Clean Records Yield Better ServiceThe 1999 holiday selling season saw an amazing jump in online shopping with some estimates topping $11 billion. There has been a post-holiday shift in focus, however. It appears that, by this time next year, organizations that put an emphasis on customer service will come out ahead. And many firms are realizing that accurate customer data is shaping up to be one of the most critical factors for better servicing their online customers.
Cleansed data means faster credit card verification and assures a deliverable address. And for online businesses, it's crucial to get this information right away, before a customer has left the site forever. A wrong delivery address can mean not only a disappointed customer, but possibly return shipping charges or lost merchandise.
Due in part to pressure from Wall Street, e-commerce sites are striving for more profitable customers, which means repeat customers. And just as in the traditional business world, strong customer service is the way to achieve this goal in cyberspace.
To compete for repeat customers, online merchants are relying more heavily on consumer data to leverage increasingly sophisticated direct marketing techniques and build one-to-one relationships with their customers.
According to H. Robert Wientzen, president/CEO of the Direct Marketing Association: "In the online environment, price has given way to service. Customer service is clearly what's determining where people are shopping online, and which sites they return to."
And as in the traditional business world, customer data is what fuels strong customer service. Wientzen adds that "until online shoppers can see and talk to a face on the screen - which doesn't look to be too far off - online service and customer satisfaction are largely a matter of how merchants use customer data to understand who their customers are and what they want."
There are a couple of trends in the online world in which e-commerce sites are using data more effectively to boost customer service, but none of them is without its challenges.
More e-businesses are merging various databases to build a data warehouse. A major online computer retailer, for example, is working to consolidate data from its Web site, call center, prospect and customer databases, and outside data vendors to get a clearer picture of customers.
But as e-businesses move in this direction, many find great challenges in warehousing data effectively. The concept of putting all related data in one spot seems simple, but merging multiple sources without proper data cleansing generally results in less accurate data. Strictly by the numbers, merging five databases that are each 95 percent accurate results in a single warehouse that is only 77 percent accurate. Unless precautions are taken, a warehousing project could actually adversely affect efficiency.
Much of the problem comes from duplicate or overlapping records. Without data-quality tools, records for Elizabeth L. Smith, Liz Smith and Beth Smith will all remain, even though they are records for the same customer. So despite efforts to consolidate, a single customer's data will still not be in one place.
The lesson many businesses have had to learn the hard way is that the goal is not simply warehousing, it's merging all data into a single, up-to-date view of each customer.
To create a single, accurate customer view, data-quality software uses sophisticated algorithms to make sure all data is entered in the proper fields, and then checks addresses against an address database to catch errors, such as misspellings and improper street addresses. The software then applies a standard format to all address information, and also checks postal codes that can aid in better matching and consolidation.
Once address data has been corrected, records are compared to one another to eliminate duplicates. Some data-quality software has the capability to match not only standardized address information but also to identify and match customer names, such as Beth, Elizabeth and Liz. If duplicate or overlapping records are found, they are combined to form a single record that contains the most current information.
Another way in which e-businesses are merging data is through customer relationship management systems, which record data from every customer contact, whether online, by phone or another means. These systems build a valuable profile of each customer as data becomes available, but they are only as dependable as the data they contain.
Just as with data warehouses, it's the single customer view that counts, not just the central location. That's why optimal results from CRMs are achieved only when data quality software is used to merge the existing databases that initially load these systems, and new data is cleansed as it is added.
With all of the data being collected and merged, whether in conventional warehouses or through CRMs, one of the biggest trends in customer service that will affect the entire Internet industry is personalization. Increasingly, sites are working to create a customized experience for individual shoppers. The more customer data, the more effective the personalization. This area is affecting business-to-business sites as well as consumer sites.
BTB e-businesses also need to offer customized service, such as discounts, to their best customers. Often, however, identifying these customers can be difficult, even when customer data is consolidated. Parent-child corporations and a multitude of company divisions make customer records difficult to interpret. With data-cleansing matching tools, however, all divisions and departments can be seen as one customer, not separate accounts. This means an e-business can recognize its best customers and offer them the special services and discounts they deserve.
Fueled by growing databases, personalization and customization continues to develop in the area of predictive analysis. By using cleansed customer data and transactional data, predictive techniques are already being used to understand and react to an individual consumer's predicted behavior. Jupiter Communications predicts that this trend in personalization can be expected to grow rapidly as e-businesses build increasingly complex data profiles for online visitors and customers.
With growing competitiveness online and the push for strong service, it has become crucial to carry out customer service processes in real time, and that includes data cleansing.
"Once a customer places an order, data quality affects most everything you do, from credit card verification to the proper shipment of the order," said Craig Brauer of catalog and online direct marketer Cabela's. "That's why it's so important to take care of data quality at the front end."
It will be interesting to see just what happens next Christmas. But given the importance of customer service and satisfaction in the coming year, it's clear that data quality will play a significant role in who comes out a winner next holiday season.