HOW WELL DO YOU REALLY KNOW YOUR CUSTOMERS?

Knowing your customers sounds like a simple task, yet with an ever growing amount of data available, customers having several email addresses, mobile phones and social media accounts, compiling all this data is no easy feat. Managing Director at Granger Smith Consulting, Simon Smith, takes a look at the benefits to achieving a single customer view and the barriers to success.

In the financial world it’s imperative for companies to have a transparent picture of their data to ensure they not only comply with FCA regulatory requirements but to also ensure customers are treated fairly.

Being able to link your customer data across different channels and lines of business ensures financial institutions have an accurate view of their customers. Sounds simple? Yet many organisations have inherited several systems, and merged systems over the years. Therefore, making it difficult to take various data sources and feeds and compile these into a main customer database.

We recently hosted a single customer view roundtable for peers to share and discuss best practice; one delegate provided an example from experience within one of the largest global banks. One of the areas of focus revolved around customer card protection policies. By achieving a single view of its customers the bank saved over £30 million in its first year of implementation. The saving was achieved by allowing the bank to be more effective and targeted in its marketing campaign.

By knowing what your customers require, which products they hold with you and what additional features they are entitled to, allows much more effective communication. It provides the insight for organisations to offer the correct products, to the right people, at the right time. Not only does this ensure customers are treated fairly, it helps ensure the relationship between the financial institution and its customer stays intact. For example, offering a low interest rate on a loan or a zero per cent balance transfer on a credit card which that customer isn’t eligible for, yet still applies for and is consequently turned down, can leave the customer feeling miffed and unhappy.

What was clear from the roundtable discussion was that a single customer view provides real value, based on gaining a full picture of the customer; from the products which they buy right through to achieving an understanding of their lifestyle habits. Thus being able to understand what customers want, why they want it and what potential products could be upsold in the future.

In terms of marketing, this knowledge is golden. Being able to eliminate customers from a marketing campaign; say for example that already own that product, saves both time and money.  It also shows your customers that as a business you understand what products your customers have and that you know them.

What really is important to address is that achieving a single customer view alone is not the key to success, knowing what you want to achieve from having it is what will bring true value. One participant said: “Many would see the benefits of a single customer view as self-evident and may therefore embark upon building a system without thinking in detail how it is going to be used.”

It is also worthy to note the difference in opinions from the participants around which stage the IT team should become involved in the project. Several would prefer to involve the IT team at a later stage in the process once they had decided upon their objectives whilst other felt strongly about introducing IT at the outset would be most preferable.

Our experience would show that there also seems to be some confusion around who should and does own the single customer view project. Data quality also plays a big part in its success, though it should not be a barrier to starting a project.

Other constraints identified, included:

• Lack of executive sponsorship
• Lack of data stewards
• Company culture
• Data Quality
• Third party ownership or control of data
• Lack of data and analytical skills

Gaining a single customer view has many business advantages. It improves the communication between customer and business, the additional insights can improve strategic decision making and improve overall business efficiency.