Get ready to lean on data
As businesses look to strip out waste and optimise processes, how will marketers ensure their data measures up?
Lean management techniques have only just started to be applied to core business processes, rather than manufacturing where they originated. The reason is simple - what white collar workers do is harder to structure and standardise in the same way as blue collar work.
Yet the same objectives of lean and sixth sigma are now starting to bite down on management itself. With relatively little headcount left to strip out, the only way to gain cost-savings now is to make everybody work more effectively.
In this context, a prime contender for lean thinking is starting to emerge - data. It possesses all the right characteristics for having lean processes applied to it. For a start, it is identifiable as an asset with a value, making the investment easier to justify. It also supports functions right across the enterprise, which means any impact from improvements will be widely felt.
There is also the appeal of having a greenfield project. Few companies have really thought about data as an entity in its own right before. Ask the IT department and they will just shrug. But start to introduce data quality KPIs and data governance structures and you suddenly have a significant landscape to develop.
So how does this affect marketing data and the day-to-day business of understanding customers and prospects? Will marketers now have to become lean black belts, as well as all the other skills they require?
The answer is probably that a little bit of lean goes a long way. But it does demand some shifts in thinking. We have enjoyed a very permissive environment in which lots of data was available and little was really demanded in the way of efficiency.
The boundaries for marketing’s use of data have been progressively tightened and look likely to get even more restrictive.
Marketers do not need to become lawyers or even social philosophers to adapt to these changes. All they need to do is start applying some of the basic lessons that they learned in college, but then have seldom been asked to apply.
Cleaning data, avoiding waste, keeping information fit for purpose - aren’t these the starting points of a lean approach?
The Supplier’s View
The objectives of lean and six sigma - removing anything from the production chain that customers won’t pay for and reducing the error rate to as close to zero as possible - are an excellent fit for the data space.
If you’re one of the 42 per cent of UK organisations who have a data quality strategy, then congratulations - your marcoms are probably well on the way to being both profitable and Data Protection Act compliant. But if you’re among the remaining 58 per cent, then shame on you. Data handling is an issue that can no longer be ignored.
The engine room of every multi-channel marketing campaign should be clean, up-to-date, segmented and secure client/prospect data. This might seem self-evident, but too many UK marketers remain ignorant of the fact that data is a valuable business asset which needs to be treated accordingly. So here are my top five best practice tips:
1.Standardise your data
Ask any bureau, “what’s the most time-consuming aspect of your job?” and they’ll tell you it’s file formatting. Too many databases are blighted by badly-formed and unmarketable addresses, so standardisation should be the cornerstone of good data housekeeping.
2. Assess how best to house your data
For some, the answer lies in sophisticated CRM systems, however, true CRM Nirvana is only achieved by very few. I suggest looking at both in-house and bureau-hosted options so marketers can really begin to drill down into datasets to leverage the most insight possible.
3. Be secure
With mail-related identity fraud skyrocketing by 66 per cent in 2008, ensuring that all of your datasets are protected, encrypted and secure can only but enhance your brand’s reputation and lifetime value to clients.
4. Be more intuitive with your data sets
Let’s get totally lean and six sigma here. Why not use a Smart Audit service to better identify the top tier of your customer or prospect data based on their likelihood to purchase and only then apply the appropriate suppression files - thus ensuring value and decreasing error.
5. Use suppression files
Regularly applying commercially available suppression files is no longer an optional extra, but is now mandatory, thanks to the Protection From Unfair Trading Regulations 2008 (CPUT).
Better data handling needs buy-in from all business divisions - senior management, marketing, sales, finance and IT. No-one can afford to take a siloed view. By cleaning data, avoiding waste and keeping information fit for purpose, companies will be enhancing their brand image, customer retention/loyalty rates and ROI right at the time when the need for all of these has never been more acute.
The client’s View Natalie Waddell
Cleaning data, avoiding waste and keeping information fit for purpose are as essential in the football world as they are across all UK businesses - particularly at a time when many of us are looking to maximise revenue and diversify income streams.
Chelsea FC derives customer data from multiple sources - ticket sales, worldwide merchandising and leisure facilities, as examples. Our single customer view database allows the degree of cross-over sales and fan interaction to be quantified and more effective marketing programmes implemented and tracked.
Chelsea FC submit customer data to meta-morphix for regular cleans, screens and de-dupes using commercially-available deceased suppression files and relocation records. Keeping our customer database clean and up to date improves our relationship with our customers and enhances the Club’s brand image and loyalty.
Valuable insight can also be gained by overlaying records with external overlays from meta-morphix (eg, data of birth, income bands, etc) and historical transactional data. This allows for more effective database segmentation so that promotions can be targeted to best effect. Appending e-mail addresses wherever possible also increases response rates for the Club’s multi-channel marcoms.
I now oversee a detailed fan “family tree” via our CRM system which is constantly renewing and updating such that I can target the most appropriate Chelsea FC supporters with specific offers with a view to: (i) retaining/increasing our member base; (ii) increasing fans’ spend across Chelsea’s global business; and (iii) recruiting Chelsea FC fans of tomorrow.
That the Club is now able to cross-sell to and profile potential multi-use fans using a predictive scorecard which ranks single use supporters with the highest propensity to utilise the hotels, restaurants and retail outlets at our Stamford Bridge complex speaks to the ROI-enhancing benefits of our CRM programme. The results - increased fan loyalty and spend among them - have ensured that Chelsea FC’s commercial operations continue to match the Club’s high international profile.
I agree with David and Rob - be lean and six sigma as well as secure and accurate with all of your client and prospect data. Ask yourself where and how you can best unlock the value and insight inherent in all of your marketing datasets. Even taking small data handling best practice steps can yield big dividends down the track - for the benefit of your company and customers alike.
It is all too easy for management strategies to appear remote, diffuse and irrelevant to the day-to-day operation of the business. When it comes to data, however, the buzzwords of lean and six sigma could easily become bywords for effective and value-driving management.
The reasons for this are easy to find. Data is unconquered territory as far as most senior managers are concerned. It has not previously been viewed either as an asset requiring better protection and exploitation or as a process that can be run more effectively. All that is changing.
Take the example of data standardisation. Any time the business - or its external services providers - wants to make use of customer data, it usually has to spend a lot of time on workarounds, filling the gaps, aligning fields, correctly labelling variables. That is a straight cost which could have been avoided.
If a process was in place to ensure the same variables are always entered into the same fields using the same values, data is standardised from the outset. That means ensuring you have a common data model across the organisation which is routinely used and understood - a very lean way of working.
From there, the business might want to progress towards having master data management in place. This is where the tactical gets strategic and fits nicely into the broad objectives many managers are keen to adopt.
MDM is not just about implementing systems that pop up screens at the point of data entry. It assigns ownership of pieces of data to specific parts of the business and introduces data KPIs.
Taken from another direction, ensuring that permissions are accurately captured, kept up-to-date and acted upon can provide a link between tactical screening for marketing purposes and strategic data governance. Avoiding brand damage - and law suits - is a very lean thing to do.
Data has often been seen as a collection of small components with no overarching picture to unify it. But that is like thinking of engineering as about bags of nuts and bolts. Once you realise how your whole project can be brought down by the failure of one tiny element, you start to pay close attention and put proper management procedures in place. And that is what is now happening to data.