Customer Profitability Equals Good Data Qualityby
"People put too much emphasis on CRM solutions and not what goes in them," says Steve Clarke (commercial manager, data services) and Ian Hubbard (sales director) of CDMS. Both men, referring to research by Gartner, believe that this is a key reason why 50 per cent of Customer Relationship Management (CRM) projects are still failing. They also argue that its top down view of the customer and the processes involved are another contributing factor to its ills.
However, it is apparently getting better. People are now more aware of what a CRM system can do for them. Yet to achieve success with CRM, amongst other pre-implementation factors, you need to place more emphasis on data quality. If you don’t have good data, you lose opportunities to sell more of your products and profit from customer relationships. Bad data creates a case of Garbage In, Garbage Out (GIGO) and can prove rather costly. So in order to maximise profit, the data must be fixed and the right processes put in place to ensure that high standards are kept and reached.
There also needs to be some thought about why your company needs a CRM system too. You don’t, for example, necessarily need 'an all singing and dancing' system. In fact Beth Rogers, Research Director of the Institute of Sales and Marketing Management and a senior lecturer at Portsmouth University (she works as a consultant in her own right too), recently found some thought-provoking research while perusing the web. The article she came across suggested that even Microsoft Access is sufficient, and can do much of what the very expensive CRM solutions can perform at a mere fraction of the price.
She adds: “The investment in software has to be preceded by genuine involvement of the users of the technology in identifying processes and data that are really relevant to them, will make their jobs easier (less hassle) and will enable them to demonstrate more value in front of the customer. Companies who have put the time and money into consultation, training and culture change before piloting systems are the case studies of success.”
In Marketing Direct, Steve Clarke comments about effective data and address management. The article, More Than An Address, reveals that CDMS recently found in a client’s database millions of records whose data did not match the Postcode Address File (PAF), and were therefore rendered unmailable. The data was re-process using the CDMS’ address management software and by adjusting various parameters. The result was a 75% turn around in the quality and usability of the data.
“There is a common misconception that just one set of customer records exists within an organisation,” he says: “In reality, customer data often exists in silos; there may well be a marketing database, an operations’ database and a customer service database, all holding different information on the same customers. Address management systems are pivotal to effective database management, address data often being core to which all other databases are appended.” This no doubt includes CRM databases.
The company itself hands, as a part of the Littlewoods Group of companies, handles in its Document Services division more than 300,000,000 mailings a year and is the biggest UK direct mail organisation, employing more than 250 people. One of its directors also sits on the north of England regional board for the Direct Marketing Association. Its data services include two elements: data services and hosting or campaign management solutions, each of which link into a CRM system somewhere along the line. These services are provided on a hosted basis.
CDMS is also the only European Marketing Solutions Provider for Unica, whose Affinium is used by Marks and Spencer’s Financial Services. The company built its reputation in the financial services arena, but it is not restricted to working to just one particular sector of the market. Wherever, there is a huge demand for data, they will work to help companies to create a single view across multiple brands. However, the key focus of their activities is on banking (please see the Equifax case study), retail and the utilities sectors and so the profile their competitors depends on a particular type of client and deal. The firm has also:
- Gained quite a position in the market over about the last 16 months;
- Become better known;
- And gained a greater degree of exposure;
- Achieved client audits that are said to be more stringent than BS779 (which covers the purity of data).
The company approaches potential CRM implementations with a consultative view; they look at how to create a single view of the customer. The company is most likely to recommend Affinium. Yet both Clarke and Hubbard would not recommend it if this solution wasn’t’ right for the clients’ business; they would only advocate what fits the bill. They add: “Some packages strong in operational CRM (Unica is more marketing-focused), while Siebel is fantastic operationally, but they also offer a campaign management system which is not very good. Perhaps there needs to be a combination of campaign management and CRM tools/solutions as part of the package. It’s very much a case of horses for courses.”
For commercial reasons many of their clients weren’t revealed, stating that they seldom receive any open-to-view references. In fact one of the problems that CDMS finds, and which slows down the consultative process (the sales’ cycle takes 3-6 months), boils down to no-one out there wants to admit to anyone that they might have a major problem on their hands (even though everyone knows about them anyway, sometimes this includes their competitors). Most companies have issues that need solving, and solutions can only be found if consultants are embraced with a degree of openness. Quite often to get to this point, CDMS consultants have to work their way through a series of meetings at various levels of an organisation, before an agreement is reached about whether or not it is wise to be honest about business and particularly data quality issues.
Even so Clarke receives quite a bit of praise, regarding the work he completed for Royal Mail. “Steve has been a key figure in helping Royal Mail”, says Richard Castle, “to develop the Universal Suppression Service. He has consistently demonstrated his extensive knowledge of the data market and has used his experience to influence the design of the premier suppression file. He has also used his knowledge to support Royal Mail to develop new dimensions to its data services solutions. As a result, we are able to provide an even wider range of data based solutions. He has the knack of being able to quickly identify the key issues of a data problem and to produce effective solutions.”
CDMS is currently working with a couple of start-ups. As a result of their experience, the following advice is therefore given to SMEs:
- You must understand what you want to get out of CRM, and the timescales involved;
- You must be pragmatic;
- Don’t get carried away with the market hype about what CRM can deliver;
- Get the data right or fail;
- Manage your expectations and those of others involved.
Clarke and Hubbard believe that the Data Protection Act, although it prevents data from being shared across a group of companies, is a good thing for the industry. For those engaged in using CRM as part of their marketing and sales’ strategies, it forces a more structured approach to data management, enables better appending which allows you to see more targets within a diminishing market and leads to better customer profiling. More importantly, if the data is clean and accurate you are more than likely to profit from your customer relationships than if your CRM systems or other database systems are failing to keep up to standard with poor data. Yet is good data the only key to success? It is, in my view, only one element of the whole picture, albeit a very important one. Still, CRM cannot stand alone.
By Graham Jarvis,
Insightexec Case Studies Editor
29 September 2004
1. What gets measured gets better, Beth Rogers FCIM
2. Speed Kills Competition - Marketers should Embrace the Real-time Enterprise, Beth Rogers FCIM
3. People to People: Five Lists for Ensuring that Employees Drive CRM Success, Ian Corner and Beth Rogers FCIM
4. CDMS - http://www.cdms.co.uk/
9. A place to call home
10. More than an address, by David Murphy – Marketing Direct
11. The Current and future state of CRM – published by Gartner; written by Pranav Kumar and Dean McGhan