Manage Learn to apply best practices and optimize your operations.

CDI: The CRM dance every marketer must learn

...the real value comes in devising an effective customer data integration (CDI) strategy...

Lessons In Loyalty

Think of the customer as a dance partner. Succeeding at CRM is sort of like learning, and then using, all the dances the customer knows, when and how the customer wants them to be used.

If you're a supplier, you'll quickly discover that the customer doesn't really care if you know the Lambada if he wants to dance the Lindy. The only thing that counts is having sufficient awareness of every dance and step in the customer's repertoire, and then responding to (and anticipating, if possible) the customer's step patterns for each. This is equivalent to a customer database and database application. The customer database is a repository of all the steps. Database application is knowing when and how to use them.

Take ScrubaDub Car Wash, a chain in Massachusetts and Rhode Island. To increase use of, and expenditures for, its services, it began putting a bar code sticker on every car's windshield the first time customers visit. That helps the car wash identify customers by name and purchase/usage history each time they drive in. ScrubaDub updates those profiles with occasional questionnaires. It then uses its extensive database for marketing and promotional purposes.

As a result, ScrubaDub knows its customers' dance steps and can shimmy with its chammies to get cars clean and keep customers happy -- and profitable.

That naturally brings us to an often ignored element of the dance: CDI, or customer data integration. CDI isn't just another acronym consultants dredged up to confuse everybody. This is where information from the data sources -- all the steps from all the dance styles -- is brought together to create a single, integrated view of the customer. In surveys, Forrester Research has found that while 92% of companies say having an integrated customer view is critical or very important, only 2% have fully achieved this and only 10% have even partially met this goal.

The problem is that even with faster computers and better processing methods, CDI technology hasn't really evolved much in the past 15 to 30 years. Most companies, large and small, are still using traditional merge/purge technology for customer segmentation. Related problems are data quality and completeness, the accuracy of both content and grouping (customers and activities), and the speed of data access. After all, if a company makes the effort to obtain high quality customer data, but it takes weeks or months to pull it out of the system to formulate programs, how effective can the efforts be?

Some companies, however, have solved -- or, at least, are solving -- the complexities of managing CDI. The Royal Bank of Scotland is a good example. It was profiled briefly in our latest book, Customer WinBack, but it's gone well beyond its early value-centric relationship programs with good customer data and good data management integration methods.

Royal Bank has 3.3 million customers, so there are definite scale challenges. Through advanced customer research techniques and integration methods, it's found that its customer base doesn't break out into explicit segments. As a consequence, it's modified one-to-one approaches to build customer groups from an individual basis. Its head of marketing operations, Ian Wilson, has said: "We think customers fall into groups for certain things but can be in more than one group at any one time."

Royal Bank has used a software solution that enables its marketers to execute personalized, multi-channel offers to individual customers. First, it tests creative material on representative customer groups. When trigger criteria have been met, it can send out a print campaign to relevant customers within 48 hours. Three or four years ago, most of the bank's mailings were to 300,000 or more customers per program. Now, the average print run is 20,000. For event-driven promotions, it can include as few as four or five people in a mailing.

Wilson has found that the most relevant and timely campaigns can elicit response rates of 75%, or more. He's concluded: "We are trying very hard to move from a traditional product push to a customer-requirement approach." The success depends, absolutely, on effective CDI. Royal Bank knows customers' dances and steps, and it's making the most of this insight.

Other marketers would profit by following its lead.

Share your feelings on CDI with us. What are the best approaches? Sound off in our discussion forum.

Michael Lowenstein is managing Director of Customer Retention Associates, a customer and staff loyalty program development, research and consulting firm located in Collingswood, N.J. He has three decades of experience in customer and staff loyalty research and has written several books, including Customer Retention: Keeping Your Best Customers, The Customer Loyalty Pyramid and Customer Win-back: How To Recapture Lost Customers - And Keep Them Loyal.

Dig Deeper on CRM strategy and implementation

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.