"I've learnt that people will forget what you said, people will forget what you did, but people will never forget how you made them FEEL." - Maya Angelou
Firms have realized that building customer intimacy is the key to success in the digital world - to sell more, to endear themselves to customers through excellent customer service, to gain insights into what customers want, and to determine what new products should be introduced. To gain customer intimacy firms must gain a 360-degree view of each customer - not just their personal information, but every aspect of their interaction with the firm.
Customer data is typically siloed, with no clear identification of the system-of-record. Individual components of customer data - people and organizations (e.g., email, addresses, phone number(s), unique identifiers, name(s), partner or spouse information, household data, transaction data, interaction data, etc), reside in various systems or data stores. In this article, I'll discuss six steps that firms can take to enable customer-centricity by building a customer hub.
Regulatory Compliance - Another Driver for Customer-Centricity
The Global Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA) are relatively new regulations that have been introduced to ensure that firms can account for customer data and protect sensitive data related to customers. Mastercard recently rolled out a Data Responsibility Initiative - which encourages firms to start designing systems with the individual (i.e., customer) at the center.
GDPR and CCPA were designed to let consumers learn about what data firms have about them, whom they have shared data with, and to give consumers the option to request the deletion of their data. In order to comply with these regulations, firms have to inventory all customer-specific data that they own and tag and protect sensitive data such as personally identifiable information, financial information, and any other data that if compromised could result in financial, reputational, and legal risks for the firm but also significant impact to the customer.
6 Steps to Customer-centricity
Step 1 - Define "Customer"
Gain consensus across the various lines of business (e.g., Finance, Risk, Technology, Operations, Marketing, Sales, etc.) on a single definition of the customer so that everyone across the firm understands what it is. Since each line of business views customers a little differently, I recommend that you also develop "customer facets" to reflect this delineation. Facets will help associates from the lines of business that actively use and analyze customer data.
Step 2 - Capture critical data fields related to a Customer
Rationalize the various customer-related data fields used by the lines of business to capture those that are most important to support business functions.
Step 3 - Tag each critical data field with its system-of-record
Engage subject matter experts to identify the system-of-record for each critical data field related to the customer.
Step 4 - Discover and Profile Customer data across the Data Ecosystem
Use a third-party tool to discover customer-related data across the data ecosystem (starting with the systems of record), profile the data to assess its quality, and tag the sensitive data fields.
Step 5 - Develop rules for Identity Resolution and Merging Data
Typically, there is a significant amount of data redundancy and data duplication across systems. A third-party tool can be trained to resolve the identity of individual customers and merge fields from various sources to create a master record.
Step 6 - Build a Customer Hub
Ideally, firms must build a customer hub to store a 360-degree view of each customer, by ingesting data from various operational and transactional systems.
Customer-centricity is a pre-requisite for firms that wish to increase customer intimacy, drive better customer experience, and comply with GDPR & CCPA.
In this article, I've discussed six steps that firms can take to build a customer-hub, which will provide a 360-degree view of each customer. The data in the customer hub can be used to gain insights into a customer's purchasing behavior, responses to marketing campaigns, specific product and service preferences, lifetime value, up-sell and cross-sell opportunities and a whole host of other powerful insights.
Given the silo-ed nature of a firm's data ecosystem, the high volume of data, and fragmentation of customer data across various application repositories, building the hub would require one or more third-party products that can automate the discovery and profiling of customer data, the auto-tagging of sensitive data related to a customer, identity resolution to create master records, and publishing of API's that various applications can use to validate customer data and add/update customer data.
There are several products available in the market that use artificial intelligence and machine learning algorithms to automate the tasks mentioned above. In addition to the tools, new processes and procedures will be required for each of the six steps described above.
About Jay Zaidi:
As the Founder and Managing Partner of AlyData, my team and I help CXOs drive out-sized business outcomes from their data assets — through our CDO Advisory, Data Governance, Data Risk Management, and Insights consulting services. We've developed proprietary frameworks and methodologies for data risk management, data governance, and data quality - which enable us to deliver high-quality solutions faster. To learn more or get in touch, visit http://www.alydata.com.