"Knowing your customer better identify his needs and enables marketers to direct sales accurately to best fill them and maximize profit. It is the essence to a successful business," said Yousef Hamidaddin, CEO of Acxiom MENA, at a press briefing in Jeddah to share Acxiom Corporation's report – White Paper – on the historical challenges of gathering accurate customer data. It introduces Acxiom's new generation of solutions to overcome them. A summary of Acxiom's findings follows.
Data quality on customer profiles is central to producing accurate metrics for marketers. Lack of accurate data leads to poor campaign outcomes and leads to wasteful marketing expenditure.
Product commoditization forces marketers to add value through services and branding and marketers need a comprehensive view of their customers and prospects. With behavioral and life stage insights, financial information and communication preferences, marketers can customize their campaigns. The accuracy of these insights enables marketers to segment and market to the most profitable consumer groups.
The leading questions are: What level of data is 'enough' and is there an effective way to increase current data quality?
The advent and advances in the use of mobile and on-line communications has produced new challenges. For example, electronic addresses change more frequently than physical addresses. Thus the modern fluidity of the market requires flexible techniques to be accurate.
Marketers face four main challenges that stem from poor quality data:
Consumers are transient – change in status happens continuously. Errors in data entry compound the problem. Up to 25 percent of data can decay in a year and a five percent inaccuracy in data can yield a 45 percent rise in operational costs.
Misguided decision making
Data is necessarily historical and not absolutely current and has some inaccuracies that lead to misinformed decision making.
Loss from fraud
High incidence of fraud may cause companies to become unable to eliminate high-risk consumers from their lists. Companies subject to fraud might experience a negative impact on their brands.
Consumer privacy laws
Adherence to national privacy laws is essential to minimize exposure to fines and negative PR. Yet the companies must be able to contact the consumer successfully.
History of Data Gathering
Ensuring accuracy of data has historically been labor intensive and expensive. The introduction of the National Change of Address (NCOA) data-base by the US Post Office in the 1980s introduced a standard process for cleansing addresses.
Through the mid-1990s, marketing companies built intelligence around the NCOA to create systems that overcame the problem of invalid addresses. By using data from many sources, marketers improved targeting accuracy that enabled higher revenue and profitability.
In 2005 master data management (MDM) solutions arrived in the shape of a central data repositories to feed the data silos within a company. MDM was expected to centralize data quality, reduce costs and create better long-term data accuracy. The combination of intercompany politics and high complexity created MDM failure rates of nearly 60percent.
Next-generation data quality solutions proactively identify and correct inaccurate consumer records. They are transforming data quality from a cost center to a profit center by enabling more efficient targeting through direct mail, telephone and digital channels.
How it works:
Strategic marketing companies with access to comprehensive consumer databases, third-party data sources and powerful computing resources act as clearing houses for accurate consumer records globally.
Three elements combine to enable this:
Knowledge base repository:
Intelligent data warehouses apply complex rules to link and accurately update customer records from multiple outside data sources with historical sources to provide a high degree of accuracy. As the knowledge base adds more rules, it becomes more accurate.
Online and offline data linking:
A digital linking system helps to ensure that email addresses are correctly matched to customer records. By cross- referencing consumer records with previously used email addresses optimizes contact rates, responses and resulting revenue.
On-demand options allow marketing and IT to integrate data quality checks with enterprise applications. Customer records are instantly updated to help ensure accurate information for each customer interaction.
Next-generation data quality solutions affect the bottom line by delivering the most accurate consumer profile. They often provide many benefits beyond basic standardization, including:
• Reduced marketing waste by elimination of redundant contacts
• Improved profitability by delivery of the best- performing offers to the most receptive customer.
• Increased cross-sell and up-sell effectiveness by targeting consumers with the highest expected lifetime revenue
• Improved business intelligence and analytics by linking of current customer behavior and past purchases into a single customer profile.
• Reduced operations expense by minimizing burden created by manual processing of bad records.
• Reduced fraud and risk exposure caused by deliveries to unintended recipients.
Essential characteristics of a New-Generation system
• Integrated solution: Ensure that each component is designed to work with others in the solution.
• Ability to span online/offline: Look for a partner that manages both online and offline consumer data.
• Rules-based approach: A solution that follows a rules-based approach to correcting data ensures the system becomes increasingly accurate.
• Global footprint: Ability to handle language and address requests to countries that matter most to your business.
• Speedy processing: Best-in-class solutions process at least 10 million records per hour.
• Easy integration: Make sure the solution offers straightforward integration with existing call center and CRM applications.
• Address linking: Ensure the solution provides accurate contact linking enabling you to combine all insights of a customer's life into a single comprehensive view.
• Privacy compliance: Full operational understanding of national privacy regulation.