In an era in which consumers are beginning to think of customized products and personalized attention as the norm, both online and offline businesses need to implement a business philosophy that places the customer front and center. This has forced companies to seek customer relationship management solutions to extract the critical marketing information that exists within multiple sources of customer data.
Although many companies are aware of the need to seek a competitive advantage through relationship marketing, their failure to integrate the sales, marketing and customer service operations as well as the various customer data sources acts as a serious obstacle to successful CRM.
One problem is that traditional companies, wary of heavy capital investment, fail to take advantage of the immense potential of the Internet as a tool for establishing one-to-one relationships. These businesses — having built their brands and profits through retail, catalogs, direct mail and telemarketing — perceive the Internet as merely another sales and communications channel. But they should be using their online presence to collect invaluable demographic, pyschographic, attitudinal and behavioral information from consumers in return for personalized content and improved service. This information can then be used to satisfy customer needs, increase long-term loyalty and increase return on marketing investment.
Great opportunities exist for companies willing to integrate their customer data sources. Take, for example, a loyal customer of a large bank. Let's say he has been banking at the same branch for 30 years, has a six-figure income, a mortgage with the bank and an impeccable credit history. One day he visits the bank's Web site but fails to fill out all the required registration questions and leaves without conducting any business. Without data integration, such a person would not be valued by the bank's online marketing department. But if the operational database had been linked to a centralized data warehouse, a few identifying pieces of information would have been enough to reveal the customer's value to the company.
By preparing information to be usable across the enterprise, the bank is able to interact with a highly valuable customer in a cost-efficient and rewarding manner. By failing to integrate the offline and online data, it instead risks eroding their relationship.
The potential for optimizing the value of this customer continues beyond his first visit. Even if he is correctly identified, becomes Web savvy and opens and maintains an online checking account, our customer will, no doubt, continue to interact with a variety of the bank's customer touch points. The best way for the bank to maintain a good relationship with this customer is to continue listening at all those touch points. That means having the technology in place to collect the necessary data, whether from log files, online transactions, direct sales or call centers, so that the data may be constantly refreshed, analyzed, scored and then stored in a centralized data warehouse.
Having this kind of rich customer information from online and offline sources greatly enhances a company's ability to cross-sell products and services and retain its high-value customers. With the prohibitive costs associated with acquiring new customers, companies need to identify their most valuable existing customers through collecting data from every available customer touch point, so that all marketing opportunities are explored through data mining and predictive modeling techniques. In addition, through building total views of their customers, businesses will be able to increase return on investment.
Any company that succeeds in integrating data will have completed the first step in expanding relationships with its customers, making it well positioned to take advantage of the new, customer-centric economy.