VideoIt seemed like a small, simple problem. In January, four customers of New York-based AXA Financial Inc. reported difficulty using a new self- service feature of EQAccess, the Web site that has provided individual customers with access to their life insurance and annuity accounts since 1998.
Simple maybe — incomplete address data triggered error messages. But not small. Three or four addresses could be easily fixed, explains AXA technology consultant Eric Sebo, but a quick check showed that 934 other customers would have the same problem if they tried to complete transactions.
So AXA's IT department swung into action. In two weeks, it altered the application and, working with the customer service department, tracked down and fixed the source of the bad addresses. "We didn't lose those four customers," says Sebo. More important, he says, the problem was fixed before the other customers knew about it.
This close call illustrates the dirty little secret of today's customer relationship management projects: bad data. Long the bane of customer service departments, bad data can cripple expensive CRM projects.
"Once you have the infrastructure in place and confidence in your data, you can do almost anything for customers," says Sebo. Unfortunately, all too often confidence in data is either low or dangerously misplaced. And, as AXA's experience shows, bad data can be especially devastating when it turns up on the Web.
Theoretically, the Web is the best friend a CRM manager ever had. Internally, it is the ideal tool to tie together the disparate, product-based systems that contain customer data. Externally, it can provide all customers with a similar and consistent experience, no matter what products they buy.
But as Chandos Quill, vice president of strategic marketing for Orange, California-based credit-rating and data-services provider Experian, notes, the Web generates its own data problems. One of the presumed benefits of customer self-service on the Web is that customers assume the task of keying in their own information. And while it is generally true that customers try to be accurate if they're attempting to complete a transaction, mistakes happen.
"Customers can open up all different types of accounts over our Web site," notes Angela Maynard, senior vice president and chief privacy executive of Cleveland-based KeyBank. "I can do all the training in the world for our call center to make sure customer reps get the right data, but I can't do that with customers on the Web," she says.
And data errors and deliberate omissions soar when customers who are simply seeking information are asked to register at a site — far more so, says Quill, than when similar inquiries come into a call center. Perhaps the number one sign of customers' unwillingness to part with personal data, she says, is the fact that "the most common name listed in corporate databases is Mickey Mouse."
The magnitude of the CRM data problem is starting to leak out. A Meta Group report last May noted, "CRM implementations continue to be limited by data integration and quality issues, which are more often stumbled upon, rather than anticipated." And in August, a Gartner report cited seven reasons CRM implementations fail. Topping the list: "Data is ignored." As both Meta and Gartner suggest, companies often charge ahead with expensive CRM projects without first assessing — and budgeting for — the work needed to whip existing data into shape.
A System of Systems
One reason data is such a stumbling block is that CRM isn't so much a new addition to a company's technological tool kit as an amalgamation of existing legacy systems, data warehouses, applications, call centers, and Web sites. "There's no such thing as a single CRM 'system,' " explains Bryan Foss, a customer loyalty solutions executive for IBM Global Financial Services. "The sheer number of systems [making up a CRM system] for a typical bank or insurer is 100 to 150," he says. Even if the integration of all these different data sources goes smoothly — a grand assumption — there's no guarantee they all contain good information. That can hamstring a CRM from the start.
For example, notes Experian's Quill, "One of our telecom clients found that when it combined its call center database and its marketing database, it had 300 million customers — more than the total number of people in the U.S." In addition to obvious evils, such as expensive duplicate mailings, the main problem with such data dreck is that it makes a mockery of the analytical capabilities and decision-making tools that are touted as CRM's greatest benefit. Clearly, no marketing or strategic business decisions can be based on information that is so flawed.
"We have customers who have thrown away million-dollar systems because they were too dangerous to use," agrees Lacy Edwards, CEO of San Francisco-based Evoke Software Corp., which provides data-profiling software. Consultants who do the integration work are so aware of the potential pitfalls of bad data that they are careful to insulate themselves from the consequences. "Most integrators have built into their contracts that their work is only as good as the underlying data," says Edwards.
"CFOs need to take a leading role in the decision [to begin a CRM project] and make sure the data risk is understood," notes IBM's Foss. "These decisions are very substantial; they cost millions of dollars and could be the turning point between a company's success in the market and complete failure." Too often, he says, CFOs aren't aware of the data cleanup problem until a request for additional CRM funding lands on their desk.
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