Satisfied customers are loyal customers. That's why building a lasting and good customer relationship is an important factor for your company's success. The Customer Master Data Management (CMDM)the management of customer master data, plays a decisive role. After all, appreciative communication across all touchpoints and digital channels is only possible with a holistic view of the customer.
Your customers' master data is the central point of contact for the interaction with customers - in all phases of the customer relationship. While product master data, for example, brings together all essential information about a product, a customer master data record provides a central, clear and consolidated view of all information about a customer.
This means A customer in the real world ideally corresponds exactly to a unique record in the customer master data - with a complete history and legally compliant consent statements.The record contains a rich customer profile and multiple relationships to other master data, such as the products and services the customer has purchased. Demographic data is added and reference data such as customer classification, industry, market, VAT rate or current discount level is assigned. And every customer interaction further enriches or adjusts this master data.
There is only one small catch. The "single point of contact" with the customer no longer exists. Today, information is shared and interacted with across countless touchpoints and digital channels. Customers interact with the provider directly or indirectly through social media, customer engagement activities, over the phone, or by subscribing to a newsletter. Data is generated through retailers, distributors, and a variety of e-commerce channels. This swelling tide of data increases the risk that customer information is no longer consistent and is often stored in a variety of systems and data silos. As a result, a clear view of the customer is lost.
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The paradox of customer centricity
It's a paradox. The more active a company is on all available channels interacts with its customers and communicated, the greater the risk that the clear view of this customer will be lost. A study by the provider Uniserv shows that this is not a matter of trivialities1shows that this is not a matter of trivialities: one in three retail companies is dissatisfied with the quality of its customer data. Incomplete data and duplicates, i.e. customer data that exists twice, are considered particularly critical, and outdated and incorrect customer data is also common. However, while most respondents believe that high quality customer data is critical to business success, only one-third of respondents are taking any action to improve quality. This is despite the fact that regulatory requirements for customer data management have become much more stringent in recent years.
The reason for this imbalance: Reliable customer master data is not created by the good intentions of all-encompassing customer centricity alone. They are created by people, knowledge, processes, and systems. And it comes from management's commitment to providing the skills, budget, and resources for sustainable customer master data management.
Customer master data management is not a part-time job
Market research firm Gartner® defines master data or master data management (MDM) as "a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organization's officially released master data assets. "22
The aim of MDM is therefore to ensure the quality and reliability of a company's master data. Customer Master Data Management (CMDM) takes on this task for the domain of customer data. And this is no easy task, because customer data is constantly changing. In Germany, the name of a company changes every three minutes, a company address changes every seven minutes and a new managing director takes up his post every 30 seconds3 ... This shows that customer data is a very dynamic matter - unfortunately, a one-time data consolidation that is carried out every few years is not enough. And customer data, especially for large, international companies, must always be viewed in the context of the corporate structure. In order to determine whether the buyer from the Spanish subsidiary actually receives the same discount as his Swedish colleague, the individual master data records must also be correlated.
The main task of CMDM is to merge, aggregate, and standardize customer master data from multiple sources to create a centralized and reliable "single point of truth" for customer data. By making this data available to all users, systems, touchpoints, and business processes, companies can create consistent and transparent customer journeys. All the information you need is available, whether you are selecting a product, placing an order, or handling a service or complaint. Consistent customer data creates a level playing field.
To achieve this, customer master data management must be viewed as a central and ongoing business function that requires clear accountability, sufficient budget, and in-depth knowledge.
Customer master data management in four steps
Due to the highly dynamic nature of customer master data, it must be constantly reviewed and revised. These tasks are typically performed using specialized CMDM tools that support typical extract, transform, load (ETL) and consolidation tasks. Master data management is typically done in four steps:
- Data Onboarding: Customer data must come from all sources. z. e.g., from the various touchpoints, e-commerce channels, and customer service, are collected and brought together in order to consolidate them. This data onboarding, like all subsequent steps, is not a one-time process, but occurs continuously, often in real time.
- Data matching and cleansing: When transferring customer data from a wide variety of touchpoints, it is inevitable that data duplicates will be created. Reasons for duplicates include input errors, merging of different records, name changes, abbreviations, and variants. Duplicate cleansing is one of the core tasks of CMDM. Duplicates often need to be merged automatically or semi-automatically.
- Data enrichment: Missing information and reference data are enriched, e.g. from third-party sources of large address providers, industry directories or from internal data sources.
- Data Distribution: The consolidated customer master data is made available again to all relevant systems and touchpoints via standardized interfaces and services.
Customer master data management enables true customer centricity
A sustainable and high-quality Customer Master Data Management cannot guarantee satisfied customers - but CMDM is a central building block for the transformation to a customer-centric company. Because only a central, error-free and reliable view of the customer enables communication with the customer at eye level. This creates trust, appreciation and loyalty. And in the best case scenario, a happy customer who stays.
- https://www.uniserv.com/unternehmen/blog/detail/article/uniserv-trendstudie-unternehmen-sind-mit-verwaltung-ihrer-kundendaten-unzufrieden/
- https://www.gartner.com/en/information-technology/glossary/master-data-management-mdm
- https://www.computerwoche.de/a/so-halten-sie-ihre-kundendaten-sauber,1931848,2
Find more information: Customer Master Data Solutions in Cross-Channel Retail at Ernsting's Family GmbH & Co. KG
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