COMMENT
Could a single view of a customer help maximise income and target your resources more effectively?
James Rawlins, senior consultant at Coactiva, part of the Callcredit Information Group, discusses opportunities for the public sector to learn more about its customers.
At
an organisational level I think it’s fair to say we in the public sector know very
little about our customers. What we do learn about them we glean from discrete interactions across the organisation, and that knowledge is locked away in isolated systems, hard to access and harder still to join together. Increasing what we know about our customers could allow us to engage more effectively with them and bring real, tangible benefits. This is something the commercial world knows well. How do they do it and how can we learn from it?
Organisations in the commercial world have long since gathered customer data through mechanisms such as loyalty cards and online shopping activity. This is supplemented by specialised socio-demographic data sets that are used to broaden the understanding of different segments of people. All this information helps businesses to understand the connection between the customer profile and the products they buy, be it washing powder or home insurance. This knowledge of the customer provides the fuel that powers the sales and marketing engine of big business.
A real example of creating a successful single customer view was seen after a recent merger of telecommunications companies. Maintaining customer satisfaction during and after the merger was vital for the new organisation and the challenge was to understand who the different customers were and gain in-depth customer intelligence across the businesses. Therefore they created a single view of their customers by connecting the disparate data sources using data matching technology and loading the relevant information into a customer intelligence platform. Understanding of customer behaviour and preferences for the whole customer base enabled them to engage and interact with those customers effectively through marketing and customer service activity.
In the public sector, perhaps the biggest challenges come from increasing financial pressures and funding uncertainty. These create the need to control expenditure in parallel with experiencing growing demand for
services – whether it be in health, social care, education or welfare. The challenge to do more with less is driving significant change, which although common in the private sector, will break new ground for some in the public sector.
It’s not easy to replicate what’s been achieved in the commercial world because although organisations like local authorities hold lots of data on their customers, it’s usually spread out in dozens of systems across the same organisation. Just getting it out of all those different systems presents a real hurdle and having access to the right people with the right skills can be problematic.
Joining up that data to create a consolidated view of each customer is not straightforward either. In fact, it’s incredibly difficult.
Customer details will have been collected in various formats and there will be lots of variation with different initials and names and titles and spellings and then people move from one address to another and system users will have created duplicate references for the same people and so on.
But assuming we were able to overcome this, having a more detailed picture of a customer allows us to understand them better. This enables us to group together people with similar characteristics using demographic and risk profiles. If we can then associate a particular behaviour with that profile then we can reasonably assume other people who have the same or similar characteristics will display the same behaviour.
There is still often a need to fill in some of the information gaps and provide specific pieces of insight and that’s where demographic data like that held in lifestyle segmentation tools are used. But before choosing your data make sure you’ve understood what question you want it to answer. A famous quote from John Tukey, the renowned American mathematician, sums it up: “Far better an approximate answer to the right question, than the exact answer to the wrong question.”
Here’s an example of how a single customer view
can be used. How much is your organisation owed? A pretty straightforward question with a reasonably straightforward answer and most finance directors could confidently provide an answer. Even with multiple debt recovery systems to navigate, it’s a fairly straightforward task to provide a total.
Who owes that money? Again, pretty straightforward isn’t it? Those same systems will hold details of each debtor.
Now for a trickier one: how much does each person owe? It’s not so straightforward now because an individual may owe multiple debts across multiple systems.
Now you have to create a unique customer identifier and join the relevant datasets to match all the corresponding debt records for each customer. That’s not straightforward at all.
‘Who owes what’ is a complex business, and that’s before we fill in the missing information: who will pay and who will not? Knowing the debtor profile will enable you to interact more successfully and efficiently with each customer.
In the public sector, debt is one simple example that illustrates the value of connecting relevant data to extract actionable intelligence, which aids efficiencies and generates revenue.
To collect debt efficiently we have to understand our debtors and engage with them effectively and efficiently. There is tremendous scope and opportunity to reduce the cost of recovery across an organisation by consolidating the recovery function into one dedicated team, instead of duplicating effort in different departments pursuing often the same people for different debts. The single customer view is a key enabler in achieving this.
James Rawlins
FOR MORE INFORMATION W:
www.callcredit.co.uk
public sector executive Oct/Nov 14 | 21
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