The Importance of Your Customer Data Lifecycle
This is a first of a series of articles I will be writing on customer data in business. I'm starting off with a broad scope, but plan on breaking down into how CRM can help in these situations in future articles.
When you think of companies, what do you think of as their most important asset? Is it what they produce? If it the real estate they own? Perhaps their employees, as so many are wont to claim. While all of these might be important, none of it matters without customers. A company’s information on their customers is their lifeline to continued success and profitability. Without it, they have no reliable way to upsell their returning customers. They have no way to follow up and make sure their customers’ needs are fulfilled. Further, loss of customer information can lead to lawsuits and public embarrassment. All told, the data you have on a customer has a lifecycle.
This lifecycle begins when you acquire a new customer. Who is responsible for entering a customer’s data? Does everyone follow established procedure when they enter new information? What is the initial follow-up procedure? Consistency ensures that all future maintenance and manipulation can be done with a minimum of fuss. This is also a good time to ask questions of your new customers. Most will appreciate the attention. As a personal example, I enjoyed a particularly good beer recently, and wrote the maker, Anheuser-Busch asking them to produce more. A couple weeks later, I got a call from them, wanting to know more. They spent an hour on the phone with me, picking my brain about what I like. In the end, they knew a lot about my beer habits, and I felt useful.
The main lifecycle of most customer data is while they are active customers. This is the part that is most obviously critical to a business. How are customers being upsold? What market trends can be gleaned from current sales? When they leave, why are customers leaving? These three questions are closely tied together, and really lead to one determinant question. Are you fulfilling your customers’ needs? Without the answer to this key problem, a company can never truly thrive. As an example, Google’s whole business model is built around getting buyers and sellers together as effectively as possible. Most people think of Google as a search company, but in reality their business is advertising. Their AdWords (and its counterpart, AdSense) product is designed to create an efficient market where companies can bid on commonly used search terms. Between this, and the ROI (return on investment) tools they offer to their customers, Google has built one of the most effective systems in the world of connecting company and customer.
Finally, in its end time, customer data must be secured and stored. Is there a data retention policy in place? What security measures are being taken to ensure that sensitive data is not inadvertently released? What is being done to mine this old customer information? Old data is both a treasure trove and a security hazard. Properly analyzed, old data might reveal former customers that have a need of a new offering you have, or a fixable flaw in why you they are former customers. Flipside, an embarrassing data leak can lead to a company being in the papers for all the wrong reasons. Likely the most famous example is when CardSystems released 40 million credit card numbers accidentally. Charges were even brought against them by the FTC. This kind of loss could even sink a company.
The lifecycle of customer data is easily the most overlooked process in companies today. As it is not a physical, tangible object, many tend to undervalue such information, even though it represents the core of what a company does. After all, without anyone to sell to, what would a business do?
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Tags: crm, microsoft crm, customer data, customer information
Posted by Wayne Walton on Monday, March 17, 2008 2:16 PM
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