The rise of CRM (customer relationship management) software is a testament to the importance of customer information. Unfortunately, two-thirds of CRM software implementations fail, according to Gartner, Inc., mostly due to poor quality information.

CRM software can be successful only if the organization first cares about its customers. If it's only interested in the software for cross-selling, chances are the organization is only implementing crM (customer relationship "Manipulation").

Whether or not you implement CRM software, your organization must:

  1. Recognize that customer satisfaction is the most important performance measure for long-term business success.
  2. Understand that nonquality information, such as misspelled names, incorrect addresses, inaccurate billing or order fulfillment, duplicate mailings and violations of privacy expectations, is an increasing source of customer dissatisfaction and lost business. For example, Barbra Streisand ranked her investment account from a bank that misspelled her name. Another example involves a client of mine who had insurance with two carriers. With one of the carriers, my client had a personal agent. The other carrier was centralized in another state. My client switched all his business to the latter because they kept more accurate information than the former (even though they were a thousand miles away).
  3. Implement processes and training to assure you capture accurate customer information, and have a mechanism to keep it accurate.

Checklist for Improving and Maintaining High-Quality Customer Information

Planning:

  • Conduct an inventory of all important customer files or databases, including departmental servers and private databases. These often contain more accurate and complete information than production files. Knowledge-workers are forced to maintain their own customer information if they cannot trust or access the production data.
  • Identify the authoritative customer database where data should be updated when changes are made.
  • Assure a process exists to keep data synchronized across all redundant files. The best way is with a single customer record-of-origin/reference database acting as a hub to propagate changes to other databases.
  • Develop a plan to update production customer data from the accurate private customer files.
  • When evaluating CRM software packages, develop an enterprise customer data model against which to evaluate the package.

Data Correction:

  • Assess information quality early if you are migrating to a new customer database or CRM package. Be sure to measure accuracy by contacting a sample of customers and confirming correctness of values. One company found no invalid values for "marital status," but discovered 23.3 percent of those "valid" values were inaccurate!
  • Use customer data correction software to automate as much of the correction/enhancement process as possible; however, understand the limitations of data correction software that uses algorithms to "compute" data values such as gender code and household membership. My former programming colleague, George Davis, doesn't like being called "Mr." As a single man, Davis found that according to his company's customer database, he had become "married" to his widowed mother who lived with him, the result of one householding software module computation.

Operations and Process Improvement:

  • Assure information producers capture all information they can at point of contact with the customer. It will cost five to 10 times more to capture it later. One bank found that 4 million of its 6 million customer records had insufficient information to be useful for intelligent business analytics.
  • Verify vital information, such as identification numbers or serial numbers, while you are at the point of knowledge. It can cost 10 times more to correct it later.
  • Repeat information given verbally, but not in the same way given. A cell phone company reduced their error rate in capturing the serial number from more than 20 percent to less than five-tenths of a percent by having the customer repeat the number backwards.
  • Confirm spelling, especially of names. You never know when "Brown" is really "Browne." To help people spell my name correctly, I say, "English, like the language."
  • Provide training to all staff who capture customer information. Explain why high-quality information is important, how to assure accuracy, who else depends on the information (their "information customers") and costs of errors or omission.
  • Keep "appropriate" contact with customers to verify correctness of details and stay abreast of changes to addresses and important profile information.
  • Keep a last verified/updated date so employees don't ask customers to verify their information too frequently.

What you don't know about your customers can hurt you. What you think you know – but is incorrect – can be devastating to your enterprise.

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