Five ways managing customer data can benefit your business
It's simply good business to know how many customers you have, who they are, and the current and future value they represent to your organisation. Accurate customer data is the cornerstone of any business, yet few companies actively keep their customer data current and relevant. Companies must look to the benefits of customer data management.
Most companies store customer data haphazardly across the organisation in departmental silos, so that obtaining an enterprise-wide customer view becomes almost impossible. Solutions that were supposed to help, such as CRM, have left many companies frustrated with inconsistent and unreliable customer data, the fundamental problem being that much of the data companies gather is useless.
No matter what business you are in, managers need to be able to rely on their customer data and use it for both operational and business planning purposes. A trusted customer infrastructure can provide the highly sought after 360-degree view of the customer, which will in turn enable organisations to understand customer behaviour and customer preferences. It also means you can talk to customers with a single voice, as opposed to subjecting them to conflicting departmental information.
That's where customer data management (CDM) comes in. CDM enables companies to use their customer information with confidence, and to trust it as a basis for decision-making. The one thing you can count on is that customer data changes all the time. If you do not manage a customer's profile continuously, it will quickly become useless. Poor data results in wasted resources, lost productivity, and an inability to forecast accurately. A CDM solution continuously synchronises customer data across all systems and applications through a customer data hub, thus unifying operational and analytical systems. This "hub" provides the ability to manage the master customer identity and business intelligence classifications and hierarchies in a centralised, efficient way, no matter what form the customer takes in each individual system. This greatly improves reporting accuracy, productivity, day-to-day customer relationships, and the reliability of customer analytics.
The business benefits of CDM are numerous. According to research company Forrester, the strategic value for CDM is in treating the data as a catalyst for customer activity. For example, the strategic value comes not just from changing an address, but also from triggering a campaign based on the fact that something in the customer record has changed - such as an address - and as a result they may need new products or services. Forrester sees three main types of business benefits that companies obtain from implementing CDM: increasing customer value or sales through better knowledge of customer needs; increasing efficiency of business processes and eliminating duplication and wasted efforts; and increasing compliance and data security through standardisation, centralisation, and better management.
Some of the key business benefits that most companies receive include:
* Better customer relationships - A complete view of the customer enables you to deliver consistent customer service and build solid relationships. CDM can help ensure that all customer touch-points have complete customer information for confident, value-added customer service. Also, by improving data quality and simplifying data governance across heterogeneous systems, organisations can leverage customer data more easily and consistently, while keeping the customer at the centre of the focus.
* Increased revenue - It's easier to identify additional opportunities and thus increase revenue if you know who your customers are, what they already have, and what they need.
* Increased departmental productivity -- CDM can provide departments with an enterprise-oriented and unified customer view that is non-redundant, secure, consistent, accurate, and complete - making it easier for departments to focus on their value-add processes while knowing that they're in synch with the rest of the organisation.
* Improved corporate governance - In today's business world, consolidating, cleaning, and maintaining accurate customer information is more important than ever. More and more organisations are being challenged to increase regulatory compliance and meet stricter corporate governance requirements. Sending an invoice to the wrong address can cause a customer to miss payments, which in turn increases allowances for bad debts and write-offs, which cause a misstatement of profits. A centralised data hub allows organisations to audit and ensure they're meeting corporate governance requirements with a single step. Without that, they have to manage customer data across multiple systems, in multiple locations, and manually apply regulatory or governance rules multiple times, increasing the likelihood of mistakes or inadequate follow-through.
* Better business management - By consolidating customer information into a centralised, shared service, organisations can unify and reconcile departmental customer identities into an enterprise identity that will be consistent across departments and applications, making customer management easier and more accurate.
Data quality impacts almost every area of a business, from the day-to-day interactions such as sending an invoice to the right address and getting paid on time, to long-term strategic goals such as attracting investors. On top of that, if your customer data is inaccurate, your customers will simply come to the conclusion that doing business with you is a pain.