3 Ways to Maximize CRM Systems
By Frank Dravis
Be it for a call center, sales force automation, campaign management or marketing statistical modeling application, customer relationship management (CRM) is the typical solution enterprises turn to when faced with the threat of:
>growing amounts of poorly organized customer data;
>demands to better identify, target and communicate to customers; or
>suspected loss of key customer accounts.
The Problem: Dirty Data
CRM solutions facilitate the organized capture, storage, retrieval, analysis and reporting of customer information. A CRM system's success is directly proportional to the quality of information captured by it. Most technology research firms agree that organizations greatly underestimate the time and resources required to perform the data cleansing functions associated with deploying a CRM system. It's a key reason we've experienced the high rate of CRM implementation failures that have made news headlines.
According to Giga Information Group Research Director Lou Agosta, data quality occasionally has turned out to be the "weak underbelly" of CRM implementations. Without data quality, Agosta asserts, the risk is that the client will implement CRM but "miss" the customer. For example, the true value of an individual customer—or potential cross-sell and upsell opportunities—might not be recognized, because knowing the lifetime value of a customer requires aggregating a lifetime of customer transactions across multiple systems and data sets.
Giga recommends enterprises establish a data quality plan as part of any new CRM initiative. "The installation of a new CRM system often acts as a lightning rod for the constellation of data quality issues, as the system is loaded with data from other back-end systems in the enterprise," Agosta notes.
How do organizations discover they have a data quality problem? Often, the first attempt to use the analytical or reporting capabilities of the CRM system to gain a single view of the customers reveals that one customer has been captured half a dozen ways, or more!
There are, however, some simple things you can do to maximize the effectiveness of your CRM system for target marketing applications. Here are three:
1. Evaluate the Kind of Data You Capture
Your CRM solution should be built around the way you interact with your customers. The processes you use to sell, service and support your customers must be integrated with your CRM solution to leverage the value of your investment. It's important to understand the processes that are defined in the CRM solution and be able to configure the solution to specific business practices.
2. Institute an Ongoing Data Quality Process
Data quality is a continuous process, not a one-time occurrence. As priorities change, as new types of products or services are released, or as new kinds of customers are targeted, the differences need to be reflected in your business. You'll also want to fine-tune business rules as you learn more about your company and your customers. Analysis of a recent marketing campaign may shed new light on how you can better serve your customers.
And don't forget about routine maintenance of the CRM system. More than 41 million change-of-address orders—including 2.6 million businesses—were filed with the U.S. Postal Service in 2000. In less than six months, more than 8 percent of addresses in a typical database have the potential to be inaccurate due to move changes alone.
And it's not just physical moves businesses need to contend with: ZIP code and area code changes, contacts, and phone or e-mail address changes are other examples of how data can become outdated. Data degradation in CRM applications is huge—and must be dealt with on an ongoing basis.
3. Create a Single Customer View
The "holy grail" of targeted marketing—achieving a single customer view—is no easy task. Even the most sophisticated CRM system isn't capable of maintaining a single record per client without accurate, cleansed information. Once various data sources have been identified and inaccurate data have been corrected through enhancement, all records containing overlapping information can be consolidated to create a single customer record.
For marketers, having an accurate view of each customer enables more sophisticated marketing campaigns such as loyalty programs, or more highly personalized offers. And as marketers do their jobs better, customers become more satisfied.
Isn't that what you want out of your CRM system?
Frank Dravis is vice president of information quality for Firstlogic, Inc., La Crosse, WI. He has 16 years of experience in information technology and software development, with the majority of his experience centered on solutions design and implementation. Dravis can be reached at (608) 782-5000, or firstname.lastname@example.org.