Most thought-leaders agree that data provides the foundations for successful CRM. However, identifying and harvesting the right data – capable of delivering competitive advantage and hence stronger profits – demands the creation of an effective data strategy.
We’ve developed a five-stage process to deliver such a strategy:
What’s The Vision?
- Having a clear vision of what you want to achieve is as essential for effective CRM – and the data strategy that will underpin it – as it is for any other transformational activity. Look at your overall business plan and ask yourself how a more tailored, personalised relationship with individual customers will help you achieve your goals.
- Do you have a vision for how you’ll acquire, serve and retain your most profitable customers in the future? Can you picture how you’ll do this more effectively than your competitors? If you can, you’re in a great place to consider how data can help.
Turn The Vision Into a Strategy
- There are inevitably many variables that describe your interactions with customers; when and where they buy from you, how often they shop, how much on average they spend, which touchpoints they favour – the list can quickly become long and confusing. This is where analysis leads to the development of a clear strategy.
- Invest the time to determine the ‘sweet spot’ that describes your most profitable customers – at its most basic, what are the characteristics of the individuals who exhibit the most desirable buying behaviours? Understand this and you’ve got the basis for a simple yet immensely powerful strategy.
Define What Data You Require
- Now categorise the individual bits of data you’ll need to harvest in order to make the strategy sing. Let your analysis guide you – if customers in their forties spend twice as much at half the cost to serve as customers in their twenties, then collecting the age range of new customers identifies itself as a key component of your data strategy.
- There are two golden rules to follow in setting your data definitions:
- Focus first and foremost on the data you can only obtain by directly asking customers – for example, there’s likely to be numerous commercial data suppliers who can append details such as customers’ estimated household income, but only the customer themselves can tell you specifically which competitor products they already own. A customer’s time is a scarce and valuable resource; they’re likely to only periodically give a few moments to tell you about themselves. Use your data strategy to ensure you make the most of this time.
- Be sure to understand and embrace data protection legislation. It may not be the most exciting component of your data strategy, but it’s the part that will ensure your organisation avoids a significant fine. If you collect any personal (i.e. addressed) data on customers or prospects, you need to be able to prove why you need it, how you’re going to use it and that you’re taking every precaution to keep it safe – and that’s under current requirements. Data Protection law is currently facing a significant overhaul at a European level, so be sure that you or someone in your team is tasked with keeping a close eye on developments. This is essential to future-proofing your data strategy.
Assess The Current State Of Play
- How does your current data collection practices align with the new strategy? Put simply, are you asking the right questions of your customers at the right touchpoints? Are you accessing commercial data sources in order to quickly and cost-effectively plug gaps?
- Ask yourself, are there potentially useful data variables – including meta-data – that you might be collecting inadvertently that does not currently feature in your data strategy?
- This stage generally disappears into the future, as you’re unlikely to ever be able to say your strategy is complete. Collecting and harnessing customer data is an iterative process, changing in focus and priority just as your customer base changes and develops over time.
- At Blueberry Wave, we believe the most successful business of the future will be those that have a flexibility in their thinking and systems, permitting them to really listen to customers and quickly – probably in real time – adapt their proposition accordingly.
If you have a data strategy that you believe could be working harder for you – or are seeking to develop one from scratch – please get in touch with Blueberry Wave. We’re a leading CRM and data strategy consultancy that simplifies the complex world of customer data for clients looking for growth.« Back