Ninety percent of senior executives believe that customer insight is one of the most critical tools in their organization to achieve their customer-related objectives. But only 35% believe that they are customer-centric.
These are just two findings of a recently completed Merkle study of over 350 senior executives across multiple industries about how U.S. organizations drive value using customer relationship marketing (CRM).
In order to become more customer-centric, companies are investing more in collection, storage and utilization of data. A common mistake that most of these companies — even the largest corporations — make is investing millions regardless of the vision or use case of this investment. As a result, most companies end up with terabytes of data, multiple technological platforms and multiple customer insight teams and yet can’t utilize collected data in day-to- day operations. This is “junk data” that sits in your database, and creates the “noise” that prevents companies from working with the real “Gold Mine” to create useful/actionable insight — and in some cases results in misled data-driven decisions.
Companies are changing their approach to data and technology investment in order to overcome the “junk data” issue. The focus is now shifting to the use cases (how to make use of data in real life), which follows this flow:
- Value Levers: Identify levers for use case benefits such as increase in conversion rate, improvement in churn prediction model accuracy, improvement in ARPU, reduction in cost per acquisition and more
- Use Case Pool: List all potential use cases that will help improve acquisition, growth and retention efforts or optimize operational efficiency that will reduce cost to serve
- Opportunity Sizing: Identify required cost elements such as costs for set-up, people, consulting, technology, marketing and customer communication and support
- Data/Technology Requirements: Identify and detail high-level data and technology requirements
- Prioritization and 3 - 5 Year Financial Projection: Prioritize use cases based on benefit and cost figures for the next few years
Data-related investments are expected to increase exponentially, so executives will start introducing key performance indicators (KPIs) that are tied to these types of investments, such as return on data (ROD). In order for your company to execute a successful data initiative, you must overcome the misalignment among your objectives and investments and take the corresponding actions that will allow you to get the best and the most out of your investment to achieve your objectives.