Without taking these four key steps, companies could be working from skewed data, results could be incorrect, and there is the potential for severe business consequences.
Posted Aug 23, 2004
Every day companies collect countless pieces of data through daily customer interaction. This data can be turned into useful sales and marketing intelligence to drive better business decisions. From developing new product offers to reaching new markets, customer data has the potential to transform almost every aspect of a company. However, the challenge most companies face is how to manage this data and turn it into actionable information.
There are four key steps companies should follow to ensure they are using and maintaining their database efficiently. Without them, data is skewed, results are incorrect, and there is the potential for severe consequences.
Identify the need
To manage a database effectively, it should not be everything to everyone. There is no need for it to include every manageable piece of information, as only data that is truly relevant will be actually used. To decide what data elements are needed, companies should ask the following questions:
Who will be using the database and for what purposes?
What information needs to be retracted from the database? (sales leads, contact information, campaign success rates, etc.)
What kind of information will be put into the database to generate the best results? (employee size, location, revenues, etc.)
Develop a process for collecting and structuring data
Knowing what data to collect is the first step, but how to collect it is another issue. Customer information enters a company through sales, marketing, finance, call centers, the Web site, etc., and companies need to review these collection points to determine where the best and most useful data is coming from. With that analysis they need to ensure that each point has the capability to easily collect the relevant data.
Once a company can identify the basic needs and functionalities of its database, it can build a structure that will support these needs and objectives. Having relevant, quality customer data on hand is useless if the people who need it most can't access it. The database needs to be structured to ensure that information is easily accessible and is organized in a way everyone can understand.
Based on the data model a company identifies it needs, it will build a metadata layer within the database that clearly identifies what each represents.
Ensure data quality
The most important element of managing a database is quality assurance. Data decay has a significant impact on the effectiveness of your database. In fact, business data decays at a rate of 1.5 to 3 percent every month. As a result, companies need to continuously ensure their data is accurate, complete, timely and consistent. Without these four dimensions of data quality, companies cannot safely rely on the data within their own system.
Accuracy: correctly recording and identifying the information
Completeness: having all the data elements outlines in the structure to enable users to get a full understanding of each target
Timely: verifying that the information is still reflective of the customer's actual position--are the executives the same? have they moved?
Consistent: ensuring that each division within a company has access to and uses the same information
Why is database management important?
Companies that follow these steps can rest assured that they are able to target the right customers and partners and have the tools to maximize those opportunities to gain new customers and grow existing customers. Without the right data or proper management techniques in place, a company is at risk of losing money, wasting time, and potentially jeopardizing customer relationships. A properly managed database enables companies to make strategic business decisions with confidence that will positively impact business performance.