Today, teams around the world are using advanced technology to engage in significant efforts to better understand their customers and improve relationships. This enables teams to improve their overall customer experience across multiple touchpoints and, thereby, increase customer retention. Maintaining a solid customer base can help organizations to steadily grow their business, drive efficiencies and attain better business to improve their profit margin.
Understanding MDM and Customer MDM Hub
Customer Master Data Management (MDM) is a critical component to support these efforts. Master Data Management is a technology-enabled discipline in which business and IT teams work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of their enterprise’s official, shared master data assets.
It all comes down to master data – “entity” data about customers, suppliers, partners, products, materials and accounts that is created with each transaction, application, report and decision. Effectively managed and integrated, this data can deliver the insights necessary to improve decision making and drive measurable business success. Unmanaged, it represents a wasted opportunity. Common examples of Customer Master Data include Account Number, Name, Shipping Address, Region and Customer Type.
A Customer MDM Hub (Customer Hub) is a centralized repository of customer information from which multiple applications and downstream systems can pull the most accurate and timely information. A Customer Hub automates the business process of optimizing accuracy and availability of shared customer data with the goal of establishing absolute confidence in data-driven decision-making. Through automated data administration and with the aid of manual oversight, the Customer Hub ensures that customer data is accurate, timely, consistent, and available and can be used to better execute operational and analytic processes.
Four key benefits of a Customer Hub are:
- Accelerate Revenue Growth
- Enrich Customer Insights
- Improve Customer Experience
- Enhance Regulatory Compliance
Accelerate Revenue Growth
A Customer Hub can pull together data from marketing, sales, service and other business areas to provide a 360o view of customer experience. This type of view shows an end-to-end picture of a customer’s experience with an organization. It also provides valuable insights about customer preferences, products, households, channels and relationships. At its core, a Customer Hub centralizes the management and availability of data that is often fragmented across departments, business lines and regions.
By centralizing these master data elements of Customer data, it is easier to identify which customers own which products and where there may be an opportunity to maximize customer spend via offering complimentary products and/or services. A better understanding of the customer—including improved knowledge about their demographics, propensity to buy and relationships—will enable more effective marketing campaigns as they can be more targeted and result in higher response rates.
The improved ability to identify target market segments increases the opportunity to up-sell and cross-sell to the existing customer base. Even a small uptick in cross-sell or up-sell success would result in an appreciable increase in overall sales and revenue.
Enrich Customer Insights
In addition to enabling more, 360o view can drive appropriate levels of service to provide a consistent approach to customer contact and facilitate service levels that reflect the lifetime value of a customer.
In general, a Customer Hub provides the ability to implement customer segmentation-based analytics in a much more efficient and sustainable manner. Rather than using an analytics process to try and rationalize, consolidate and optimize customer information, a Customer Hub creates the golden record that can then be used in multiple business processes, including analytics. Standardized data with consistent definitions and structures allows for fact-based decisions—with lineage and traceability in the sources of the data—instead of relying on an anecdotal approach.
Customer MDM abstracts the data out of siloed function-specific applications and into a consistent, multi-use repository. This new architectural construct makes it possible to have more decentralization and self-service in analytics and reporting. Going forward, Customer MDM becomes essential for executing on an omni-channel customer engagement strategy.
Improve Customer Experience
The 360o view of the customer and their associated relationships available in a Customer Hub are important enablers to improve customer experience across all channels. Because there is easier, faster access to complete customer and sales information, customer service agents can provide more effective and timelier customer service with a net effect of reduced call times (where appropriate) and increased customer satisfaction.
Improved customer information enables the organization, as a whole, to be more proactive in serving customers, leveraging the improved customer segmentation and analysis mentioned earlier. By creating targeted outreach to specific groups of customers, such as chronic problem customers or individuals with negative customer service perceptions, the organization can customize their interactions to improve customer satisfaction and optimize their service efforts.
Enhance Regulatory Compliance
One of the greatest operational challenges is ensuring information about a customer is appropriately shared or not shared in a consistent way across the organization. This is particularly important when complying with regulatory requirements. By storing customer master data in a single repository, it is possible to control the way the customer information is viewed and shared in a more efficient, traceable way.
A Customer Hub provides a single place to store an Order of Protection indicator to ensure that when such an order is received, all aspects of the customer relationship are tagged. This maintains full legal compliance by ensuring that every employee sees the customer information in the same way. Without the central Customer Hub, the potential for an Order or Protection to be inadvertently violated is high and could lead to a substantial financial, reputational or even legal risk.
A Customer Hub is also a central place to control access and visibility to sensitive and personally identifiable information (PII). Creating access rights or masking this type of data in the Customer Hub ensures that data classification standards are maintained across the company, rather than trying to update and manage every application that houses customer data independently.
Housing customer data in a centralized Customer Hub improves the ability to consistently comply with regulatory standards, rather than trying to embed data classification standards into every application and every business process independently. This reduces both the risk of non-compliance and the cost to comply with regulations.
The Business Case for a Customer Hub
Overall, the implementation of a Customer Hub creates a great opportunity to improve productivity, reduce costs associated with redundant and inaccurate data, and establish a foundation for future growth and innovation. A Customer Hub is a secure environment where oversight and operations of core data attributes can be governed and shared across all processes and consumed throughout the organization.
Ultimately, this will enable a single version of truth that is more reliable, sustainable, and accurate — that can be used across a diverse set of systems, business segments and user communities.