A quick scan of the journals suggests that the trend called Customer Relationship Management (CRM) – once the temple that held the Holy Grail of data – seems to have died abruptly in the late 2011. Around the same time, the behemoth known as Big Data began its meteoric rise.
Is this a case of premeditated trendicide? Or did our friend CRM go underground and reemerge as the inner soul of a Social Media-driven mega-trend?
CRM Tracks Are Clear, To a Point …
Searches on Google as well as on the insurance technology journals find clear evidence of insurers, brokers, and suppliers who were acquiring and implementing CRM solutions to allow a comprehensive view of each customer’s information, contact points, preferences, previous purchase decisions, and relationships. The investments were non-trivial. Buying software, data models, and supporting technology was expensive, and converting data was time consuming, but the benefits of having all these data for customers was very tempting.
Then a new actor entered stage left: Master Data Management (MDM). MDM is a model for the governance and management of data as a corporate asset. It was (and still is) critical in organizing corporate resources to attain a singular view of the customer. But it takes the investment in CRM to a new, scarier level.
A 2012 report from Aite Group says, “As with any major IT project that cuts across functional boundaries within organizations, MDM is much more easily said than done. Because of MDM’s potential benefit to the industry, however, Aite Group predicts that the total market for MDM solutions and services sold to insurers will grow rapidly between 2011 and 2014.”
CRM looked good to executives when it looked small and contained. With MDM, however, it started to look like it might be bigger (and more expensive) than an electronic card file.
And that’s where the tracks of CRM end for insurance.
… DNA Tests Are Not Conclusive, But Big Data Looks Very Familiar Somehow
Since 2011, the technical, business and even popular media have been awash with stories on ‘Big Data’. There are various definitions, most of which uses examples. Wikipedia defines it in zen-like terms, by describing what you can’t do with it “Big data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.”
Twitter and Facebook create Big Data, capturing consumer’s hopes, desires, likes, dislikes, and favoured suppliers in free form text. Telematics units create Big Data, capturing consumers’ driving behaviour in minute detailed measured at the second and sub second level.
After the initial shock, most senior managers get the importance of Big Data. As we have noted in this space, CEOs, marketers, analysts have figured out if they can get these data correlated with actual buying activities and claims activities, there can be greater precision with marketing, underwriting, servicing, etc.
And greater precision means greater profit opportunities in a landscape that has few alternative approaches.
And this is where CRM is hiding …
But this is not a trend shift (from CRM to Big Data) for the real winners. When we take the insights that Big Data offer us as the macro level (most people of a certain type tend to prefer service in a certain form, e.g.) and start applying at at the individual level (call centre personnel getting different scripts based on the profiles of the incoming callers), we see where CRM now lives. And where real power – and the real need for governance using models such as MDM – resides.
Amazon is the classic example. When I sign on, and start browsing looking for books, music, electronic gadgets, and so on, behind the scenes, Amazon is using data from all of my of activity (my CRM data) and comparing it to its large data bases of consumers with similar profiles (Big Data) in order to tell me at the end of my purchase of Warren Zevon’s Greatest Hit CD, “People like you have also purchased Waring Blenders.”
So What Do You Think?
Have you seen a disappearance of CRM in favour of Big Data Projects? Or is there an effort to align the macro insights from Big Data with the micro precision of properly organized CRM using a Master Data Management model? Let us know below.
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