The Context
One of the core components of a CRM system is customer data. The system maintains both transactional data (the data around the relationship with the individual) and personal data (the data about the individual per se).
Once an individual is established as a customer in a CRM system, all the transactional data – like interactions, opportunities to sell products and services to the customer, products and services actually sold, issues with them, resolution to those issues, etc. - is captured and maintained in the system.
However, the personal data typically comes from the individual. It is collected from the customer himself (unless gotten in a list with some amount of personal details) during the process of setting him up as a customer in the system. There could be exceptions like collection of data on credit worthiness, which could come from credit monitoring agencies. While the process of managing this data is not exactly one with numerous pain points, there are opportunities for improvement both from the perspective of the customer and that of the companies.
From the perspective of the customer, for instance, he needs to go through the details all over every time he sets up a relationship with a new company. And every time he changes his address, he needs to call up the companies and update. Would it not be better if the individual can keep updating the data in one system - the Ultimate Customer Master - and let the companies subscribe to it either on a going or an ad-hoc basis?
From the perspective of the company, for instance, the data becomes stale over a period of time. While basic data like date of birth remain static, others like mailing address keep changing. Companies don’t have a foolproof way of keeping the data up to date – unless the customer himself calls and provides an update. Contacting the customers on a periodical basis to keep this information up to date could be both expensive and time consuming for the companies. Besides, the customer may get annoyed as well. Would it not be better to have a central repository - the Ultimate Customer Master - which can supply this data to companies at the click of a button?
The Idea
Basically, the idea is to have an Ultimate Customer Master which is maintained by an aggregator - like Google or Facebook, for instance - where individual customers can update personal details on a going basis. And companies can subscribe data from this system either on a going or an ad-hoc basis.
Individuals can start with the demographics like name, date of birth, gender, qualification, marital status, etc. While basic details like first name, date of birth and gender can be assumed to be non-changing (with exceptions, of course), details like qualification, income, job details, address, marital status, details about family, etc. keep changing and the individuals can keep updating them. Gradually, the scope of information collected can be enhanced to include:
- Interests and hobbies: Rather than doing a one time capture of hobbies and interests, it could be an ongoing capture of information on hobbies like, for instance, information on places travelled to, books read recently, movies watched recently, etc.
- Behavioral and Attitudinal data: Here again, it could be through surveys administered to the participating individuals periodically, rather than through one time collection of data at the time of account set up.
- Big ticket purchases: Ongoing tracking of purchase of big ticket items like a car, flat screen television, appliances, RTVs, etc.
- Brands used: Individuals can start with the list of brands they use for the items in their regular purchase basket and keep updating on a going basis.
- Establishments visited: It could be places of worship, gas stations, grocery stores, salons, libraries, eateries, etc.
- Etc.
Companies can subscribe to this Ultimate Customer Master. Based on an ID supplied by the aggregator the individual provides at the time of setting up an account, they should be able to request data for that specific individual from the system. There could be several modules that they can subscribe to. It could be basic demographics (which would include very basic details like Address & Contact Details), Extended Demographics (which would include other demographic details), Psychographics, etc. They should be able to get this data for a specific customer at a given point in time or as periodical updates for all the applicable customers.
The Business Model
To my mind, the one single thing that will determine the success of this is the currency of customer data. Obviously, the wider the breadth data collected and the deeper the level of details, more valuable and, of course, saleable, the data is going to be. However, the system will continue to add value only as long as the customer information remains up to date.
There is a couple of different core revenue models to consider for this:
- The aggregator could charge companies on a one-time basis for purchase of this data for a given customer and also an ongoing fee for updates.
- Also, the charges could be different for different modules like basic demographics, extended demographics, psychographics, etc.
- And the aggregator could sell campaign lists
- Given the scope of data collected, there is an opportunity to sell research on customer data as well.
I can think of a couple of ways the cost model can be addressed. The individual customers entering this data on a going basis are the ‘suppliers’ for this model and need to be treated as such. They could be rewarded in a couple of ways:
- The compensation to the individuals could be based on the quantity of data entered. It could be based on
- the width of information entered in terms of updates to different modules
- the depth in terms of providing updates to various data collection questions or options for each of the modules
- the frequency of updates
- It could also be based on their membership in the lists sold. For instance, if an individual happens to be a part of a campaign list sold to someone, he can potentially be compensated.
- A part of the individuals’ compensation can come from the research revenue as well. However, it may be difficult to assign the right source for a given research output
The Challenges
While the approach seems to be pretty simple and straight forward, a couple of challenges comes to mind:
- While the options proposed in the cost model look simple enough, some of them may be very challenging to implement. While it would be one challenge to come up with the models for compensation, it will be a totally different challenge to make the customers understand how they are getting rewarded.
- Needless to say, the sheer mass of data that is collected would be a challenge to handle in itself. However, we are already making a lot of progress when it comes to handling large data volumes. Indexing of web pages and handling them in real time by search engines is a good example.
- It is difficult not to think of Privacy Concerns when it comes to selling Individual’s personal data. However, in this case, given that the base data is ‘sold’ by the individuals, there is consent to sell. However, the individual should have the ability to opt out of the program as desired.
The scope for expansion
The potential for expansion of this system is unlimited. Imagine the following couple of possibilities:
- How would it be for the aggregator to partner with third parties like for instance for banks / credit card companies and major retailers to get items in the purchase basket? If the individuals can provide their credit card information, they could be used as a key to purchase credit card transaction data from banks.
- It need not be just businesses who would be consumers of this data. It could be even government agencies, Collection agents, etc.
While the need for this always existed, I believe that time is now ripe for implementation of the Ultimate Customer Master. Such a system would have been difficult, if not impossible, to implement till sometime back purely due to transactional costs. Essentially, we would have required a middleman to collect and input data into a master – the cost of doing that would have more than potentially surpassed the benefits. With internet available to most of the folks, it is like checking emails (or even visiting your social networking site like Facebook, for instance). And, more importantly, with the individuals’ willingness to share everything personal (in social networking sites, for instance) being high, it seems to be a matter of just riding on the wave.
) and also a figure (from 20% to 80% failure rate) but not many would try and ask themselves why did we go in for CRM? And even if you do ask this question to executives of a company which lives and breathes “Customer Relationship” they will give you a wide variety of answers like “To listen to our customers” or “To respond to competition” or “Our top management asked us to” to even “We had surplus IT budget” 
