Using customer information effectively.

• Author: Chettayar, Krishna
• Position: Data Management - Column

Many corporate structures today focus on product management as the key to revenue growth. Yet product sales are only one means, albeit an important one, to attain revenue objectives. Providing for customers' needs and/or desires is a common-sense business practice that often eludes even seasoned executives.

In reality, the customer is a company's only strategic asset. Selling products and services is simply a means to an end. Calculating the long-term value of future returns from the customer supports this notion. Additionally, this exercise leads to a simple conclusion: customers provide the revenue stream, not the products. Thus, providing the proper solution set and service level to each customer becomes today's challenge, and product management is only the catalyst.

Customer relationship management (CRM) strategies support efficient growth and have become a focus for many businesses. CRM emphasizes customer satisfaction, and rightly so: It is a generally accepted axiom that it costs 10 times more to get a new customer than it does to keep an existing one. Moreover, anecdotal evidence suggests that companies focused on their customers are achieving higher growth rates than competitors who aren't.

However, many CRM projects fail. There are many variables that can contribute to failure, but some critical ones appear more salient than others. In particular, one key differentiator between success and failure in CRM is customer information management (CIM).

CRM and one-to-one marketing strategies are completely dependent on the underlying information source and its quality. Storing and managing customer information such as products or services purchased, time of purchase, method of purchase, purchase history, requests for service, complaints and third-party demographics form the foundation for interfacing intelligently with a customer. Customer information becomes a competitive advantage in a marketplace of myriad communications and parity products.

By leveraging CIM, management can control the necessary information resources and make confident decisions on issues relating to the customer or business activity. However, effectively wielding and managing information is still very much of a new discipline for many corporations.

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