ZS Interview: Customer Data Management Becomes a Cornerstone of Sales and Marketing Execution

Jeff Gold

From data-rich industries like pharmaceuticals to businesses such as high-tech firms that may lack detailed customer information, building and maintaining good customer data management (CDM) has become essential for effective sales and marketing.

The calculus is simple: To craft effective sales and marketing strategies, companies need in-depth customer insight, so they know what, how and to whom they communicate. Data management is a fundamental part of generating such insight.

Yet sales and marketing executives may shy away from investing in CDM or fully embracing it. However, companies that embark upon CDM or are supplementing existing operations are finding that doing so not only provides competitive advantages, but is less expensive than operating current systems and processes.

ZS Principal Jeff Gold spoke about the need for companies in all industries to invest in customer data management, detailed common errors he sees in the field and offered his thoughts on how companies can improve their customer data management overall.

What makes customer data management especially important today?


JEFF GOLD: No matter the economic environment, companies need to grow their top line and their share of the market. To do that, they need to find competitive advantages, which comes from customer insight—companies that understand customers have the best chance of succeeding. To attain high levels of insight, they need sophisticated customer data management.

Another thing to consider is that companies with limited customer profiling, analysis, targeting and segmentation tend to spend a lot of time and money on the “wrong” customers. There is often a lot of waste resulting from inferior customer data management. Sales forces interact with customers on a day-to-day basis, and they need the detailed and accurate customer information that your competitors’ sales forces already have.

Are companies making the proper investments in data management?


JEFF: We’re seeing some companies investing enormous amounts of resources in effective systems, purchasing external data and integrating their internal data—creating a good picture of their most valuable customers.

However, at most of the companies I talk with, the biggest issue is resources. IT is expected to provide sales and marketing operations with customer insights, but they don’t have the tools or resources to do so as effectively as they would like.

What do sales and marketing executives fear most about mismanaging customer data?


JEFF: They’re most afraid of spending limited budgets on areas that are not going to give them the return on investment they need. They’re concerned the information on their customers is inaccurate or incomplete, and that they’re not optimizing their companies’ resources, unnecessarily losing market share.

Most of all, sales and marketing executives fear that they’re missing out on opportunities that competitors are not. They think: If we’re not getting customer attributes and potential correct, but the competition is, then we’re really in trouble.

How do different industries compare in regard to CDM?


JEFF: Some industries have better customer data, but all industries are struggling to gain a clear view of who and where their best customers are, and how they can be best served—and doing so in an automated manner instead of the high-cost, ad hoc fashion that they’re accustomed to.

That said, within health care, customer data management is a major challenge. Companies are able to receive information about physicians and hospitals, and about what they’re purchasing or prescribing across an entire market. It’s an enormous challenge to tie all of these data sources together and understand what they’re spending on each customer, as well as determining the promotion response and the ROI for those investments.

What are the biggest challenges in designing and implementing a CDM solution?


JEFF: We need to recognize how our customers are going to derive value from the data, and do so before going through the business rule and process design, and accurately matching customer relationships and merging data from different sources. Otherwise, most of the investment could be wasted. I’ve seen companies that have spent more than $1 million on customer data management and forgot to consider how the investment will affect the end user. When they completed their projects, sales and marketing actually didn’t see a change in how they were doing business.

Another challenge I’ve seen is companies trying to implement a 100% perfect solution the first time, which results in complex process maps and a scope that becomes so large it would take years to implement, if they can at all. If these companies would prioritize—if they’d ask themselves, “What is the 60% or 70% of this that we could implement in a few months?”—they could increase their capabilities quickly. Organizations can find out where quality needs to be 100% and feel comfortable where it’s OK to be at 70% of perfection.

What other challenges are there?


JEFF: Something else that I see is that business functional groups may not understand the relative complexity of putting together information they’re asking IT to deliver. For instance, they may ask IT for three items to complete—one might take a week, one might take a month and one might take a year, but the discrepancy may not be apparent to the business stakeholders.

Conversely, IT may not be aware of the business impact of each project. One project might help increase sales, and one may not have an impact at all. Project stakeholders need to communicate more, sharing their priorities and dependencies.

What additional advice can you share about CDM?


JEFF: A customer data management solution doesn’t need to cost a lot, and it doesn’t need to take a lot of time to deliver results—you can see better top line, better analytics and lower costs, as a lot of the ad hoc data activities that may rely upon full-time personnel can be automated, eliminating the need for much of the work currently done manually. These capabilities can be delivered quickly and inexpensively, and reduce the cost to deliver those to sales and marketing.

But even though ongoing operations may be relatively inexpensive, isn’t there a high initial investment?


JEFF: There are a couple of ways we help clients build these capabilities at lower costs than they expect. When companies work with a partner that uses a solution that’s been tested over time, that partner has assets to leverage—ETL code and processes, data models, Web-based user interfaces for data stewards to manage the process and reach key customers. Rather than starting from scratch and designing a solution from nothing, we’re configuring a solution that’s already 60% to 80% built, but specifically for that organization’s particular needs.

About the Expert: Jeff Gold




Jeff leads ZS’s global Business Intelligence practice area. He has enabled effective strategies through business intelligence and sales and marketing effectiveness for approximately 100 different companies in numerous industries.