Accurate Data Key to Better Understanding of Your Customers

More retailers are relying on data to inform daily business operations. These decisions range from where to establish new store locations to how to prioritize customized offers and display advertising.

Data has become mainstream, with multiple departments using terms like business intelligence or big data. Many retailers are realizing benefits to leveraging information effectively, which could be the reason behind this shift in analytical responsibilities. Harnessing intelligence improves staff efficiency and consumer interaction, allowing retailers to provide better offers and enhance the customer experience.

Creating valuable, consistent analytics isn't without its challenges, however. Information is often siloed and spread out across an organization. Retailers are also plagued by inaccurate data. In fact, according to a recent Experian QAS study, 92 percent of retailers suspect some of their customer and prospect data might be inaccurate. On average, respondents thought as much as 17 percent of their data might be wrong.

A lack of a single customer view is hurting the advanced analytics efforts described above. A single customer view is an aggregated and holistic representation of the data known by an organization about its customers. Essentially, each customer has a single record containing all of the information that the organization knows about them, be it their purchase history, demographic details or even preferences.

Even though 82 percent of retailers will eventually attempt a single customer view, only 9 percent of those surveyed believe they have an effective strategy currently in place. That means that 91 percent of retailers currently lack visibility into their customer base.

There are several barriers to ensuring a consolidated database. First, most organizations operate departments and channels within siloed environments. As more retailers move to an omnichannel environment, organizational structures become more complex and information is further spread across an organization.

Furthermore, many businesses maintain different databases for various business units or departments. This can often result in duplicate records. In fact, 42 percent of those surveyed in the Experian QAS study stated that multiple databases cause duplicate records.

Finally, searching functionality in most CRM systems is very stringent and an exact match is required to find an existing record. With consumers moving so quickly and many entering information online or on mobile devices, it can be difficult for organizations to tie new information to an existing record. While these barriers are challenging, they can be overcome with a consistent data quality strategy. According to the study, 37 percent of organizations have a data quality strategy in place to support a single customer view. The reason is simple: the more accurate the information, the easier it is to add information to existing accounts and consolidate duplicate records.

Retailers need to involve all departments in improving the accuracy of information collected. IT departments can implement data verification techniques to prevent human error and enhance the searching capabilities within CRM systems. Departments that collect information can improve training or figure out various techniques to prevent human error. Organizations should also maintain one central database that contains accurate information and can feed analytical tools.

While many retailers are relying more on business analytics and intelligence for decision making, stakeholders need to first ensure the accuracy of the information feeding these statistics and ensure each customer has a single record within a central database.

Thomas Schutz is the senior vice president, general manager of Experian QAS. Thomas can be reached at thomas.schutz@qas.com.