Outsource Magazine

Most companies gather a wealth of information about their customers.  Data from transactions, loyalty schemes, customer service interactions, enquiries, web forms, newsletter registrations and other sources provide rich detail on consumers which can be used to strengthen relationships. The challenge for many firms, however, is the struggle to pull together data obtained from different sources within the organisation so that any department, office, or other type of business unit can tap into all the information available.

This challenge is made particularly difficult if a company outsources some, or all, of its data collection, storage and analysis to one or more external providers not properly linked to each other or to various parts of the firm itself. If an organisation is unable to use its information assets to best effect because data management is disjointed, the service to the end user is compromised and the point of outsourcing in the first place – to save business costs – is negated by the fact the brand appears unfamiliar with the needs, and even history, of its own customers.

Recent research by Transactis demonstrates the negative impact this can have on the bottom line for many businesses. The survey of 2,000 UK consumers reveals the vast majority would cease accepting communications – and are extremely likely to take their business elsewhere – if continually sent irrelevant offers by a company they have entrusted their personal details to. Yet this is exactly what is happening to many firms, especially if they have failed to efficiently link outsourced data functions with internal operations and as a result find themselves with an enormous amount of unorganised, unutilised, and unusable data. When customer data is kept in silos, at best the situation leads to untapped potential but, at worst, it can result in poorly targeted marketing messages which alienate consumers and, potentially, cost a firm business.

This failure to use valuable customer information can be dubbed ‘data wastage’.
In all parts of the survey, the vast majority of consumers indicated that data wastage has uncompromisingly negative consequences for their continued relationship with firms who ignore or mishandle the information they hold. More specifically, when asked what they would do if a company continually sent irrelevant communications despite the fact they had provided information which should have averted such mis-targeted  messages, an overwhelming 88 per cent of the UK consumers surveyed said they would not provide any further details on themselves.

Furthermore, 86 per cent of respondents said they are ‘very likely’ to withdraw permission for a firm to contact them further if they keep receiving irrelevant messages. Similarly, for those firms who do outsource parts of their data collection to suppliers who do not necessarily have access to other information held within the firm, it might be worrying to hear that 81 per cent of respondents would seriously question the capability of an organisation who ask for their details when they have already been provided. Thus, while effective, on-target communication can strengthen a company’s connection with its customers, when a firm fails to employ all the available data to inform messaging, its reputation and relationship with consumers is put at risk. And the reduced availability of data makes rebuilding ties and exploiting new opportunities with customers even more of a challenge.  

Perhaps most disquieting for companies struggling to integrate and make the most of their data is the alarming 80 per cent of consumers who indicated they would ‘very likely’ shift their business to a competitor if information they have previously supplied is not used properly to provide well-targeted and appropriate offers and communications. This clearly indicates that consumers don’t simply want unfiltered, mass-market sales materials directed at them, but prefer to receive highly personalised communications and offers which reflect a company’s knowledge and understanding of their needs.

Consumers today expect a personalised relationship, characterised by relevant communications based on knowledge of previous interactions and preferences in terms of products, channels, offers and timings. But this cannot be achieved if information is collected by, and stored in, separate divisions, departments or companies that do not cop. On the contrary, it wastes the data at hand, wastes the opportunity to connect with customers, wastes cost savings achieved by outsourcing and, most terminally, can result in wasted marketing spend and lost profits. There is no point collecting data simply for data’s sake, nor is it worthwhile outsourcing the collection of all sorts of customer information for storage elsewhere if it cannot be shared and used by anyone in the business who might benefit from it.

Effectively managing and using consumer data is therefore vital to any company’s efforts to communicate with customers and deliver the products – and user experience – they want.  Having a 360-degree view of the customer is essential to avoiding data wastage and forming the type of positive customer relationship that provides a foundation for lasting consumer loyalty. The key is to break down data silos and build a ‘single customer view’ database to be used to inform all interactions with the consumer.

By ensuring all information is stored in a ‘single customer view’ database – even if the data is managed by an outsourced specialist – these silos can be avoided. This approach to data management makes for easy and efficient access by all business units dealing with the customer, so their activities are properly informed and coordinated. And important external partners or suppliers involved in marketing and customer relations – for instance, an outside provider managing a loyalty scheme – would also have to be tied into the database. The knowledge and understanding that comes from the analysis of customers allows companies to develop offers and rewards which resonate with the needs and expectations of their customers.  Moreover, being able to identify the most profitable and loyal customers ensures firms focus resources on these consumers.

Pulling all an organisation’s data together in one single database enables the firm to take a more informed approach to prospects; firms can then profile the most valuable customers and use that information to identify look-alikes to target with new business campaigns. Similarly, analysing trends helps inform product development and services, invaluable in determining what more a firm can provide to attract new customers and sell them the right package.

Having one platform able to profile, segment and enhance data – coming from both outsourced and internal operations – ensures companies make the most of the intelligence and insight available, allowing them to generate more efficient marketing communications and improved capabilities for many other activities critical to business success. Indeed, if customers see a company using their data to provide good products, relevant and timely communications, and an efficient service, they are more likely to trust that firm to continue gathering, holding and making use of their information for the long term.

About the Author

Peter Thompson is Commercial Director at database marketing and consumer insight company Transactis, responsible for leading the commercial growth of the business. He identifies and pursues all opportunities for client development, and ensures all products and services developed by Transactis are focussed on solving real business issues for clients. Thompson has over 20 years' experience leading sales and account management teams in the advertising and marketing sectors.