Through 2017, customer relationship management (CRM) leaders who avoid master data management (MDM) will derive erroneous results that annoy customers, resulting in a 25 percent reduction in potential revenue gains, according to a report from IT research firm Gartner.
The report notes that MDM also provides new opportunities for CRM leaders to effectively utilize big data sources—such as social networks—and external data enrichment providers.
While organizations have long made use of commercial data enrichment providers for applications such as customer segmentation, customer acquisition and prospecting, in the past this usage has most often occurred within a single system silo or business function such as marketing or sales, with no coordinated reuse across the organization.
"Over the last several years, CRM software sales have outstripped overall IT spending," Bill O'Kane, research director at Gartner, said in a statement. "CRM leaders must understand the benefits of the MDM discipline to CRM and make it part of their CRM strategy. MDM is critical to enabling CRM leaders to create the 360-degree view of the customer required for an optimized customer experience."
An MDM approach across these functions could in theory provide a 360-degree customer view to the entire organization, ensuring consistency of the customer experience.
"In this scenario, customer segmentation becomes far easier and more accurate, giving organizations a better understanding of their customers and their likely patterns of behavior," Kimberly Collins, research vice president at Gartner, said in a statement. "Moreover, the MDM hub can be used to support these operations during real-time customer interactions, as well as to accurately populate analytics platforms—such as data warehouses or data marts—to support larger scale customer analysis efforts."
The report said a few enterprises have actually reported relieving their sales force of the responsibility for selling low-margin maintenance items, and instead providing their customer service teams with sales training to enable them to sell these items, both during service interactions and, in some cases, active phone and email campaigns.
Another customer service enhancement enabled by the "360-degree view" is the enablement of cross-selling and upselling based on marketing techniques such as segmentation based on static data values, as well as providing incentives to purchase new items based on previous purchase sequences, the report noted.
"Without MDM, attempting to identify a customer will result in the same issues of inaccuracy and expense as those using the more traditional commercial data providers with fragmented or unmanaged master data," Collins said. "Without MDM, attempting to identify a customer will result in the same issues of inaccuracy and expense as those using the more traditional commercial data providers with fragmented or unmanaged master data."