The notion of ‘single customer view’ (SCV) has been at the forefront of financial institutions’ minds as the deadline to comply with the Financial Services Authority’s (FSA) Financial Services Compensation Scheme (FSCS) approaches.
The scheme ensures that, in the event of a deposit taker (e.g. a bank or building societies) failing, compensation is paid out within 20 business days. What is key however – and this is where the SCV comes in – is that overpayment to depositors in the scheme should be minimised, so an individual or company with multiple deposit accounts with the same institution is only paid once, up to the maximum compensation of £50,000. In addition, by creating a robust SCV, the institutions can also quantify and report on the volume (and value) of customers that are able to claim compensation.
However, achieving a SCV is imperative whatever industry you are in, especially considering the complexity of the relationships you will have with your customers and given that, more frequently than not, the information you hold about these customers will be spread over different systems.
Getting the approach right
The increased airing that SCV is getting at the moment hides the fact that this approach has actually been around for a long time. Experian has been creating SCV for clients across the banking, utilities, telecoms and other sectors for more than 20 years. The goal of this process varies – from marketing, through to account management, to billing integration (and more recently the FSCS requirement) – but the approach remains.
A key aspect of SCV is that it is a process, and one that needs to be tailored to individual client needs. Applying a one-size-fits-all approach will rarely produce the appropriate result. In fact, it should be introduced as a core part of data management and the business rules that are appropriate for the goal in mind should be set accordingly. This requires a close working relationship between the client and supplier; including an in-depth understanding of the customer data sets, and also the business processes at the client end that lead to data entering the systems and of the goals of the programme.
Customer management
If done properly, tailoring SCV can radically improve marketing results. At the most basic level if a company has three core systems that hold around 90,000 records, it will need to achieve a SCV to decipher whether the company has in fact got 30,000 customers with three products or 90,000 customers with one product. Only when you fully understand how many customers you truly have, can you then define how to build on those relationships.
Different products, services or situations will call for fundamentally different styles of customer management and SCV allows you to tailor this to specific clients accordingly. You will instantly be able to see if a client is using the full scope of your offerings. For those that do, your efforts will be concentrated on delivering on your products with full satisfaction to retain their business as best you can.
At the opposite end of the spectrum, if a client is only using one product, and if the propensity models you have in place identify the need for other products, then you have unearthed a sales opportunity. At that point it is possible to develop strategies or propositions to realise the potential lift through cross selling. You cannot do this correctly and consistently without a clear idea of how many customers you actually have and what products or services they are buying from you… this is a single customer view.
Merging benefits
Another key situation where SCV becomes indispensable is when a company merges with another. When two companies and data systems come together, adopting a SCV approach as an integral part of the merger process is important. There can also be great benefits of adopting SCV thinking pre-merger. A third party can confidentially create a SCV across the separate portfolios to discover what the combined portfolio would look like and ultimately to assess if the merger is worthwhile for both parties.
Hopefully the benefits are speaking for themselves, but where there are pros, there are inevitably cons. My sole warning and the main peril of SCV is accuracy. Be clear of the desired result and ensure that you are prepared and equipped to incorporate it for the foreseeable future. Use all the resources available to you to ensure maximum accuracy in the implantation and maintain it. It is not a quick fix, it should change the way you work forever while delivering a clearer, more focused view of your business and its customer.
