1. Berlin Packaging, a US$ 200 million-a-year maker of cans & bottles used two disparate business intelligence systems – Relationship Management and Order Management systems respectively. Both of them had their own customer master files, which did not match. Data integration, through CRM implementation would provide a universal view of the customer by removing data deficiencies (such as wrong numbers, mis-spelt names, incorrect addresses) and also help summarize customer data from the 2 BI systems.
Customer data often remains fragmented throughout the company due to the proliferation of multiple BI tools such as CRM, ERP & SCM systems. By building bolt-on applications into the PeopleSoft ERP & SCM system, they created historical records on 27,000 customers. Each dept of the company could now access critical customer data from a single repository. Churchill Downs, a US$ 500 million-a-year operator of 6 horse racing tracks, was looking to change its mass marketing approach into a personalized one-on-one direct marketing strategy.
The company had 27 sources of customer information and referencing amongst them was a constant problem. Traditionally, customers were divided into 4 distinct buckets – platinum, gold, silver & bronze. After running the Clementine data mining tool, it was discovered that there were 9 distinct customer types based on psychographics (deciphering which would go a long way in conceptualizing successful direct marketing efforts). By harnessing the true power of BI, Churchill Downs was able to match customer profiles with the messaging on marketing brochures.
These collaterals resonated well with their personalities, resulting in great results at the Arlington Derby – 5,500 customers turned up at the races (10% of 55,000) and spent an average of nearly US$ 300 per person, totaling US$ 1. 6 million (up nearly 70% from the previous year). Alternatives uses of CRM that could benefit Churchill Downs: •By the efficient use of CRM Churchill Downs could consolidate its front office and call center operations. A good website interface would help the users to company migrate the calls coming to the call center towards the online channel thereby reducing costs. Increase customer retention by initiating customer loyalty programs. •Increased customer experience will enhance credibility and sustainability of the business. •The CRM data can be used to focus on promotional activities to increase revenues from high spending categories. For example, Churchill Downs can come up with attractive promotions for customers of “Smarty Steve” category. 2. Yes, smaller companies are better positioned to be more effective users of CRM than larger ones. The reasons are – It is easy to build a CRM system in early stages of a company than later because the company would have lesser amount of data in the early stages when they are small/mid-sized hence reducing complexity. •Web based subscription CRM softwares are not too costly and complex. Therefore, small firms can effectively utilize such softwares. •It is easy to build an integrated customer system for small businesses compared to large organizations as large firms may have large disparate systems. . Thus more effort is wasted in bridging these silos during implementation. The CRM system for small companies can easily provide a single view (360 degree) of a customer causing a probable increase in sales. •Establishing a master record of customer data is a less daunting task for the small and medium sized companies. 3. The biggest issues faced by companies during CRM implementation is the availability of “good” data. This lack of “good” data stems from the fact that for a large company data is scattered over multiple locations which leads to data overlaps and inconsistencies.
If an organization has disparate systems and data silos, a large chunk of time and effort has to be spent on connecting the silos. In addition to this, if multiple copies of data exist, it is impossible to tell which one is the correct one. Adding to the dubious nature of the data, with the growth of ERP and CRM systems it has become even more difficult to merge the data. This is why the author suggest that small and mid size companies are in a better position to adopt CRM activities, which would help them in the future by making data related tasks a lot simpler