Modern CRM Needs a New Partner: Master Data Management
When I began my career in the ’90s, CRM was a buzzword because it promised to marry marketing know-how with scientific rigor, to accurately measure and improve marketing investments and dramatically improve ROI. And the early signs were very promising as response rates increased and CEOs began to see marketing more as a process of continuous improvement that generated revenue rather than a blind leap of faith.
Then, as we entered the era of advanced analytics, targeting and retargeting based on behavioral economics, the possibilities seemed endless. If data is power, then more data must equate to more power, right? Not necessarily.
While the advent of cloud-based marketing tools in the past several years has accelerated CRM, it has also served as the catalyst for the rapid proliferation of disparate data sources. While leading CRM tools, such as Salesforce.com and Microsoft Dynamics, effectively streamlined workflow and automated repetitive tasks, they simply weren’t built to manage, standardize, and cleanse data that lives in unsanctioned master data files in spreadsheets, small user databases, and websites.
In many ways, the vision of the latest generation of technologically adept CMOs was spot-on. These new CRM technologies, platforms, and cloud-based tools enabled marketers to generate more high-quality leads than ever before, improved transparency, and facilitated closed-loop sales processes that improved both efficiency and effectiveness.
However, it seems these CMOs also failed to anticipate an increasingly pervasive data duplication problem, which multiplied every time another department in their organization launched a new database to support customer service, sales, e-commerce, or other customer-facing channels. As duplication rates approach double digits, leading marketing executives have begun to leverage master data management (MDM) tools to eliminate duplicates and deliver a single customer view not only for CRM systems but across all sanctioned and unsanctioned data files in the organization.
CMOs are just coming to the realization that they need a way to manage and eliminate variation across every data set in their organization. In short, they need an MDM solution to optimize their CRM systems. According to Bill O’Kane, research director at Gartner, “Master data management is a critical success factor in constructing optimal customer relationship management processes.… CRM leaders who avoid MDM will derive erroneous results that annoy customers, resulting in a 25 percent reduction in potential revenue gains.” He goes on to say that companies are adopting a more integrated customer experience approach that requires an understanding of the customer’s entire relationship and interactions with the company at any point during the customer journey.
“This single or ‘360-degree’ view of the customer requires that all the operational master data pertaining to the customer—and often to product and service as well—be combined from all of the data silos where it currently resides,” O’Kane said. “This data is then checked and cleansed for duplicates while selecting the highest quality values across all data sources for each master data attribute. The result is a ‘single version of the truth’ for the master data that can then be integrated in different ways with those remaining data elements specific to transactions and interactions in the operational systems.”
According to Paul James, chief technology officer at VisionWare, an MDM provider, “Government, finance, education, and healthcare customers often have millions of dollars and a number of years tied up in their current infrastructures. With [an MDM solution], they don’t need to ‘rip and replace’ these systems. They can begin to manage the duplicate data in their databases one department at a time, as their internal resources and IT budgets allow.” This managed, iterative migration process seems to be the right approach as organizations gain continuous improvements in their customer engagement and insight.
As the significance and impact of CRM has increased, it’s more important than ever that CMOs take a step back and ask the right questions about how their organization governs data, maintains the golden consumer record, and prevents data duplication. With so much at stake for marketing leaders and the organizations they serve, the onus is on CMOs and their IT experts to stay ahead of the curve. Knowledge is power. Stay informed.
Tim J. Busche is cofounder, president, and CEO of Envision Health Solutions. Busche is a strategic marketing and sales executive with 25 years of experience, including the past 15 years focused on the healthcare industry, including leadership positions at Johnson & Johnson and Truven Health Analytics (Medstat). Busche has more than a decade of experience working on the client side as well as on the advertising agency side of the business. Busche has a BA in marketing from the University of St. Thomas and an MBA with Distinction from the University of Michigan.