Best Practices in CRM Maintaining Customer Intelligence By Dr. Nancy Rauseo

Customer intelligence is the application of customer knowledge.
It is a company’s ability to effectively utilize what it continuously learns about a customer. A company must first identify and then
capture customer intelligence. Once your company has done so, the next
step is to establish best practices for maintaining the customer
information you have worked so hard to identify and capture. In this month’s
article, we will explore strategies to maintain your customer intelligence
accurate, valid and measurable.

In my experience with CRM projects, I have found that customer information
becomes obsolete very rapidly, sometimes as soon as it is captured! Consider
that in the U.S., about 45 million people change their home addresses
each year. Change is a constant in our business world today – job
titles change, phone numbers change, products change — and more importantly,
customers’ needs and expectations change. Your Intelligence
contains the location (department, function and processes)
of the required information and the method for capturing it. We will now
expand this blueprint to define the following for each information requirement:

  • CRM metrics
  • Data integrity
  • Intelligence ownership
  • Rewards and incentives for performance management

CRM Metrics

An important component of shifting from a product focus to a customer-centric
focus is a change in your measures of performance. New business metrics
and supporting analyses are required to continuously monitor the customer
dimension of your business. You’ve identified your company’s
CRM objectives, but now how do you know whether you are achieving them
or not?

CRM metrics help us set and gauge the progress and level of success in
meeting our CRM objectives. They also aid in establishing performance
baselines and standards as well as monitoring customer experiences at
all relevant touch points. Metrics are also used to the change the way
employee performance is measured and compensated. As CRM objectives change
over time, so must the CRM metrics.

Let me give you an example. Let’s say that last year, one of your
CRM objectives was to retain existing customers. You chose retention
as your CRM metric and your target performance was 25%. This
year, one of your key competitors has begun a campaign to ‘take
away’ business from you. Your retention rate target has now been
changed to 50%. Your job is to make certain that you are maintaining the
data used to calculate this retention rate and ensure their accuracy and
validity. You need to go back to your information requirements and blueprint
documents and update them as a result of changes to CRM objectives and
consequently metrics.

Data Integrity

In order for data to remain useful and create value, customer databases
must be kept up-to-date. Be sure to work with your CRM technology provider,
information technology staff and process owners to:

  • Ensure that new customer information is immediately updated in the
    CRM database.
  • When possible, get customers to update their own records.
  • Track the level of usage for each data field in your CRM system and
    question the usefulness if below a certain usage level, which your company
    will need to determine.
  • Purge customer records that have remained inactive for a certain
    time period.
  • Conduct a regular audit for a subset of the files each year.
  • Change the business rules (or metadata which is also called ‘data
    about data’) as required through the use of proper software.
  • Make sure the updated information is disseminated to the rest of
    company, particularly to the customer-facing employees.

Intelligence Ownership

Last month, we discussed the importance of assigning an owner to each
business process, whether customer-facing or analytical. The same holds
true for categories or portfolios of customer intelligence. A person(s)
or process owner(s) within the company must be responsible and accountable
for facilitating the data maintenance process. If this ownership is not
established, things will fall through the cracks result in poor decision-making.

Many companies create a formal or informal matrix structure, particularly
when similar business processes (rather than functional areas) are used
for different customer portfolios. A matrix organization chart can have
process managers on one side and customer managers on the other side.
This works well when the intelligence captured is done within the business
processes. Some companies have taken it a step further and defined customer
intelligence teams or committees to monitor intelligence quality for specific
customer groups.

Rewards and Incentives for Performance Management

One of the challenges in maintaining customer intelligence is figuring
out how to motivate and compensate employees for keeping information up-to-date.
Employee performance is driven by the criteria used to measure results.
If a sales rep’s success is measured by new revenues from new customers,
will he or she focus any attention on retaining existing customers? The
reality is that sales compensation programs usually go against the customer
retention or loyalty philosophy. Compensation programs for operational
areas normally focus on productivity increases rather than customer value.
If customer retention and profitability are key CRM objectives for your
company, then you must establish CRM metrics and compensation and incentive
programs that reinforce the new intelligence capturing and maintenance

Best practice companies have incorporated reward and incentive programs
into the performance appraisal process by:

  • Modifying job descriptions to include the specific behaviors and
    actions employees must display in order to achieve the CRM objectives.
  • Training employees on the new CRM-focused activities.
  • Working with HR to develop appropriate customer-based compensation
    and reward systems.
  • Developing recognition programs for accuracy and validity of customer
  • Creating career progression programs focused on the achievement of
    customer-centered objectives.

Dr. Nancy Rauseo is on the faculty of Florida International
University’s College of Business Administration where she teaches
marketing. Nancy holds a Bachelor of Science in Industrial Engineering
from Purdue University and an M.B.A and Ph.D. from Nova Southeastern University.
Prior to her teaching career, she held various senior management positions
for over 20 years in the areas of sales, marketing and technology implementation.
Dr. Rauseo is also Instructor for FIU’s Professional Certification
Program in CRM. For more information, visit:

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