Building a Holistic Customer View

One of the most difficult yet fundamental steps in creating a customer-centric retail-marketing model is building a holistic view of the customer. This requires identifying and linking all internal sources of customer data to be able to identify each customer as an individual, regardless of where that information resides. Not only is this process an important foundation in driving multichannel strategies, but it is also the basis for creating and delivering a consistent view of the brand to the customer.

If this sounds like a project for the IT department, it is. But it’s much more than that, based on the objective of becoming customer-centric. Understanding and mapping out how information is to be used will drive data integration strategy. For example, the customer information required to support event-based offers is different than that required to support store site selection.

Regardless of the goal, using this level of customer insight requires careful planning and a detailed understanding of the collection, organization, and presentation of customer information in operational systems as well how that information will be used in reporting and analytics.

The process of creating the infrastructure for customer-centric retail marketing involves three steps:

  1. Map out process requirements for the use of customer information.
  2. Select the appropriate methodology for integrating and maintaining that information.
  3. Determine the necessary operational process change to capture data at the necessary touch-points.

Many merchants launching initiatives to use customer knowledge to drive customer experience and improve marketing campaigns focus initially on understanding customer loyalty and how to utilize that information to provide better targeting of existing campaigns. Customer loyalty analysis could include lifetime value (LTV), share of wallet (SOW) and customer profiling using segmentation. The resulting analysis is typically a customer loyalty report and a predictive “loyalty” model for scoring a retailer’s house file.

Initially, internal information will be sourced from all point-of-sale systems: stores, Internet, and call center, as well as customer support, home delivery, loyalty and credit systems. Invariably, there will be data missing or there will be processes that compromise the integrity of the retailer’s customer information.

In order to support cleansing this internal information, as well as enhancing it to support the ultimate analysis and modeling, the retailer will need to acquire data from a third party that includes consumer address, age, income, purchase behavior at other retailers, attitudinal and behavioral information, as well as media consumption behavior.

With the customer data sourced, the retailer needs to consider how to integrate and maintain that information. The decision here is critical, as much of the expense of maintaining usable customer information is in the integration process. The options for managing this data run from batch-based processes that update the data on a scheduled basis to setting up a fully integrated customer database.

Regardless of the method used, the technology behind this process, customer data integration (CDI), is a highly sophisticated, persistent customer identification system. A CDI system provides a “universal ID” that enables continual updating of your customer records from both internal and external sources, ensuring that your customer information is accurate and up to date at all times.

At the same time the retailer is identifying the internal sources of data, it also needs to consider how to capture information on an on-going basis. The merchant needs to make sure it captures information enabling it to identify a mailable address for every customer regardless of his or her method of payment. While this is less of a problem in catalog and Internet channels, it can be a real challenge in a store environment.

To overcome this challenge, the retailer has to introduce new in-store procedures for capturing this customer data. Employing a frequent purchase card that offers some discount and is tied to a phone number, e-mail, or street address may serve as the basis for securing the necessary information. Consistency and completeness is the key for the process of data capture, and retailers need their operations teams to ensure that associates are trained and provided the necessary incentives to support data collection efforts.

With the foundation created, the retailer can now pursue the customer loyalty analysis and model creation. Depending on the size of the retailer’s customer file and the level of detail required to accomplish these goals, the time needed to complete this type of project can range from eight weeks to six months. The time invested in creating a holistic view of the customer will pay dividends in supporting a strategy of customer-centric marketing, resulting in satisfied customers who recognize the value the retailer brings them through a personalized relationship that is relevant to their lives.

Marc Fanelli is vice president, Business Strategies Group, Experian Marketing Solutions. He is writing a series of articles based on his recently-released white paper, “Meeting multichannel consumer demands.”

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