most powerful PC, the Super XP. The mailpiece is addressed to "Teresa Pfeiffer O'Connor" at her home address. Terry likes what she sees, and the following chain of events unfolds:
Terry uses her office PC and the "contact us" button on AMCC's Web site to request a faxed product spec sheet. She signs her message, "Terry P. O'Connor." Terry reviews the spec sheet and then calls the company's toll-free number to place an order, requesting shipment to her office.
A week later, Terry's daughter, Amanda, is using the new computer when suddenly it crashes. Mom is traveling on the road, so Amanda calls AMCC's customer support number. After obtaining Amanda's name and the computer model and serial number, the technician tries unsuccessfully to solve the technical problems, so he suggests a visit to the company's local retail store.
Amanda and her dad, Bob O'Connor, go to the retail store, where they get the PC fixed. Using his credit card, Bob also purchases an extended warranty.
Many Channels, Many Pitfalls. What just happened? AMCC started out knowing only Terry in fact, just her home address and phone number. Over the span of two weeks, this one-dimensional view expanded through several interactions, not just with Terry but with her daughter and husband.
With each interaction, the company captured new information (Terry's work address, e-mail address and fax number plus Amanda's name and her husband's name and credit card number). Along the way, the company also obtained inconsistent data: for example, "Terry P. O'Connor" versus "Teresa Pfeiffer O'Connor."
Unless this data is enhanced and consolidated into a single customer profile, AMCC will, at minimum, sacrifice efficiencies and dollars in its ongoing communications with Terry and her family. At worst, it risks alienating, and possibly losing, a valued customer. Here are some of the possible consequences, along with examples specific to this story:
Duplicate promotional mailings the mailing is sent to two different addresses and as many as three individuals in the same household.
Misdirected outbound telemarketing a call to Amanda asking her to sign up for Internet service (with one of AMCC's marketing partners), even though she is not the head of household.
Gender confusion AMCC does not know whether Terry is a female or a male.
Misidentification on inbound calls not finding the customer record because it exists under a different name and/or address. ·
Irrelevant offers sending Terry a solicitation for the already-purchased extended warranty.
Missed opportunities not offering the O'Connors a "Family Fun" software bundle or a "Preferred Customer" discount on a second computer for the household.
Achieving the Single View
AMCC, being a progressive enterprise, has considered the impact of fragmented and inconsistent data. If the company wants to maintain a loyal customer base in a highly competitive marketplace, it simply has no choice.
By initiating aggressive data quality programs, AMCC looks at all the points where customer information originates (e.g., rented mailing lists, order entry, call centers, retail store visits) and where it is then stored (legacy databases, departmental databases, external data warehouses and other systems).
Next, AMCC deploys data quality software that extracts customer data from wherever it exists and increases the value of this data in several key ways:
Data Enhancement
Matching and Consolidation
The end result: a single customer view containing data that is accurate, consistently organized and enhanced with valuable business intelligence. This consolidated profile is accessible to anyone in the enterprise who has contact with the customer. The organization benefits in many ways, from launching precisely targeted mail campaigns to maintaining relevant, personal contacts with customers on an ongoing basis.
Laying a foundation for lifelong loyalty: Here are a few examples of how AMCC uses this single customer view to build a mutually satisfying relationship with Terry and her family:
Marketing and Promotion
Terry receives future promotional mailings through her preferred channel in this case, her home address. In addition, the company creates highly customized offers based on what it knows about Terry, her demographics and household as well as her transactional history. Terry may even receive an e-mail, which links her to a completely personalized Web catalog containing only products that address her specific needs. No longer is she bombarded with irrelevant promotions.
Order Fulfillment
For future orders placed by phone, the ordering representative knows that Terry prefers shipments to her office. The representative already has Terry's office address information, saving time and reducing the potential for rekeying errors. (The same process could happen with an online transaction.) Terry is impressed with how quickly her order is received and processed.
Customer Care
A few days after Bob and Amanda's visit to the retail store, Terry receives a call (or personally signed e-mail) from the home office's customer care department. The representative asks how the computer is working and, before Terry can register any dissatisfaction, offers her a free memory upgrade. Wow! Talk about taking care of your best customers!
Equipped with streamlined, singular views of its customers, the company can develop individualized promotional campaigns and product/service solutions. For example, once her computer reaches a certain age, Terry receives a mailing for the next generation PC along with an invitation for a "test drive" at the local retail store. The company actually anticipates Terry's needs and makes it easy for her to do business with them.
Never a Greater Need Than Now Savvy executives have long recognized that economic downturns represent an excellent opportunity to increase market share through aggressive advertising and, just as important, to strengthen relationships with the customers they already have.
Now more than ever, businesses are discovering the value of quality data and the single-customer view. With data enhancement and consolidation tools, they can hold the line on costs while attracting prospects with highly targeted promotions, converting those new prospects into current customers and establishing an unprecedented degree of long-term customer loyalty.
Hank Martin is the senior product manager at Firstlogic, Inc., the leading global provider of informational enterprise-wide quality tools. For more information, please contact Hank Martin at 888-215-6442 or you can e-mail him at hankm@firstlogic.com.
