The Key To Unlocking Customer Knowledge
- 1. infousamm.com 866.716.7680 An infoUSA Mid Market Solutions White Paper The Key to Unlocking Customer Knowledge? A Centralized Database.
- 2. infousamm.com 866.716.7680 The Key to Unlocking Customer Knowledge? A Centralized Database. 2 Introduction Are you neglecting your company’s most valuable asset? You’re not alone. Many companies invest countless hours gathering information about their customers, only to scatter it throughout the organization and out of reach of the people who need it the most. This paper will explore the benefits of centralizing your customer data into a single database and discuss how regular data hygiene and enhancement are imperative to an effective sales and marketing strategy. A double-edged sword Customer data is both a blessing and a curse. The blessing – customer data can paint a vivid picture of who your customers are, what they want, and when and why they want it – fundamental questions that all companies need answered. The curse – data can be difficult to manage. Many businesses disperse their customer information across multiple departments – billing, sales, customer service centers, marketing, you name it. To make matters worse, these databases don’t communicate with one another. The various departments are aware of their own interactions with customers, but rarely know much about the other exchanges. A salesperson knows how many times she has called a customer in the past month. A marketing manager knows how frequently a customer is contacted by email. A customer service representative knows how many times a customer may have called for information or technical help. Unfortunately, that information is rarely shared across the organization. This lack of integration makes it nearly impossible for companies to develop a comprehensive view of their customers. According to a 2008 Forrester Research survey of 55 business and IT decision-makers, only 15% of respondents said they had a very good or outstanding “single view of the customer across all systems and platforms.” The study, “Customer Data Management Best Practices Adoption,” also revealed general skepticism about the quality of the information within their databases. Only 31% of companies surveyed were confident they have a superior “continuously updated customer knowledge base that provides all the critical business information about customer relationships.” A strategic necessity In today's competitive business world, retaining your best customers is critical to your success. This is especially true when you remember that 80% of your sales come from 20% of your customers. So how can you hold on to your most profitable customers? • By knowing your customers better than the competition • By using that customer knowledge to create informed, personalized interactions • By giving your customers exactly what they need, when they need it • By continuously offering your customers new products and services centered on their needs
- 3. infousamm.com 866.716.7680 The Key to Unlocking Customer Knowledge? A Centralized Database. 3 To accomplish these goals, you need to be able to gather and analyze all of the information available on your customers. A centralized customer database can help you do just that. By combining all of your data into one centralized location, you can gain a comprehensive view of your customers’ purchase history and their interactions with your company. You can study their demographics and firmographics. You can build stronger relationships and boost cross-sell and up-sell opportunities. You can also improve service and revenue opportunities. Need more reasons? Companies that create a centralized customer database can: Ensure data integrity One of the greatest benefits of centralizing your customer database is data integrity. At some time, your customers will move, change their telephone numbers or obtain new email addresses. Losing contact with them, even for a short period of time, translates into lost revenue. Updating one database is challenging enough; with multiple databases, the danger of data decay is multiplied tenfold. A central database goes a long way toward streamlining the data hygiene and enhancement process. Gain a deeper insight into their customers Once you merge your data into one centralized database, you can begin to stitch together a comprehensive view of your customers. Customer data such as purchase history, sale dates and order values will help you build rich customer profiles for target marketing. You will be able to gain insight into customer lifetime value, behavioral trends and spending patterns. Armed with this data, you can focus your resources on your most profitable customers and prospects with the highest potential to be profitable. Better target prospects across multiple channels The typical business contacts customers and prospects through so many channels (email, direct mail, website, telephone, mobile marketing, print advertising, etc.) it can be overwhelming drawing all of these channels together into an integrated marketing strategy. A centralized customer database can improve channel marketing coordination and help you determine your customers’ channel preferences. You’ll be better equipped to evaluate your direct response strategy, clarify your goals and coordinate your campaigns. Improve efficiency in marketing efforts Scattered customer information can result in miscommunications and contact oversaturation. It’s astonishing how many companies waste both time and money targeting customers who already buy from them. Not only does it make bad business sense, but it can also annoy your customers. (Don’t forget, when you lose customers, you also lose their lifetime customer value – the value of every purchase they would have made.) A centralized customer database helps businesses create well-timed, relevant communications, as well as track their return on marketing investment more consistently and accurately.
