So now that you understand the terminology and concepts let’s talk about business problems that can be addressed with this technology.
Inability to get to single view of customer because of matching issues
In the examples above, you can see where it can be a challenge getting the correct customer records into a single cluster. If you do not get all the same customer records together properly, you may not be treating particular customers appropriately. One example is not identifying your top customers because they are represented by multiple account numbers. Worse can be treating a very good customer poorly because you think they had only had one small transaction with you but in reality he just did not log in or use his frequent shopper card. This poor service could jeopardize the entire account.
It is not just customer records that have this problem. One customer we worked with had multiple vendor records in their system for the same service. The accounts payable department was unaware of this and processed the invoices twice because one clerk paid 7-11 and the other paid Seven Eleven. Had these records been correctly matched and merged, this would not have happened.
Increase the effectiveness of cross-sell and up-sell campaigns
Following on to the example above, you can also be missing opportunities to up-sell a customer because you are unaware they have the correct combination of products that would be a perfect match for a product that combines the currently owned products and enhances their value. Conversely, you could be offending the customer because you are calling them and offering them a better deal on a product they already bought from you for a higher price.
Inability to household data
If you cannot bring together members of the same household, you have three potential problems that might impact your revenue. The first is you can send the same offer to multiple members of the family, thereby increasing your cost of marketing. The second problem could turn out to be embarrassing at the very least. This is where you send different offers of the same product or service to different members of the same family. Finally, you could end up treating one member of the family badly because you think they are not a very good customer but in the meantime, the parents are excellent customers that become offended because you treated their child badly, even offended enough to move their account somewhere else.
Overstocking products already held in sufficient quantity
We worked with a customer that had another problem. The customer thinks he has unique part numbers for the products they use. However, when you profile the data, you see the part numbers are unique but the descriptions are not. Later, using fuzzy matching you can find other duplicates in the file. This leads to different departments ordering the same product, sometimes from different vendors. Now you have overstocking of the products and you are not getting your correct volume discounts because the product orders are going to different vendors. This can easily happen when the supply chain has automatic restocking built into the system.
Suboptimal freight utilization
We worked with a customer that had multiple UPC numbers in the system for the same product. The records had different weights and measures for the same product. This caused them to over bill or under bill for shipping depending on which record they used for calculating the weight of the shipment. Also, the trucks usually left the plant without a full load because the measurements of the boxes were not accurate.
De-duplication of customer file decreased disk storage requirements, postponing a need to upgrade server for a year
Sometimes, the duplication is so bad that eliminating the duplicates will decrease storage requirements significantly. Also, it can meaningfully increase application response time because the application no longer needs to read all the duplicate records.
Lost knowledge worker time
Because of some of the above examples, knowledge workers are forced to research customer complaints having to do with inaccurate customer billings, lack of quantity discounts, tracking shipments, etc. All pointing to duplicate or unconsolidated account records.
Inability to accurately calculate sales incentive compensation figures
Two issues with the data can cause this problem. One is the sales rep is represented in the system once as Bob DiNero and also as Robert DiNero. The other is when customer transactions do not have a consistent representation of the same customer name, for example GE, General Electric, GE Appliances, GE Energy, etc. This can lead to the sales reps not being compensated correctly.
Compliance and Management
The Office of Foreign Assets Control administers and enforces economic sanctions programs primarily against countries and groups of individuals, such as terrorists and narcotics traffickers. The sanctions can be either comprehensive or selective, using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals. All U.S. persons (which by legal definition includes firms) must abide by these sanctions—this is the meaning of compliance.
This is a different type of matching problem. This is where you match you customers against a government list often referred to as OFAC list. MetLife paid $22,500 OFAC fine for mailing one insurance claim check to Cuba. Another example is The US Treasury Department’s Office of Foreign Assets Control has fined GEICO General Insurance Company $11,000 for allegedly transgressing Foreign Narcotics Kingpin Designation Act sanctions regulations between September 2006 and June 2007. According to OFAC, GEICO provided an automobile insurance policy without an OFAC license to a person blacklisted as a “Specially Designated Narcotics Trafficker” pursuant to the Kingpin Act. OFAC did not name the narcotic trafficker in question. “The alleged violations involved the receipt of two premium payments totaling $2,265,” OFAC stated when announcing the fine. OFAC said that GEICO did not voluntarily disclose the alleged transgressions to OFAC. It added that GEICO “does not screen its existing policyholders’ database for SDNs as the SDN list is updated but only on an annual basis.” “GEICO has committed to making improvements to remedy this gap in its OFAC compliance program,” OFAC stated.
Inability to calculate total global exposure
A number of financial firms were caught with their pants down when large corporations imploded. They did not know they had such a large exposure to the company because the corporations were represented in different ways through the firms system.
Increasing revenue through improved targeted marketing
By properly identifying their best customers and ones that have certain products or combination of products, companies can significantly increase their revenue by targeting the correct customers or prospects for the correct products.