VIEWPOINT: by Mike Healy, Executive VP of European Operations for Innovative Systems
I'm a lover of good wine - I particularly enjoy a chilled glass of Chardonnay. I purchase my wine from a particular retailer online every few weeks. So you'd think I’d be pleased to receive an email offering a discount off my favourite tipple.
However, the email didn't stop at "Dear Mr Healy, to reward your loyal custom please claim your money-off discount." It stated that I had purchased a specific quantity of a particular wine on particular dates. All of a sudden I felt as if someone was monitoring my every move.
Of course, companies today analyse customer data gathered from every single transaction we conduct. This capability, powered by CRM technology, enables the giant retailers to re-create the one-to-one relationship with their faceless customers that the small corner shop nurtured through daily, personal interaction. How they use that data, however, can have a marked effect on whether they attract additional, loyal business - or whether they push a customer away for good.
The Big Brother Effect
The problem with the online wine mailer I received was that it was too familiar. If it had stopped at providing a discount on my favourite wine I would have been impressed that the company had looked into my shopping preferences. But I didn't need to know how minutely they could analyse my purchases.
The other danger with personalised mailings is that you have to be supremely confident that the data you use to create the customer profile truly reflects the customer's purchasing habits. If a customer's details aren't complete, for example, then another Mr M Healy, the teetotaller, receives a wine voucher - and you might cause such offence that the customer never shops with you again.
To get a personalised mailing right companies must ensure that they have an accurate picture of the customer - and the best way to do that is to make it easy for them to provide information on their specific wants and preferences. The obvious place to start is on the web.
By deploying a web channel companies can encourage customers to provide detailed information on what they want and how they want to be sold to - even what time of day they would prefer to be called. By enabling them to do this online, at their own speed and in their own time, companies can gather far more information than is possible during a short, ad-hoc phone conversation, and with a higher response rate than from a postal questionnaire.
Companies can also use the web to enable customers to 'opt-in' to receive information or promotions and 'opt-out' of others. My bank once asked me whether I wanted to receive information on its loan deals, which I didn't. I now don’t receive information on any of their loan products, including mortgages which I am interested in reviewing. If my bank used the web to give me greater flexibility to choose what I want information on at any point in time they would be able to maximise potential sales opportunities even as they respect my privacy and remain data-protection compliant.
If you feed the highly personalised data that you gather on the web through to support multiple customer interaction channels - traditional outlets, the telephone and web-based media - then you will gain real competitive advantage. You will have deeper insight into your customers' preferences. By tracking their activity across each channel you will gain a far greater understanding of their wider buying habits. However, as you feed this data seamlessly through to back office systems companies face the problem of whether to de-duplicate customer records or not. By de-duping customer records to create one single customer profile makes it is easier for marketing to create accurate customer profiles on which they can build targeted, personalised promotions. The 0.5% of cases where they get it wrong would not cause any real problems - a few misdirected direct mailers out of millions. In an eCommerce environment de-duping is risky. The 0.5% cases where two records are de-duped and they are not the same person - twin brothers living in the same household with the same initials - would have disastrous consequences. Just imagine what would happen if unscrupulous brother James was given clear access to honest Joe's bank account.
The only solution seems to be to avoid the risk entirely. Even where the likelihood is that the customer is one and the same, no e-commerce-driven organisation can afford to de-duplicate the record in case they get it wrong
This next level of CRM - eCRM - will enable companies to confidently provide the accurately targeted mailings and personalised web pages that help to win customer loyalty. Or it will if the companies have ensured one thing - that they have quality data that they are using to support each individual channel, not the same data for all.
Multiple customer views provides the answer
Critical to the success of eCRM is the ability to manage multiple customer views of the data captured through each channel and use it to support traditional and eMarketing approaches. This is because each requires different levels and type of accurate data.
To illustrate, take one example of inaccurate data - an incorrectly completed name field. Mr Mike Healy with the email address [email protected] is recorded as regularly purchasing cases of Australian Chardonnay. Mr M Healy with an email address [email protected] regularly purchases red Bordeaux.
Marketing can look at these two profiles, assume that they are the same person, link the records and send me a promotion for a mixed case of wine. If they're wrong and I'm the Matt Healy that detests red wine they’ve wasted a mailer but they haven’t done any real harm.
However, if the same incomplete data is used to support the web channel, I might be given access to the purchasing history of Matt Healy - not to mention his shopping basket. In this scenario the two records cannot be linked in case they give a customer access to the wrong information - with disastrous consequences. Instead, one single, conservative view of the customer has to be maintained.
Being wrong 40% of the time
At ISI we have identified that as many as 40% of companies' customer records can be inaccurate. If companies try to maintain a single customer view that works across all channels with that level of inaccuracy then as many as 40% of all management and marketing decisions are taken using the wrong customer information. That's when M Healy the teetotaller is sent a wine promotion.
Companies that wish to leverage eCRM need to establish multiple views of customers that are consistent across the enterprise so that, depending on the application the appropriate view can be used. For one application utilisation, such as for eCommerce purposes, both views of the customer can be accessed and just the single, de-duped version for cross-selling purposes. This enables them to have a centralised view of the customer and different versions that can be manipulated and analysed depending on how the data will be used by the business.
To do this companies must review their customer data to ascertain its level of accuracy and take steps to improve its overall quality where necessary. Once the appropriate level of quality is reached they can then provide each channel with its own view of the customer that can be manipulated in whatever way is most appropriate. Marketing can de-duplicate records to get more accurate profiling, and the cautionary customer view can be maintained for the web.
The broader picture
By improving their data quality to minimise inaccuracies, and leveraging eCRM to get to the heart of their customers’ needs, companies will be able to get to the ultimate view of the customer - the householder view.
The retailer that sent me the wine email also sent me discounts on food products, no doubt to encourage me to spend more in other areas of their site/store. If they had a householder view, however, they would have been able to link my buying habits with that of my wife, who does the grocery shopping with them three times a week. As well as gain a greater insight into our preferences as a buying entity they would also have protected the profit margins they have now cut by giving my wife discounts off products she already buys.
Getting up close and personal with your customers is still not an exact science. However, eCRM - with its multiple channels and multiple customer views - is making it possible for companies to more astutely target promotions by enabling them to understand the wider context in which their customers buy products and transact business. Just don't let the customer see how clever you are.