Customer data: how UK companies fail to use it

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By: Wise Marketer Staff |

Posted on May 27, 2002

Very few UK businesses are collating or exploiting their customer data adequately according to the findings of research carried out by UK CRM consultancy firm, Detica.

The research report, Converting Customer Data Into Effective Decisions, shows that only 13% of companies can be categorised as leaders when it comes to collating customer data and subsequently using it to improve customer relationships. Another 32% were classed as the 'followers', having good data in certain areas but only using it to support a limited number of business functions. Another 15% of companies were classed as 'under-achievers', having some good customer data but making very little use of it, and the remaining 40% were categorised as 'strugglers', having very little good data and limited ability to exploit what they do have.

Colin Sheppard, strategic business development director at Detica said, "The research highlights the challenges businesses face in developing a good understanding of their customers, and in using the resulting insights effectively across the enterprise." Sheppard added, "Our research shows significant differences across different markets. In particular, telecommunications and utility companies have been shown to be lagging well behind those in the financial services and travel, transport and leisure sectors."

Data usage
When it comes to the types of data being used, most companies are good at capturing basic contact and billing details but few use additional descriptive information such as demographic or lifestyle data. When asked if their business had a good single view of the customer, no industry sector performed well. Just 17% of travel, transport and leisure companies said they did - compared to 27% of utilities, with telecommunications (55%) and retail banking (60%) performing the best.

According to Sheppard, creating a single view of the customer is a key business requirement which very few companies have truly achieved. This problem hampers the effectiveness of marketing, sales and customer service operations alike. And when asked how their customer data is used, companies in all sectors were strong in using it for acquiring new customers (if fact, many cited this as a reason for developing a database in the first place). Yet few are using it to target cross-selling, retention and win-back campaigns.

Follow the leaders
The leading companies are focusing on customer lifetime value. They are collecting the right data and using the right skills, processes, tools and customer data management technologies to make sure that key customer insights are available wherever they are needed, in all parts of the enterprise.

The study is based on detailed interviews conducted by Metrica Research during the first quarter of 2002, with 100 businesses across five industry sectors from the FTSE 100, FTSE 1000 and FTSE 5000.

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