Marketing professionals have always recognized the importance of customer information. In even the earliest computer systems, data entry operators keyed in data that identified the details of each sales transaction - which customers bought how many of which products. The availability of this detailed data enabled the preparation of sales analysis reports such as sales by customer, sales by product and sales by salesperson, etc. When computers entered the picture, the same detailed recording was continued, using magnetic tape and disks.
Companies have thus long recognized the importance of gathering detailed
data for the purpose of producing information that enables them to develop marketing strategies.
Today, marketing managers make use of information technology that goes beyond that of magnetic tape and disks. Sophisticated hardware and software technology have enabled the retention of massive files of in-depth data for long periods of time in a data warehouse.
Elements
For the purposes of this introduction – we will assume that information technology (IT) and customer relationship management (CRM) have three key elements, namely customer touch points, applications and data warehouse.
Customer touch points: These are vital if your business has a marketing orientation and focuses upon the customer’s present and future needs. This is the interface between your company and its customers. For example, a prospective customer wants to buy a new TV from one of your dealers and enters his showroom. The dealer is the first contact point. The potential customer meets with a salesperson who demonstrates the TV. The salesperson is another contact point. The prospect goes home and looks at your website and also the TV manufacturer’s website and then sends the company’s customer care unit an e-mail requesting few clarifications. All three are contact points.
There are number of other contact points before and after his purchase.
There are two reasons why you must understand touch points: (1) A service breakdown can happen at any touch point, resulting in loss of customers and (2) Analysing touch points will help you recognize where you ‘add value’, which means, attracting and delighting customers.
Understanding both of these issues and exploring how to manage every touch point can improve your company’s sales turnover. Having long periods of sustained competitive advantage no longer applies in our technological era and with fewer and fewer touch points, where a human being is involved, service has to be great! Customers are still analogue – not digital beings – and they want great and quick service. However, in Sri Lanka, training budgets have been cut to the bare bones and although companies ‘build’ things to improve a touch point, they often don’t train their employees how and why they did it or even how to implement it.
A modern minimalist display and remodelled storefront may look great: ‘re-branding’ with new logos and website may revitalize things to a degree: but if employees don’t understand ‘why’ in context of each touch point, they will continue to do the same thing or ignore the way the new concept was meant to interact with the customer. Exploring touch points is where ‘things’ meet ‘people’.
Applications: These are essentially the software and programmes that support the process. Incidentally, this is what some would call CRM – but now we know better. Applications serve marketing (e.g. data mining software), sales (e.g. monitoring customer touch points) and service (e.g. customer care).
Data warehouse: This possesses-consolidated historical data which helps executives to analyse the business and organise, understand and use their data to take strategic decisions. There is no frequent updating done in a data warehouse.
An operational database consolidates current data. It is constructed for searching particular records, indexing, etc. It supports concurrent processing of multiple transactions. While operational database query allows to read and modify operations, data warehouse allows read only.
Key features of a data warehouse:
Subject oriented –These subjects can be product, customers, suppliers, sales, revenue, etc. A data warehouse focuses on modelling and analysis of data for decision-making.
Integrated – A data warehouse is constructed by integrating data from heterogeneous sources. This integration enhances the effective analysis of data.
Time variant – The data collected in a data warehouse is identified with a particular time period.
Non-volatile – This term means the previous data is not erased when new data is added to it. A data warehouse is kept separate from the operational database and therefore frequent changes in operational database are not reflected in the data warehouse.
Three main types
Information processing, analytical processing and data mining are the three types of data warehouse applications that are briefly discussed below:
Information processing – The data can be processed by means of querying, basic statistical analysis, reporting using tables, charts or graphs.
Analytical processing – The data can be analysed by means of basic OLAP operations, including slice-and-dice, drill down, drill up and pivoting.
Data mining – Data mining supports knowledge discovery by finding hidden patterns, constructing analytical models, performing classification and prediction.
Value addition
If you are a divisional or departmental manager, it may be a good idea if you do the following exercises one in every three months:
Get a whiteboard and define all customer touch points with your senior executive team,
Note possible service breakdowns, List reasonable solutions for items that could be proactively corrected and
List solutions for those service breakdowns that are out of your control (what is called ‘one-offs’) and work with suppliers to see if they can or will provide a fix.
Also look at customer touch points for ‘value-add’ opportunities; they are often very cost-effective. Finally, never lose sight that your goals in every customer touch point are to: (a) exceed expectations, (b) delight the customer and (c) minimize disappointment.
However, a note of caution is due here! What used to delight becomes the norm very quickly. So be on the lookout to ‘create new value add or wow moments’ and keep your promise.
Data management
In the modern world, hardware and software vendors have developed special database software to manage the data once it was in storage. The software that maintains the data and makes it available for use is called a database management system (DBMS). Currently popular DBMS examples are DB2, Sybase and Oracle for larger computers and Microsoft Access for smaller ones. Some data warehouses are managed by specially developed warehouse management systems.
Management and control
Since the database or data warehouse represents a valuable resource, steps should be taken to ensure that it is not misused and that it is always available for use by authorized users. Data security can be achieved by use of passwords and supplemented with directories that specify the operations that particular users can perform. Knowing that hardware, software and human failure can inadvertently damage or destroy the database, the management and control component can create backup files and perform recovery operations. These abilities are usually part
of the DBMS for large-scale systems information delivery.
Information users
Interest in CRM spans the entire company and CRM system users can be found at all company levels, from the chairman to sales clerks. Executives can use the system in formulating corporate strategies involving the company’s customers.
Everything about CRM is information technology-driven. Technology is pervasive from the basic user-friendly interface to complex back-end database and knowledge management systems. Sales executives or customer service personnel can access this data via the World Wide Web, an extranet relationship with a corporate partners or an internal corporate intranet.
(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at lionwije@live.com)
