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Customer Relationship Management (CRM)

Field concerns and data collection: customer data integration

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History and theory: customer relationship management
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Customer Data Integration (CDI) enables an organization to accrue knowledge about the customer, a
necessary antecedent for an effective CRM strategy. CDI allows for the creation of a consolidated
view of the customer from multiple customer data stores. All customer touch points are linked, and
CDI continuously accesses and upgrades customer information. While most organizations believe that
a single, integrated view of the customer is critical, only a few currently have this. The word "customer,"
used throughout this discussion, applies to prospective customers (i.e. prospects) as well as
inactive former customers.

There are a number of challenges facing organizations as they attempt to create the single customer
view so critical to CRM. It is necessary to consolidate and resolve the problems resulting from:

  • Disparate databases,
  • multiple touch points,
  • departmental disparity,
  • dissimilar applications, and
  • inconsistent customer data.

Figure 1 is an organization/consumer marketing information flow diagram. At the bottom, a consumer
can call the organization, can access the organization's web pages or communicate via traditional
channels such as the mail, point of sale (POS) transactions, surveys, returns, warranty and any other
batch communication.

Data Flow Environment

Figure 1: Data Flow Environment

  • The Operational Data Store (ODS) icon represents a database that is designed to allow for quick
    read/write access and contains that information required to process a typical customer request either
    via the Web or inbound telemarketing.
  • The data warehouse (DW) icon represents a database that contains all relevant customer (primary
    and secondary data) information including history, product information, and product return activity,
    marketing promotion and campaign data.
  • On the right side there are a few sample Data Marts shown. A Data Mart (DM) is a smaller database
    and is a subset of the DW. It could be as small and simple as an Excel Spreadsheet. It is
    generated from data gleaned from a specific function. Marketing may be running a campaign targeting
    inactive male customers for a specific promotion. They would download all relevant data
    into a DM, which is accessed from software conducive to their activity, such as Campaign Management
    Software. On the other hand, Legal may want to monitor or analyze all customers who
    purchased a particular line of products as they research liability issues. Therefore, the organization
    on the right side of the diagram uses information to analyze and communicate with the customer.

The customer responds via multiple channels. All responses allow for data capture and must be processed
and loaded back into the DW. The cycle continues.

CDI is the process of managing the customer response or activity related to all possible touch points.
Specific CDI steps are as follows:

  • Identify touch points,
  • Set up data collection business rules,
  • Define input process logistics & data conversion rules,
  • Perform Address Standardization,
  • Perform Address Correction,
  • Perform Postal processing (NCOA in U.S. for change of address),
  • De-duplication (Loose/tight), data enhancement, data suppression, data consolidation,
  • Update process logistics regarding ODS or DW. Address and Postal processing is country dependent.
    The process ensures an address (regular mail or e-mail) is deliverable and is the most upto-
    date. Data collection business rules determine what information should be captured and what to
    do when duplicate types of information come in from different sources (See figure 2).

    Consumer Data Construction

    Figure 2: Consumer Data Construction

Rules can be set in a variety of ways and are dependent on the respective business situation. A source
may be listed as a priority source and no matter what the results for other sources it would be used as a
result. This could be an example of a trusted primary data capture source. A consensus, or majority
rules may also be used when there is not a trusted source.

De-duplication is a critical step. This is where we tie individuals and households together. A business
may be looking at building a relationship with the entire household or trying to understand the household
life-time-value. Or one may be looking at the individual separate from the household. Each individual
would be assigned a unique identifier. Each household would also have a unique identifier.

Therefore, a person would have two identifiers their own individual identifier, as well as their household's.
There is software available on the market that supports this effort and companies that provide
this as a service.

DE-duplication is critical to understanding who the customer is, which supports the CRM effort.
Once identified, secondary data can be applied to the primary data for an enhanced customer profile.
This enhances the CRM effort as an organization expands the customer profile. One must also suppress,
usually for privacy or regulatory reasons, certain information from use in any future marketing
activity. One may still maintain the data for analytical purposes but may not be able to use it for the
basis of any communication. Data consolidation is the process of aggregating data in support the DW
update process.

The sales function has been in a rapid state of change since ERP made obvious the need for coordinating
all information resources of a corporation. During the last years, sales automation was seen as a
means to improving business. Many sales forces adopted new management tools to gather information
and direct the sales effort in a more prescribed manner. A number of industries took the lead in these
efforts: financial services, consumer credit, computer software, grocery and the automotive industries.
The new automation tools they employed ranged from complete software suites provided by Siebel
Systems, E.piphany and SAP, to tools provided by niche providers like Oracle that built a reputation in
sales configuration software. Other key niche participants are Pivotal and Onyx, producers of Direct
Sales and Partner Relationship programming. While these new sales tools improve operational efficiency,
the cost is high. In addition, they did not address the dynamics of how the sales function
should best address changing customer needs.

Sales Automation is the deployment of a variety of technological tools that enable companies to better
organize, manage and compensate the sales force, as well as forecast sales, based on more timely and
accurate information. Applications being used in industry today link the sales function directly to rest
of the enterprise. This results in greater availability of data pertaining to customer relationships, purchasing
habits, purchasing organizations and buying patterns. Base system configurations; e.g., Siebel's,
allow clients the luxury of improved inventory visibility, better sales history, more accurate control
of expenses, portability of information and the ability to access customer information on an almost
real-time basis.

The new software suites provide for better sales coverage, more productive sales calls and enterprisewide
involvement in sales, resulting in a more highly motivated sales force. Mobile applications for
sales automation range from paging and wireless messaging to data replication at customers' locations.
Software packages afford sales managers the ability to conduct e-briefings, define quotas and goals,
track performance and provide customer credit information in expeditious fashion. Nearly all agree
that the new sales automation tools have made the sales function more responsive. At issue is whether
the sales function, even with these new tools, adds value to the distribution of products today?

CRM and customer-centric thinking has created the need for a change in the role played by the sales
function. The customer focus that organizations have adopted has created major changes in the evaluation
of what value the sales force provides today. The purpose of a sales force is to add value to the
distribution of products. Today, value is defined by customers and not by organizations. The traditional
role of sales has been to communicate the value of company's products; but for the sales force
to be the sole communication link in business today is no longer practical or advisable.

The challenge for all business functions is to create value. How then can sales deliver on that objective
in today's business environment? The sales function must exist to solve customers' problems at everreduced
costs. In order for the sales force to become problem solvers, however, requires that customers
and prospects "buy into" their revised role.

Customers have three basic needs that should be satisfied by any organization's sales force: (1) They
require product, promotional and price information. (2) They require help in the use of the product and
(3) They require a partnership with the selling company to create a product. The needs can be typified
as transactional, consultative or partnership requirements.

In the first instance, where only information is required, sales can create very little value that other
communication tools couldn't provide at a lower cost. The web, catalogue or advertising would be
more efficient in providing this customer support. The second need is perfectly suited to CRM and
requires that the sales representative provide customized solutions regarding the use of company products.
The partnership need requires the sales force to become the customer's advocate within their own
company. This last need is, once again, perfect for CRM, as it requires intimate knowledge, cooperation
and team building to ensure company success. While it would be easy to say that these various
requirements are industry specific, they are not. In fact, customer types vary within industries.

While sales automation may provide a competitive advantage for businesses today, it will be a requirement
in the near future. Organizations that aren't ready to change will not be able to compete in
the more competitive world of CRM.


  1. History and theory: customer relationship management
  2. Field concerns and data collection: customer data integration
  3. Issues regarding communication and CRM: social issue, consumer privacy
  4. Future of CRM: future, customer relationship marketing, McKinsey study