Master Data Management (MDM) is the discipline of mastering the most essential business data, such as data about products, customers, suppliers or locations. This means collecting data and storing it centrally to create a single truth. That way, you keep your data accurate and you can share it in the right format to the right channel. But, this discipline is far from being the standard today: 51% of data is duplicate, 54% of data is outdated and 23% of all customer data is inaccurate.
What do these numbers mean in practice? Imagine having the following customer experiences:
- To make a slight change in the order you placed online, you call your wholesaler. But the customer service does not know your company and they can’t find the order.
- Out of the blue, you receive a final notice from your credit card company. Their invoice and previous reminders apparently went to your old address.
- Emails with offers for items you already bought or are not interested in keep flooding your mailbox. Your specific interests are not properly managed by the company.
- A company services you again and again with great, personal service. Only, every mailing, invoice and letter still contains the name of the previous marketing manager. And every time you tell the company, they promise to fix this little error.
- You’re done doing business with that company and you’ve asked them to remove you from their database. But they keep sending you emails and mailings because their marketing system still holds your records.
In all these examples, the company doesn’t seem to know you or your needs. While companies may have gotten away with these bad experiences maybe some ten years ago, today, it’s a whole different game.
Superior Customer Experience Demands Quality Customer Data
Two decades ago, the term experience economy was introduced by Joseph Pine and James Gilmore in an article in Harvard Business Review. It stands for a new economic era in which all businesses must orchestrate memorable events for their customers. Some 18 years later in 2016, Gartner conducted a survey in which 89% of all businesses participating indicated that customer experience would be their primary differentiator in the year 2017. Today, customers are demanding personalized experiences in every channel they interact with.
But knowing who’s who can get cloudy. Personalizing marketing, support and loyalty is challenging. The ability to create personalized and valuable experiences for customers relies on the quality of your data. You need accurate and precise data about who your customers are, what they want and the channels they frequently visit. The quality of your customer data bears a direct correlation with the health of your business.
Bad Customer Data Is Bad For Business
Poor customer data can lose you – or prevent you from making – lots and lots of money. Poor data quality costs the U.S. economy a staggering 3.1 trillion dollars every year, according to an IBM estimate. On the bottom line, bad data has a direct impact on 88% of all American companies, additional research Experian Data Quality found. The average loss resulting from bad data is 12% of the company’s overall revenue.
Bad customer data harms the ability to build customer relationships, the attraction and retention of customers, as well as the ability to perform proper analysis and plan strategically. This leads to poor outcomes that impact the organization’s reputation and bottom line, such as poorly targeted marketing content, ineffective sales and misaligned organization strategies. In the field of marketing, you’ll recognize bad customer data by not being able to answer the following questions:
- Why do I lose customers?
- Why is my customer retention so low?
- Why is the customer experience below par?
- Why has our seller or partner account on the marketplace such a low rating?
- Why is our NPS score so low?
- Why are my e-commerce customers not satisfied?
- Why do customers complain about unpleasant and disorienting experiences with your brand?
These questions all tie in with the relevance and value of the experience of your customers with your brand. To retain your customers, improve NPS Score and increase customer lifetime value and even get new customers, you’ll need to improve the customer experience.
What Can Customer MDM Do for You?
Achieving customer understanding requires the connecting, cleansing and enhancing of customer data. By matching and merging multiple customer records into one, you create a single golden record of all the information your organization has about a customer.
When you connect this golden record to other data domains, interesting insights can appear. Combining customer data with product data tells you what products the customer buys and in which types of products he or she is interested. Linking with location data shows the stores your customer frequently visits. By connecting all your different master data sources to your customer data, you create a 360° customer view. Sales, marketing and customer service all benefit from having a complete and unambiguous picture.
This is what Customer Master Data Management (Customer MDM) enables: knowing your customers, giving personalized one-to-one experiences and providing optimal customer service. Customer MDM gives enterprises the foundation they need to make smarter decisions faster. It also allows adhering more easily to governance and regulatory compliance.
A Customer MDM enables you to:
- Store all customer data in one single source of truth;
- Match, merge, standardize and validating data to create a golden record for every customer;
- Manage, create and enrich your data in a centralized solution that’s accessible for everybody;
- To map the relationships between different entities, like doctor and hospital for example;
- Enhance the master record with additional data from external resources;
- Link customer data to other data domains, like product data, supplier data or location data;
- Reporting through dashboarding and business analytics for data-driven decision-making;
- Sharing accurate customer data across the organization to ERP, e-commerce, customer service systems, warehouse management systems, HR and more.
All these solution features translate directly into business benefits.
The Business Benefits of Customer MDM
Customer MDM is the great enabler behind every successful process. Omnichannel for example, is described as the cross-channel content strategy to improve customer experience and drive better relationships. A direct benefit of omnichannel is higher customer retention. According to Aberdeen research, companies with strong omnichannel customer engagement strategies retain an average of 89% of their customers. Or consider the challenge of building traffic for e-commerce or the retail store. 56% of consumers are more likely to shop at a retailer in-store or online that recognizes them by name, Accenture research found. Whether it’s your operational performance or the bottom line, Customer MDM creates tangible business value.
Are you ready to become customer-centric? Customer MDM lets you correctly place your customers in your company. Read more about MDM here or contact our MDM specialists.