1. Customer Information Strategies: Delivering Value From Customer Information Erin Kinikin Vice President, Research Director Forrester Research

2. Spending on Customer Information is Increasing Source: The State Of Technology Adoption, May 2004, Forrester Research

3. But results aren’t always in line with spending “All our customer data is in silos by product line — we can’t recognize customers across products” “It’s not just providing the information — it’s teaching people how to use it” “By the time we get back to a customer at risk -- they’ve already left.” “Star schema? No, we don’t have a snowflake schema either, we have a blizzard!”

4. Different Industries Target Different Goals Information Service levels, contracts, identity validation, privacy preferences Cost of integration, CRM adoption rates Goal Product portfolio, risk exposure Compliance Risk mitigation Lower IT costs Profitability, retention Revenue, sales effectiveness Financial services, insurance, high tech Insurance All Banking, retail, communications High tech, pharmaceutical Industry Net new customers, product mix, interaction history Purchase trends, product mix, growth

5. Building a Customer Information Strategy is Like Building a House

6. From Data to Business Value Strong governance model Clear strategy and ROI Comprehensive information practices Continuous measurement

7. Governance: Build the Right Team Prioritizes initiatives Approves funding Resolves conflicts as required Executive steering committee (ESC) Customer information strategy group Cross-functional program team Data stewards Project teams Empowered by the ESC Defines how information can be used to drive value Recommends and justifies The critical bridge between business and IT Executes the action plan Within the LOB or IT Manages a discrete project Monitors post-execution performance

8. Example: Insurance Company Executive steering committee (ESC) Move from product to customer centricity Central funding — $25 million over five years Customer information strategy group New function establishes enterprise processes Uses pilots to demonstrate value Cross-functional program team Central compliance and privacy management Consistent processes across LOBs Data stewards Project teams Single application process standardizes customer inputs Security model protects proprietary information

9. What it Means to You Pick a business sponsor with a vision for change Use information and pilots to prove the vision Plan for organizational and process change

10. Information Must Support Customer Strategy CRM value plan Information Corporate business objectives Measure business performance Market share, retention rates, profitability, segment ownership Customer-focused approaches in support of business goals Analyze, segment and target Value, propensity, risk, products, trends Business goals Why? Strategies What? Tactics How? Specific business actions required to implement each strategy Initiate action (e.g., trigger events) Incentives and outcomes

11. Customer Example: Retail Bank Increase retention and value Promote product mix to drive loyalty New customer program, retention alerts Customer retention Share of wallet Usage of online channels CRM value plan Information Optimal product mix by customer type Customer preferences Behavioral detail Trigger events: new customer or account, address change, change in usage pattern

12. What it Means to you Start with a business goal Define how information can support the strategy Develop use-case scenarios to make the strategy real

13. Establish Information Processes That Support the Strategic Plan Maintain Establish clear owners Define maintenance rules Build ongoing validation and alerting processes Standardize, consolidate, and enhance Breadth of data Cross-reference keys Build aggregates Define update frequency Establish a source of record Assess the state of the data Define business rules Address data quality at entry Define exception handling

14. Customer Example: Retail Banking Goal Increase customer penetration Contact center and branch desktop Marketing automation Data sources Staging area Xref Householding engine Highly parallel, custom wrappers around Trillium and Abinitio Solution Customer data from all major lines of business Weekly match/merge and householding process — 285 million records per week Linkage between analytic and operational systems Benefits Better alignment of products to customer needs More timely customer response

15. Customer Example: Pharmaceutical Goal Faster insight to prescription patterns More comprehensive and accurate data Siebel Marketing system 12 data sources Customer data warehouse Siperian customer hub Solution Customer hub automates consolidation Change requests via SFA Results Reduced load times from one month to one week Add new data sources in days, not months

16. Setting Policies and Practices — Data Stewards Establishes policies and best practices Maintains a policy Web site Monitors compliance Arbitrates disputes Identifies company of record Addresses match/merge issues Monitors quality over time Rapid response to sales requests Local quality monitoring Central quality group Ongoing cleansing Regional business operations

17. Customer Example: High Tech Goal Streamline order processing Sales efficiency Unverified Pending validation Active Inactive Leads Hot opportunities, Web orders Validated customers Inactive contacts or accounts Solution Single customer master Tiered stewardship model Results Reduced cleansing costs by 40% Reduced sales order time

18. What it Means to you Stop bad data at the point of entry, if possible Build the people processes to maintain the data Understand data timeliness requirements

19. Measurement: Measuring the Right Things Business goals Why? Strategies What? Tactics How? PerformanceDiagnosticInteraction CRM value plan Type of metrics

20. Customer Example: Retail Bank Performance Market share, retention, customer profitability Increase retention and value Promote product mix to drive loyalty New customer programs, retention alerts Diagnostic Products per customer Interaction Response rates, activations, usage metrics CRM value plan Type of metrics

21. What it Means to You Match the metrics to the goals Use diagnostic and interaction metrics to monitor and tune Make sure incentives are in line with customer objectives

22. Recommendations Remember that the customer view is only the foundation Make sure leadership owns the vision and the right team is in place to deliver Define a clear strategy and specific business tactics to drive usage and value Put the proper measurements in place To avoid this…

23. Erin Kinikin +1 408/327-4321 ekinikin@forrester.com www.forrester.com Thank You Entire contents © 2004 Forrester Research, Inc. All rights reserved.

24. What is the current state of your customer information? 1. Inconsistent 2. Mostly consistent within a function or line of business 3. Consistent across functions and lines of business 4. Only consistent in the data warehouse

25. What is the biggest barrier to leveraging customer information? 1. Lack of executive commitment 2. Project and technology expense 3. Inconsistent processes and policies 4. Barriers to sharing information 5. Unclear business value 6. Other business priorities 7. Other IT priorities

26. What is the single greatest driver at your company for better customer information? 1. Cross sell / up sell 2. Customer retention / tiered service 3. Cost savings 4. Improved compliance (privacy, Patriot Act, etc.) 5. More timely response to customer change 6. Better coordination across business units or geographies 7. Other