By now we all know about master data management (MDM) systems and how they can bring about stunning business results. Weve heard how they generate and maintain an enterprise-wide system of record that contains the consistent, reliable information necessary to perform vital business functions across a large organization. And, weve heard how implementing a strong MDM strategy can increase revenue and profits, improve customer service, reduce time to market, enhance regulatory compliance and simplify reporting and business intelligence.
While these potential business results are intriguing, exactly how are businesses achieving them? What examples demonstrate how MDM deployments are transforming how businesses manage data? This article will show, through real-world examples, how organizations in the consumer products, financial services, hospitality, retail and technology industries are using MDM solutions to manage their most important data while adding to the company bottom line.
Making Sense of Overwhelming Acquisition Data
With more than 20 acquisitions in less than 15 years, a leading consumer products company saw annual revenues soar above $2 billion. With this rapid growth, there was also a stew for unmanaged, redundant customer data. For example, over 100 million customer records were located in dozens of different source systems with no consistent business processes across the acquired business units. This made it impossible to leverage this valuable data to properly serve the companys customers.
The need to manage this vast amount of data with speed and accuracy is what drove the requirement for a real-time MDM system. Since deployment, the MDM solution has created a trusted system of record that provides more complete and accurate information about the companys more than 75 million unique customers, which has enabled better customer service and the ability to cross-sell products and services. In addition, the company is now benefiting from increased compliance with privacy laws because it has a more accurate understanding of the unique customers it truly serves.
Eliminating Duplicate Records Was Just the Beginning
You can overlook a lot of things when your annual revenues are more than $30 billion. But for one Fortune 100 financial services company with 60 million customer records, the cost of duplicate account records was just too high to ignore.
The financial institution was already capable of managing existing duplicate customer records but couldnt prevent new ones from being created. By deploying a customer-centric MDM solution, the company eliminated the creation of duplicate records and improved its customer data integration while enhancing its ability to identify customers and prospects, regardless of where their records were located.
On top of the cost savings resulting from the elimination of duplicate records, the MDM system helped the company better protect customer privacy and improve opt-out compliance regardless of where the opt-out requests were housed. Customer satisfaction, retention and cross-selling were all improved. And, the company had the ability to offer and price appropriate new products and services at the point of service, regardless of where customers were accessing their account (phone, online, branch visit), which means they only see or hear about offers that specifically relate to them.
Increasing Customer Recognition and Loyalty
In the hotel business, guests arent just the bread and butter, they are everything. So, when an international hotel company with more than $500 million in annual revenues and approximately 15 million annual customers realized it didnt know enough about its guests, the company got serious about customer data.
Although it used multiple systems to track guests, the company was only able to follow those enrolled in its loyalty program about 10 percent of its customer base. This meant the company was potentially underservicing 70 percent of frequent guests who did not have a loyalty program number. With mountains of complicated data from multiple systems, representing 5,000 global properties across eight brands, getting a handle on the data was a daunting task.
The company chose an MDM system that could easily aggregate complex customer data without disrupting source systems and seamlessly integrate with its loyalty program system. Once the MDM system was deployed, it was no longer a problem to identify frequent guests, even if they registered under different identities (variations on names and addresses without a consistent identifier), did not use their loyalty program number, or stayed at a number of the companys brands for a variety of reasons. By accurately matching guest information according to demographic and historical information, the company was now able to recognize guests across all brands in its portfolio in real time at the point of service.
In addition, the MDM solution provides reconciled guest data to the companys existing frequency-marketing system to help create smarter cross-selling marketing campaigns. This has helped increase the number of hotel stays by frequent guests. The ability to better understand a guests history has even helped to increase the number of loyalty program accounts.
Improving Customer Experience and Top-Line Growth
A massive retailer with a huge online presence and hundreds of brick-and-mortar stores knew that, even with annual revenues of more than $3 billion, it still had work to do to improve its numbers. So, the retailer began a strategic initiative designed to dramatically improve the customer shopping experience, with the ultimate goal of improving top-line growth.
Plagued by redundant records and an inability to properly recognize customers at any touch point, the company knew it was essential to get a grip on customer data to help it interact with customers in a more meaningful way. With its new MDM system in place, the retailer has created an accurate, real-time view of its approximately 40 million customer records from three disparate data sources. They can now recognize individual and household relationships, and have identified more than 11 million redundant records.
The retailer can now provide a complete view of transaction and customer history at the point of interaction, fulfill online orders at physical stores, better reconcile customer preferences, eliminate duplicate and inconsistent marketing campaigns, and remove the need to repeatedly ask customer loyalty program members for their personal information.
The ability to better manage and improve the quality of its customer data has enabled the retailer to improve its customer shopping experience, which equates to happier, more loyal customers and improved top-line growth.
Understanding Customer Relationships and Improving Revenue and Service
When one of the worlds largest technology companies decided that it needed to completely reform its global data infrastructure, an MDM system was the only way for it to achieve its goals.
The company was losing significant revenue due to incomplete software licensing information and territory assignment issues. The company needed to access composite views of all individual and organization data about customers, partners and suppliers along with advanced business-to-business (B2B) hierarchy management. An MDM system that could create a single view of customer and hierarchical data would help the organization to address its licensing problems and operational inefficiencies, define the true and total value of every customer, identify the most valuable customers within an organization, and even know when a customer purchased through multiple channels.
The end results? Enormous. By properly managing organizational-level data, the company has found $139 million in new licensing revenue and recouped $47 million in operational cost savings. In addition, by creating a complete, real-time view of its customers, the company was able to provide a more consistent customer experience at all touch points by improving self-service and enabling more complete, accurate views of their relationships with the company. The company also has an easier time tracking and respecting privacy preferences, which improves its ability to comply with regulatory requirements. And, finally, the MDM solution has helped improve field productivity since sales reps now can access synchronized data from across the entire organization (CRM, software licensing and financial accounting applications) and gain a better picture of existing relationships and potential for cross- and up-sell opportunities.
At the end of the day, it doesnt matter if you are a retailer or a financial services company, business goals are the same: to better understand customers while improving the bottom line. With an MDM solution in place, it turns out that these two goals do not have to be mutually exclusive. As demonstrated here, companies of all kinds are able to translate getting to know their customers into tangible business results that impact company revenue. Whether the goal is improving cross-selling opportunities for a direct revenue impact, increasing customer loyalty to extend top-line growth, understanding organizational or household hierarchies to clearly define total customer value, or decreasing the risk of paying monumental regulatory compliance fines, customer data is the key.
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