Master your customer data
Master data management can help companies better understand and serve their customers
Organizations can’t be customer-centric without understanding their customers. Master data management (MDM) aims to do just that: provide insight into the most current information on customers’ behaviors, preferences, accounts and more, while helping to avoid silos and data inconsistencies. Although master data management has only recently moved into the mainstream of the marketing lexicon, the idea of creating holistic views of customers has long been the foundation of successful customer strategy initiatives.
MDM is often characterized as a technology solution to the problem of seeing customer and product information across an organization, but it’s much more complicated than that, according to Forrester Analyst Rob Karel. “MDM isn’t a technology; it’s a business capability that can be enabled and needs collaboration across multiple businesses,” Karel says.
The need for collaboration is just one challenge companies face when attempting to implement MDM. They also need to make significant investments in time and planning. This prevents some businesses from exploring MDM’s potential benefits. Karel sees the biggest hurdles companies have to overcome as executive sponsorship, lack of successful examples and quality of technology available. “There aren’t many businesses out there that have done this well across multiple domains,” he says. “And many vendors don’t provide a total solution; they only appear to.”
Even after navigating these issues, the daunting task of adoption is the final hurdle. Like any initiative that requires a new technology component or a shift in process, employees are often reluctant to change the way they do things. The onus falls on the enterprise to help employees adapt to a new system after years of not having to worry about standardized data. For employees to give up control, they need to recognize that customers may be aware of and unhappy about the inadequacies of a system that prevented them from doing business on their terms.
Overcoming these challenges starts with the basics. Although a number of teams may work together on an MDM project, one clear leader should craft the MDM vision and see that it is carried through – and that it encompasses planning, implementation, rollout and employee adoption. Successful MDM has been shown to reduce costs, streamline processes and have a high ROI. Plus, when integrated into a company’s customer strategy, it can also improve customer relationships. According to The Data Warehousing Institute, 57 percent of organizations responding to a survey on MDM said using it had increased customer satisfaction.
Better information, better experiences
An improved level of customer satisfaction is not surprising. Converting data into customer insight – and then acting on that knowledge – is critical for companies chasing the holy grail of delivering superior customer experiences. MDM helps offer consistent product information across channels; supports Web self-service for customers who want to access order or personal information online; and helps create marketing communications that are more targeted and relevant. These are just a few of the myriad benefits that drive significantly improved customer satisfaction scores and deeper customer relationships.
A leading distributor of industrial and medical equipment saw the fruits of MDM firsthand. When the company wanted to launch an e-commerce site to serve customers who bought supplies online, its effort was stalled by lack of quality data. Following more than 350 acquisitions that resulted in various data models from the combined product, customer and supplier information, the distributor used MDM to create a standard system for storing and recording customer and product data. Automation is now used to update information about new or changing products, and a system has been developed to maintain content online for custom orders. Instead of taking six months, updating the 4,000 images in the distributor’s online catalog is automatic. As a result, customers who formerly had to wait for products that they typically bought by phone or mail to be available online now see a real-time view of what’s available. This total, consistent view of the customer improves the buyer experience, increases sales and locks in loyalty.
A Forrester report by Karel called Introducing Master Data Management1
highlighted one more practical reason to organize data, one that also affects the customer experience: privacy. Laws dealing with consumers’ rights to opt out of e-mail, telemarketing or direct mail don’t always give businesses the benefit of the doubt when it comes to bad data. If the same customer is recorded twice in a database, will the choice to opt out affect both records? Cleaning up and standardizing data can eliminate problems like that.
No matter how many processes are improved, technologies are upgraded and data stewards are chosen, the most important thing to remember is that any MDM model is only as good as the information being fed into it. And although it’s certainly easier said than done, MDM backed by clean data can help deliver maximum return on your customer relationships.
Bio:
The Peppers & Rogers Group, founded by Don Peppers and Martha Rogers, PhD, is a consulting firm recognized as the leading authority on customer-based business strategy. www.1to1.com.
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