May 17, 1999

Behind The Numbers:
A Customer By Any Other Name

hat's a customer? In the IT corner of the company empire, a customer can be defined purely in transactional terms: by what he or she purchases via your Web or retail outlets. Some IT shops also segment customers in specific ways, according to their extranet access or billing status. To IT, these customers remain fairly anonymous, but many of these same customers may be on a sales manager's speed dial in a branch office.

Is this a business problem or an IT opportunity? Probably both. Most businesses not only fail to aggregate crucial customer data, they don't share a common customer definition. Even worse, many companies don't bother to clean out error-laden data records regularly. These are key findings of a study of 145 IT managers by InformationWeek, fielded in conjunction with Innovative Systems Inc. After examining trends in customer data quality and customer-information management, the study found there is plenty of upside potential for IT departments grappling with these issues.

Getting every department to agree on what constitutes a customer--or a good prospect--may be a good idea, but it's also a highly complicated process. If one part of your business identifies a highly profitable customer, it's becoming apparent that everyone in the company needs access to this data.

Yet there's no majority view of what defines a customer, according to the study. "Any entity that interacts with the company" is the most widely selected definition. Only 11% acknowledged their organization has no common definition. Still, there's a glimmer of hope: Most sites have assigned a cross-functional team to concentrate on a common view of customers across business functions and channels.

Does everyone in your company agree on who your customers are? Let us know at the E-mail address below.

Rusty Weston
Managing Editor/Research
rweston@cmp.com

---

This week in Behind The Numbers:

Driving Customer Centricity

How Much Is Quality Worth?

The Name Blame Game

Why Companies Wait To Act

---

Driving Customer Centricity

When a customer phones your business, do sales or service reps in your call center have instant access to the person's sales history? Do they know if the customer likes to register complaints? Are they given cross-selling opportunities?

This sort of targeted customer data is one of the promises of customer-relationship management. And it's a market with real potential, according to the survey. While most call centers provide reps with customer contact information, only 81% of sites offer their reps a customer's transaction history, and just 70% supply a service history.

---

How Much Is Quality Worth?

You might think it's obvious when you're treating your customers right. They come back, and you get more sales. Many companies gladly invest in a process that automates customer management because they see a clear payback. But calculating the value of simply not looking stupid in front of your customers is unquestionably a subtler commodity.

Customer data quality is a case in point. What is it worth to your business not to misspell your customers' names on their monthly statements? Though 72% of sites see a link between customer data quality and business results, a remarkably high 28% still don't get it.

---

The Name Blame Game

How much does it cost to mail a customer's bill to the wrong address? Or to send seven copies of the same promotional brochure to the same prospect because of duplications in your database files?

Even sites that measure customer data quality don't always look at the entire spectrum of "gotchas." While three-quarters of the sites look at address and name-related errors, only two-thirds look at duplicate customer names or households. Just half the sites look at missing relationship errors, which could overlook the status of a preferred customer, for example.

---

Why Companies Wait To Act

There's always a long laundry list of reasons why companies fail to implement policies that may seem logical to an outsider but never gain currency internally. A lack of management buy-in usually scores high on such lists. Here, blaming management's lack of foresight captured the votes of a mere 13% of respondents. Interestingly, no single problem garnered a majority response among the IT managers surveyed.

Opinions remain divided over whether the problems surrounding customer data quality--or a lack thereof--are due more to a proliferation of individual databases or to the excessive amount of time required to fix the offending processes.


Back to Business Intelligence

Send Us Your Feedback

Top of the Page

---