CRM Custodianship

Dears,

What is this CRM Custodianship? What does it mean to Companies of different sizes to have the CRM or Customer Data Custodian? Let’s see -Take a data warehouse, add smart analysis tools, a structured approach to managing inbound and outbound customer contacts, including self-managed Web contacts, and give the golden data an almighty stir - we develop magical insights into customer characteristics and behavior which give us a strong advantage over our competitors. While increasing numbers of large companies claim to have reached magical levels of insights, we must never forget that when we say 'a company knows', we may be committing the ultimate sin of 'personification' - treating a 'thing' (the company) as an individual.

In fact, when we say 'a company understands or knows its customers', what we mean is that this knowledge of customers resides in a combination of databases (often several), analyses, reports documenting the analyses, and even the minds of certain staff. As customers themselves are constantly changing (the individuals may be different, the behavior of given individuals changing), this knowledge needs to be refreshed, and whether this happens depends upon the frequency and accuracy of update of the information sources, the re-application of whatever techniques were used to distil knowledge from the information, and the re-communication of results to whoever is deemed to hold the knowledge. This applies whether the source is at the batch end (eg who responds to a direct mail campaign, nature of response) or online (eg site exploration behaviour of particular types of customer).

So, the ingredients of the golden data are ever changing. What we put in, how we stir it, and how long we let it cook all influence the quality of what we take out. Who determines these? The answer - the custodian of the golden data. Who is the custodian? Is it the company itself, the data exploitation agency, the direct marketing agency, or the outsourced database bureau? In practice, the answer is usually some combination of these. In very few cases do larger companies do everything themselves. Interestingly, when they do, the result seems to be that customer knowledge is less sophisticated (fewer segments defined, data perhaps less up to date, less accurate), but the knowledge is better used (more consistently, across different channels, as part of well-defined general marketing processes rather than tactically). This is usually for one of two very different reasons. Either the marketing users are themselves more closely involved in the process of specifying and then interpreting analyses, or the internal department charged with developing a customer view becomes an advocate for its good use, and works very closely with marketing users to make sure it is used. In the more advanced examples, they will also provide metrics to show when it is used and what the results have been, to encourage use and to expose misuse.

However, there are also some examples of excellent practice in outsourcing to analysis or database hosting agencies. This works really well when there is a long-term strategic agreement between supplier and client and when the focus of the agreement is not solely or primarily on the input (who holds and analyses the data, or communicates the findings) but on the outputs, ie what business results are expected from the gathering and holding of data, analysis to obtain knowledge, and exploitation of the resulting knowledge. These required outputs may be expressed in tactical terms, eg uplifts to campaign response or conversion rates, or strategic terms, eg increased value of the customer base. Increasingly e-sourcing, e-business on demand (EBOD) and other modern variants of outsourcing are reflecting and including these requirements.

Unfortunately, in most cases, whether customer understanding is in-sourced or outsourced, the custodianship is poorly allocated - sometimes dropping between the planks, sometimes simply non-existent. This failure is evidenced in many ways. There may be many overlapping segmentation projects with no interface with each other. Segmentation and analysis may be conducted using variables that are not available on the database, so analysis can rarely be acted upon. There may be great lack of awareness amongst users about what is available, what the results of data use have been, or even how to use the knowledge practically. Where these basic problems do not exist, there may be more advanced problems, eg the customer understanding only being used in one channel (perhaps the channel in which the understanding was generated) and not in others. In many cases, failures are due to not understanding that managing customer knowledge is a skilled operation, and whether the skills are in-house or out-house, they must be maintained and improved - to keep up to date with what it is possible to do, and also with the customer knowledge itself.

In most cases, these failures can be traced to a single cause - that no one has asked (let alone answered) the question: 'Who is fully accountable for managing customer knowledge?' In cases where it is badly in-sourced, marketing managers have often taken the view that 'customer knowledge is a strategic asset, and therefore our company will not out-source its management!' Every time I hear such a brave phrase, I know I'm likely to find that the company manages it very badly, because it has not asked the accountability question.

Today Companies go after MDM solutions to get their Golden Record which is a progressive step but not A matured step without taking effective steps towards Customer Data Custodianship. The fragmented customer data is a very risky proposition to grow in this competitive economy. Enterprises should focus on improving the customer data quality and enrichment. This is the first step toward customer experience optimization as well as setting a stage for some competitive intelligence project. The custodian should be empowered to make all that is necessary to enrich the customer data and fully autonomy to be given in directing the Sales and Marketing department to effectively maintain and update the customer data.


Loving P&C


DC*