- 4. infousamm.com 866.716.7680 The Key to Unlocking Customer Knowledge? A Centralized Database. 4 Identify new business opportunities Businesses that consolidate customer information can use this data to identify new business opportunities and improve efficiency. For example, a textile company can use their customer data to analyze demand and manage their inventory. They can also use customer data to set prices and manage their supply chain. Centralize tech support With a centralized customer database, your IT department can focus on one product instead of supporting each individual database. Centralizing your customer database is a big step toward optimizing sales, planning and processes…but it’s only the first step. The second step is overcoming the challenge of inconsistent or inaccurate data. Adopting healthy data habits Your database contains some of the most important information on your most valuable company asset – your customers and prospects. But it’s surprising how many companies spend so much time gathering data and so little time maintaining this vital aspect of their business. Just like a garden, your database must be regularly tended if you want to grow new business opportunities. Whether you decide to integrate your customer data into a central database or maintain separate databases, here are a few things to remember: Your database is only as good as the data it contains Gathering information on your customers is the easy part; keeping it accurate and up-to-date is a much bigger challenge. Customer information begins to deteriorate as soon as it hits your database. For example, some of your customers will move, others will pass away. Names and phone numbers will change and companies will close. If your database contains outdated information, you’re not connecting with all of your customers. You’re also wasting money on undeliverables – according to research by Pitney Bowes, on average, each piece of returned mail costs the mailer an average of $3. That includes printing, postage, inbound handling, analysis and re-mailing costs, but doesn’t include the cost of missed marketing opportunities, uncollected receivables and lost USPS discounts. Ensuring you have deliverable addresses and accurate data will help you save money, boost response rates and improve targeting of likely buyers. Some companies have the time, expertise and resources needed to clean and update their customer database. Consider hiring a company that specializes in data hygiene. These companies will cross-check your data against their records to ensure you have the freshest addresses, phone numbers and other contact information. They can merge files and remove duplicates. They can also help you increase deliverability by ensuring the addresses in your lists are current and standardized.
- 5. infousamm.com 866.716.7680 The Key to Unlocking Customer Knowledge? A Centralized Database. 5 Gaps in your customer database = lost opportunities If your database contains only names and addresses, you’re sacrificing an opportunity to contact customers through multiple channels. Adding contact information such as email addresses and telephone numbers can help you increase sales conversion rates through multiple, well-timed campaigns. By adding demographics and firmographics, you’ll gain a clearer picture of exactly who is buying your product or service. This added insight will help you gain a better understanding of your market and develop solid strategies to retain, service and grow your customer base. Businesses face many options when considering whether to hire an outside company to enhance their customer database. Similar to data hygiene services, these companies will compare your database against their records and add missing data where available. So how do you find the best fit for your company? Do your homework and ask business associates for recommendations. You need to know your customers in order to sell to them Now that you’ve drawn a complete picture of your customer, it’s time to put your company statisticians to work. Using analytical tools, you can drill down into your customer data to find common traits, meaningful patterns and trends. By identifying the specific characteristics unique to your customers, you will learn more about your best customers and be able to identify potential customers just like them. You can also gain insight into customer lifetime value, behavioral trends and spending patterns. Armed with this data, you can focus your resources on your most promising markets, your most profitable customers and prospects with the highest potential to be profitable. A few companies specialize in helping you understand key customer characteristics, and a few web-based applications give you the power to do your own in-depth analysis rather than waiting for the IT department to run your reports. Again, do your homework and ask your business associates for recommendations. Summary The real reward for creating a centralized customer database? Growth. This comes from better targeting, increased customer retention, more cross-selling and up-selling and a faster response to market changes. Have questions about centralizing your customer database? Call infoUSA Mid Market Solutions at 866.716.7680 or visit us online at infousamm.com or marketzonegold.com. We can help you consolidate your customer files, clean and enhance your customer information, and make your database and direct-marketing efforts more productive.