Value justification of moving to a Single Client View

There has been a lot of discussion on the benefits of moving from a traditional "product" or "silo" view to a view across all interactions and transactions for a single customer. Everyone "knows" there are benefits but there are little information on the categorisation and quantification of these benefits.

Julian Ardagh, CEO of Effective Intelligence and his team collated the typical benefits from a number of sources and industries to assist with the value justification of moving to a Single Client View (SCV).

The actual figures mentioned are considered realistic averages based on information and discussions with clients as well as Effective Intelligence's own modelling sensitivity analysis. The exact benefits will vary depending on your industry and so the following benefits are provided as guidelines for you to develop your own model.

Looking at the benefits in achieving a SCV, one should consider the benefits in a minimum of four distinct categories: Acquisition phase for prospective new customers, initial phase for new customers brought on board, established customer phase which includes cross-sell and upsell campaigns and lapsed customers.

Each of these phases can be further defined into sub-categories as required. To establish the expected ROI, a model containing key metrics - along with the associated revenue and costs - needs to be built, that will allow what-if modelling analysis for different scenarios. Once this is done the outcome of the scenarios can be evaluated to establish if there is sufficient justification to formalise planning for a move to a SCV. It goes without saying that data quality is a critical underlying requirement of any SCV project.

During the acquisition phase the prospect data is consolidated into one database, as opposed to the usage of batches from different prospect sources. This enables cost-effective contact data maintenance and updates and multiple usage of the cost of any data enhancements or credit scoring used to improve targeting and reduce risk, thereby reducing the average cost.

During the initial customer phase the on-boarding of customers is typically a challenging and opportunistic period. The service aspects are critical in ensuring that all customer interactions are timely and correct and there is a significant scope to learn about customer requirements and service quality levels. If each department or "silo" in a business with large volumes of prospect promotions is permitted to deal with customers on their own, the risk increases that a customer may cancel before contracting or paying for a new product. The benefit of a SCV lies with the increase in revenue (between 1% and 3% of gross revenue) by reducing the risk of cancellations or non-payment for products purchases.

The potential to upsell and cross-sell is one of the most critical and well appreciated revenue opportunities and it's during the mature customer phase that the company should have a system to recognise and recommend the "next best offer" to any customer during any interaction or promotion. The lack of such a system requires the use of better trained and more experienced operators to overcome the system deficiency and is therefore more expensive. A SCV improves the analysis and modelling when all data is held in a SCV, perhaps yielding an additional 3% to 15% in profitability. A SCV further increases up-sell and cross-sell that promotes higher revenue and prevents cancellation of existing products where the customer information is accurate and the customer does not wish to take further products.

Moving to a SCV will identify potential customers lapsing and may more profitably be retained. A SCV will identify the different profiles in the lapsing customer phase and the benefit is linked to loyalty value assessment and is estimated at between 3% and 10% of gross revenue.

The potential of a SCV varies by client or company from a minimum of approximately 5% additional revenue up to stated increases of 30%. Effective Intelligence recommends if the cost of moving to a SCV model is less than 5% of your revenue then there appears to be a strong case to formalise and consider such a project seriously.