Is your company customer-centric? There is probably no one who would answer "no" to this question. After all, satisfied, loyal, and returning customers are the key to your business success. Unfortunately, the reality is often different - even though true customer centricity is a competitive advantage not to be underestimated.
In unserem Themenschwerpunkt zu Customer Centricity und Customer Master Data Management möchten wir Ihnen den Wert von echter Kundenzentrierung aufzeigen. Denn Customer Centricity ist mehr als nur ein Buzzword oder die Behauptung, der Kunde würde selbstverständlich an erster Stelle stehen. Aber tatsächlich sind kundenzentrierte Unternehmen in Deutschland immer noch eine Seltenheit. Die konsequente Ausrichtung auf den Kunden schafft daher erhebliche Vorteile und Wachstumschancen gegenüber Ihren Wettbewerbern.
Recognize the problem
If you are asked about how many different products your company offers, the answer will not be difficult for you. You will also be able to list their applications, features, benefits and USPs, because your company's business success depends on these unique and high-quality products - the more innovative, the better.
The situation is quite different when you ask about the customers. It is usually possible to give a rough number of customers, revenues, customer segments and industries served. But when it comes to the specifics of a particular customer, their particular needs and idiosyncrasies, the air gets thin pretty quickly. And that's no surprise.
This is because most companies in Germany - and this includes the classic hidden champions in the SME sector - are product-oriented companies. In other words, companies that put the product and its quality at the center of everything they do. People who spend a lot of time and money developing, manufacturing, and marketing better and more innovative products. However, the effects of this approach can be disastrous. For example, significant investments are made to develop and launch new products over a period of years, only to find that no one wants to buy them in sufficient quantities. Formerly loyal existing customers migrate to the competition, even though the company has much better products in its portfolio.
Anyone who has had to repeat the same questions on every call to a service hotline or received three identical insurance brochures in the mailbox on the same day can understand why: Your customers no longer feel understood. They are not taken seriously in the uniqueness of their specific needs and requirements. You may still be happy with your products, but not with your company.
Customer centricity as culture and strategy
Why is it important to put the customer at the center of your business? The answer to this question is actually quite simple: It is simply too expensive to lose existing customers.
After all, once you've lost loyal existing customers, it's not so easy to replace them. According to a Harvard Business Review study, depending on the industry, a new customer costs between five and 25 times more than retaining a loyal and satisfied existing customer1And if too many customers leave, you'll eventually have to offer discounts to replace them - which is also not a sustainable strategy, because those customers only came for the low prices. The goal of customer centricity is to retain valuable existing customers, provide them with positive experiences time and time again, and, in the best case, turn them into advocates for your company.
Once the goal is clear, it's time to give the idea a concrete framework. The three critical parameters for a successful transformation to a customer-centric organization are:
- The stated goal of becoming a customer-centric company. And it's not about listening to customers a little more. Customer centricity means putting the customer at the center of everything we do. A customer-centric corporate culture.
- The transformation to a customer-centric organization will only work if all levels of the organization, from management to product development to service representatives, focus on customer value in all decisions.
- A viable strategy and operationalization that fits your business. The goal is clear, but the journey must be planned and executed step by step so that customer centricity becomes a model for success for your company. An important component of operationalization is Customer Master Data Management (CMDM).
Customer centricity is based on reliable information
You may also know examples like these from your company:
- Customer A complains about your current offer and demands the discount you have been giving to his colleague in the national office for years.
- Customer B tells you that they bought $5 million from you last year - but your sales rep has much lower figures.
- Customer C has a special support agreement with you that he has to explain to the service rep every time he calls.
- Customer D receives 20 emails a week from your marketing department with product recommendations on various topics, but never on the topic he is really interested in.
The situations are different, the reactions are the same: An existing customer is angry. He does not receive the appreciation he deserves and can expect. And, as a last consequence, he migrates to the competitor. But there is another commonality: in each of these cases, the information about the customers was incorrect or incomplete.
You see: Customer centricity doesn't work without world-class data. And customer data is not just any data, a first name, a last name, with an address and a phone number. Your customer data is your most valuable treasure.
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Customer master data management for reliable customer information
Your customer data is valuable - so you should treat it accordingly. And that's not just because this is sensitive data that also needs special protection. The value of your customer data lies in the fact that it is master data - central data on which your company's business processes are built. If your customer-centric business strategy is the steering wheel that steers you toward your customer-centricity goal, your customer master data is the engine in the engine room that makes sure you get there. Without this engine, customer centricity is not possible.
What is Master Data?
Master data, or master information, is data that is stored and used in an organization on a long-term basis, as opposed to the many transactional and operational data that is generated in an organization. Customer master data is therefore in the same category as your company's other master data, such as products, suppliers, components, accounts, and so on. It provides a unique "single point of truth" for this information, is used in numerous business processes, and typically has a long lifespan.
During this time they change, absorb new or additional information, acquire their own history. They are related to other data, such as transactional data like orders, invoices, support cases, or other master data like accounts, products, or product configurations. And they are assigned to specific clusters and groups, such as a customer category, country, discount group, or specific tax rate.
High-quality, meaningful master data is a valuable asset and the foundation for excellent business processes. Master Data Management (MDM) is the discipline of ensuring that this master data is consistent, accurate, and of a high quality over time.
Customer master data is therefore data that has a very special meaning and, like your customers, should be highly valued. However, current studies such as the EHI study "Technology Trends in Retail 2021"2 and our own experience show that in many companies far too little is done to maintain and optimize the quality of customer master data - with serious consequences.
That's because doing business online, with its exponential growth of digital touchpoints, fragmentation into direct and indirect e-commerce channels, and a host of other systems, interfaces, and transactions, makes it increasingly difficult to keep track of customer data. The volume of data is exploding, while the quality of your customer master data is deteriorating. The engine of your business is misfiring at an alarming rate.
So you need the right people, processes, and tools in your organization to ensure that you can rely on your customer data. The name for this discipline is Customer Master Data Management, or CMDM for short.
With the right tools, clear rules, and organization, CMDM can prevent your customer master data from continually losing value. To achieve this, Customer Master Data Management continuously consolidates, updates, cleanses and optimizes the data quality of your most important asset. In this way, CMDM creates a reliable foundation for your company's customer centricity.
How can CMDM add critical value to your organization?
- Let's find out together in a no-obligation conversation.