Topic: Data Tracking

Topic: Data Tracking

Get Real with Your Customer Count

Bloated numbers sound good on paper, but DataFlux's president and CEO explains why a more accurate analysis of your user base results in better marketing.

"Billions and billions served." This famous claim underneath the golden arches conveys to consumers that wherever they visit their local McDonald's, they will get exactly what they have come to want and expect. But in the eyes of marketers, McDonald's mantra demonstrates worldwide dominance in its industry.

The influence of the "billions and billions served" approach is far reaching: Marketers frequently feel the need to quote the size of their customer base to demonstrate leadership and stability. And today's web economy has further emphasized the need to evangelize a bloated user base. Look no further than the MySpace and YouTube acquisitions where industry giants with deep pockets paid big bucks just for access to larger user communities.

With companies receiving information about new and old customers from an increasing amount of online and offline channels, it's easy to lose track of exactly how many customers you have. In January, the Wall Street Journal's Carl Bialik wrote a thoughtful piece entitled, "Counting Internet Users Remains a Guessing Game." Bialik cites various instances of how difficult counting viewers on the internet can be. 

One pervasive problem for many organizations is that different business systems -- customer relationship management (CRM) applications, billing systems, customer data warehouses -- all contain information on customers. The data populating each of these systems might reflect a different "truth" about the customer, and each probably contains inaccurate or unreliable data.

No matter the situation, it's very easy for customer counts to get far off track. And for most marketers, it may be tantalizing to ignore any potential problems and tout a more impressive customer base. Unfortunately, this "the more, the merrier" attitude can be both blinding and potentially damaging to a company's marketing objectives.

Marketing programs are only as good as the data about customers and prospects; therefore, operating under the guise of an inflated customer base can impact everything you do. The most obvious case would be direct mail campaigns, where costs map directly to the amount of targets one is attempting to reach. Or, if your company uses online communication, incorrect data about a company's customers can drastically impact who you believe your customers are, what their preferences are, and how you should interact with them.

Take the case of one insurance website that allows consumers to compare multiple rates online for the best automobile, life, home and other types of insurance coverage. The company processes around 400,000 transactions each day and, until recently, believed it had anywhere between 14 to 20 million customers. 

With this wide variance in its potential customer base -- and with some proven data quality problems in its customer data warehouse -- the organization started a data quality project to ensure it was making decisions based on accurate information. By implementing process changes and data correction technologies, the company began to improve the quality of its database and ensure that the newly entered data was correct.

After re-engineering its methods for data management, the website discovered it only had eight million unique customers; essentially removing half of its perceived customer base overnight! However, instead of mass hysteria spreading throughout the organization, the company understood that a more accurate customer base provided a significantly better understanding of its customers and how best to serve their needs. This valuable information can create customized marketing campaigns for both partners and consumers, saving development time and overhead costs in the process.

And over the long haul, that's the best way to increase your customer base: improving existing customer relationships while setting the stage for more streamlined customer outreach efforts in the future. It might not be "billions and billions" served. But, it's a reflection of reality, which isn't a bad place to start.

Tony Fisher is president of CEO of DataFlux. Read full bio.