How the sluggish economy is affecting customer data efficiencyby
The importance of customer data has been skewed by the recession, with the emphasis on using it more efficiently across multiple channels now forced upon companies looking for early recovery. But how do you get the most out of your customer data? Jon Wilcox asks the analysts what they see as the most important data trends in the credit crunch and beyond.
Jon Wilcox, technology correspondent
Even if Gordon Brown’s prediction that the recession will end in the UK by the end of 2009 proves accurate, the downturn will have affected every facet of UK business. And according to the experts, improving customer data efficiency is key for businesses looking to stabilise and quickly recover. But how exactly can it be achieved?
One of the key trends over the next 12 months will be the need for more value from customer information, according to William Band, vice president at Forrester Research, which found that nearly half the respondents to its recent survey believed an initiative in master data management (MDM) was ‘critical or important’.
Nigel Pendse, author, The BI Survey 8
Identifying the correct approach to take, however, remains a grey area. Band believes poor customer data management is “one of the biggest barriers to getting value from CRM programmes” and that the duration of 2009 and early 2010 will see CRM professionals increase their focus on analysing how enterprises collect, distribute and use customer data to create value. Alex Jeffries, research analyst for Boston based Aberdeen Group, agrees: “Particularly in a tough economic climate, companies are focused on accurate reporting and forecasting. The lack of customer data within the system does not allow for accurate performance predictions, nor does it necessarily allow for repeatable success.”
Unlike the renewed focus within MDM, the implementation of business intelligence (BI) over the next 12 months is one area expected to change dramatically. Although, Nigel Pendse, author of The BI Survey 8, says BI it is optional rather than compulsory, those firms who already have systems in place will have to change their strategies as larger, more costly projects are being ditched in favour for smaller, more manageable projects that are linked to a higher success rate.
“You aren't legally obliged to have any BI applications and businesses can run day-to-day with just transaction systems,” explains Pendse. “Although organisations that already have working BI applications will be better off than those who do not, there will be less willingness to approve new projects. Vendors and buyers should always remember that BI applications must pay their own way.”
He also highlights that while taking on smaller, pragmatic projects with a quick payback would seem the most sensible route to take during the downturn because of their ability to deliver business benefits at lower risk; this trend is likely to continue way beyond the end of the recession. “All future BI projects should be in this category,” he adds. And it is a view born out of The BI Survey 8. “Large, grandiose BI projects, like other large IT projects, have a high failure rate - and there's just no need for them,” says the report. “Small BI projects, with well-defined, achievable goals should be the norm from now on.”
Pendse also advises that business users should be involved right from the development stage when taking on any type of BI implementation. “Simply leaving it to IT is a very bad strategy,” he emphasises. “The BI Survey shows that far too many BI projects have no end-user involvement in their implementation and they duly deliver less later.”
Driving data efficiency
The recession has also proved to be an important driving force in the online world, too. Jefferies argues that in these uncertain economic times, companies are viewing the completeness of customer data, particularly from the online channel, as a major determinant of marketing success – which is why he forecasts renewed emphasis on web analytics for the year ahead. “The current economic downturn has forced companies to place an even larger emphasis on the ability to attract, retain, and convert online customers,” he explains, adding that 79% of firms have indicated that the current economic climate plays a prominent role in their company's decision to attain better consumer insights from the cost-effective online channel.
Alex Jeffries, research analyst, Aberdeen Group
Identifying trends through web analytics also increases that all-important data efficiency, as Jefferies states: “When online information is examined on a larger scale across several thousands of customers, trends emerge that not only lead to website optimisation but also the improvement of offline marketing campaigns. Segmentation and personalisation initiatives allow businesses to derive more value from their analytics data by seamlessly weaving a customer’s online actions with future marketing efforts.”
Naturally, the ability to effectively harness data into useful nuggets continues to be a cornerstone of analytics: “The question isn’t always about gathering customer data when talking about web analytics - after all, a lot of solutions are very good at providing click-through, page views and conversion information on customers,” says Jefferies. “The challenge is taking that customer data, whether it be an anonymous user or someone who is identifiable through a log-in or cookie, and using it across different marketing channels and campaigns.”
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