1to1 - Spring 2009 - (Page 30) 1to1: Is there such a thing as having too much data? JD: The amount of data a company collects, and many don’t understand this, should be the amount they require to do business efficiently and effectively. It’s dangerous to have too much data because it takes time, space, and money to forklift data from one system to another. If it can’t be tracked back to a business requirement, then it’s not worthwhile to collect. The ability to get data isn’t a good enough reason to put it into the system. measurable that it’s amazing any company would do anything but protect customers’ data. two: Eradicate Attrition Foreseeing which customers are going to churn doesn’t take a crystal ball. With the right data and timely analysis, most any company can take steps to reduce turnover before it happens. British courier service e-Courier built an online business in a traditionally offline market, and is growing in a very competitive market by foreseeing customer attrition and taking action to prevent churn. “We have an automated system that knows who our client is, what traffic is like in their area, where every courier we work with is through GPS, and exactly what route they should take to deliver a package,” says Jay Bregman, e-Courier’s CTO. “Despite that, we were manually looking at spreadsheets with booking data and trying to detect variations. It was time-consuming and not very effective.” Bregman began using SeeWhy Software to detect churn because the business was growing too fast to continue manually tracking customer activity levels. Today when client booking patterns experience a drop-off, managers are alerted to follow up to see if there’s a problem. “The longer the time elapses between behavior indicative of churn and when the actual churn happens, the harder it is to win back that business,” Bregman says. “Generally if a client has an issue and doesn’t tell us, if we follow up too late they’ve already found someone else.” Sometimes e-Courier’s account managers experience false positives, like one client that lost power and wasn’t able to place orders for a few days. Generally, Bregman says, they’re impressed that eCourier notices and appreciates the fact that the company checks in. As a result of being proactive, churn has been reduced by double digits, and, Bregman says, his team better understands customers. “It’s as if we have a dedicated manager watching their volume, Bregman says. “It’s very personalized, and gives our clients the idea that we’re focused exclusively on them.” 1to1: Why don’t all companies? Is it simply a financial issue? MR: Not at all, it’s a philosophical one. I can’t imagine a company saying they don’t have the money to protect data; most of the time they just don’t think about it. A lot of the problem comes from not taking the customer’s point of view and thinking about where they’d want information accessed or transferred. Failure to ask those questions gets more companies into trouble than anything else. 1to1: What should a company do when a data breach does occur? MR: It’s imperative to apologize correctly and recover lost trust. Say you’re sorry as soon as you can and without excuses. Make sure to also include what changes will be made to prevent a similar incident in the future. We’ve found that customers will forgive one breach of incompetence, but they will never forgive lack of goodwill. If a company didn’t mean to compromise the data, they can recover with a good apology; if customers feel it was intentional then that mistake is fatal. The Top 5 Uses of Customer Data Understanding customer value/profitability 47% Crafting marketing messaging 47% Creating up/cross-sell offers 46% Segmentation 34% Pricing 20% Source: 1to1 Media four: Accelerate Data Access three: Build Customer Trust Companies have a responsibility to protect the customer information they gather and to use it ethically. In fact, according to Martha Rogers, PhD, a founding partner of Peppers & Rogers Group and coauthor of Rules to Break and Laws to Follow, how well or poorly organizations protect their customer data has a direct correlation to the trust customers will place in those companies, as well as to the likelihood of customers increasing their loyalty or leaving for a competitor. 1to1: Is the price of protecting customer data worth it? MR: Protecting data is a bargain. First, the data is the best way you have of getting more business from customers in the future, and if you haven’t protected and cleansed that data, then you don’t have access to the insight it provides. Second, there’s a customer equity issue. If you protect privacy, you’ll be of a higher value to your customers. That’s so Publishers Clearing House knows firsthand that the faster customer data can be accessed, the faster that information can be used to drive revenue. The company has long been a leader in direct mail marketing, but until recently its Web properties were completely disconnected from its traditional business. Since its online marketing efforts consist mainly of time-sensitive special offers, sweepstakes, and contests, PCH needs to reach customers quickly and measure response immediately to create the most relevant offers. Immediate data gives the marketing team the opportunity to quickly revise and personalize offers, which helps to increase responsiveness and boost profits. “We lacked cross-channel, customer-centric data visibility for our marketers, and the timeliness of the information we use to communicate with customers was too delayed,” says Rob Befumo, director of email marketing. “Both problems were a symptom of our in-house processes and a result of legacy systems for the two different channels.” When PCH wanted to create a new email campaign, for example, it had no way of knowing which online customers were already loyal direct-mail customers—which would identify them as more likely to respond. When it did send out an offer, data like response and delivery rates took days to see, and creating a follow-up campaign could take as long as a week. Befumo and his team partnered with e-Dialog to improve the timeliness of PCH’s campaigns, as well as to connect online 30 1to1 magazine www.1to1media.com http://www.1to1media.com/view.aspx?DocID=31412&PreviewMode=full http://www.1to1media.com
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