An increasing share of senior executives recognize that they need to invest in customer relationship management (CRM) to increase sales, improve profitability, and reinforce the company’s competitive positioning. At the same time, most senior executives have discovered that the challenge of CRM is less about software and technology and more about the skills of their people, customer intelligence gleamed from multiple data sources, and the ability to disseminate this customer intelligence to drive interactions with customers at all touch points.
Forrester Research has identified the principal challenge facing companies pursuing CRM initiatives to be the sourcing of marketing, analytic, and technical skills. In fact, 45% of marketing executives surveyed identified a “lack of skilled staff and/or available talent” as the major pain point in their marketing organization. Moreover, 98% of marketers rated customer analysis and analytics as the most important database element in producing successful results.
To succeed at CRM, companies must have a central repository of continuously updated customer data. This central operating data warehouse will typically include raw transactional data, self-reported survey data, third-party data, and data transformed to inform marketers and integrate into analytic applications.
Capturing transactional data and matching each transaction to an individual customer can be a challenge unless the vast majority of transactions are made with a loyalty card. Without a loyalty card, companies need to establish a policy to collect customer information at the point of sale. This information could be a telephone number, name, and address, or simply a zip code depending upon the application of the data. To optimize in-store data capture rates, marketing should monitor rates at the store and cashier level and report compliance to the operations group.
Five years ago, a specialty retailer expressed interest in going beyond an attitudinal segmentation and establishing direct communication with customers to drive customer acquisition, conversion, upgrade, and retention. While this retailer understood the profile of its customers, it did not have an informed view of the customers at the individual or household level and therefore could neither identify its current customers nor target tailored communications to them.
To establish a database marketing platform, the retailer successfully took these steps:
1) It established a central database operation through a third party.
2) It rented lists for mailings promoting store openings and captured the names and addresses of customers at the point of sale who responded to the offers.
3) It generalized customer data capture in all stores, including linking the store manager’s compensation to the percentage of customers with mailable addresses and the percentage of transactions successfully matched to individual customer.
4) On an ongoing basis it performed deduplications, NCOA, and other data integration processes to create a single view of a customer.
Today this multichannel merchant’s customer data capture rate is consistently above 80%, and its database marketing capability is a substantial contributor the bottom line.
Without good quality data, the fruits of CRM will be limited. Achieving an accurate consolidated view of a customer or even a trade area or a zip code requires effective data capture and advanced customer data integration techniques. These two areas combine to determine the quality of your data.
David Ehrenthal is vice president of the Technology Services Group at PreVision Marketing, a multichannel relationship marketing agency.