Office Depot says it is in the process of building a new data warehouse that will leverage information from multiple sources into a single, flexible customer hierarchy that will allow it to use customer relationship management tools to drive
new marketing and sales opportunities.
In a Web-based seminar Tuesday hosted by Teradata, the global office retailer discussed how it is overcoming the challenge of multiple brands and multiple channels to clean up its data warehouse and fuel new CRM applications.
In addition to its retail stores around the world, Office Depot also operates 40 call centres, 40 distribution centres and other brands such as the Viking office product brand.
Kathy Koontz, lead applications developer for Office Depot, said the challenge was integrating the company’s single data warehouse to function across multiple channels with multiple business processes, while still maintaining those separate brand identities and processes.
“We had a number of fragmented processes, and there was a lot of redundant data and tools,” said Koontz.
That resulted in a high cost of ownership, reconciliation issues, and it was difficult and slow to implement enhancements, he said. Since the data warehouse was providing value to a core group of users, the firm couldn’t tear it out and start again, but it also couldn’t easily meet the broader uses Office Depot had in mind, he added.
“It was kind of like having to change the tires on the truck while it was still going down the highway,” said Koontz. “We wanted to build new foundations on our data warehouse.”
Office Depot took a base camp approach, creating new data structures for all their brands to grow into. Its existing sales data is being integrated into a combined model, while the project team is bringing its customer identification management in-house from a service bureau. Koontz said the work will involve bringing together credit marketing, call centre and Web site data.
“It will give us an enterprise view within the data warehouse while allowing us to better target customers based on their relationships from the operational system,” said Koontz.
Office Depot is also using Teradata’s Customer Relationship Management mailing selection tool to leverage that hierarchal data. Koontz said it’s important to integrate your data with your business processes, and have a data structure that accommodates varying business needs and can accommodate ongoing enhancements.
Koontz said the key to its success so far has been building a stronger sense of trust between its business and IT people, through things such as cross-functional team meetings, brainstorming, problem-solving sessions, and social outings.
“IT partnered with business on developing clear requirements, and then IT effectively executed against those requirements,” said Koontz. “This synergy really drove our progress up the mountain.”
Laura Preslan, research director for AMR Research Inc., agreed with Koontz that IT and business need to work together for CRM to be a success. She added CRM needs to be treated as a core business project, not just another IT project.
However, before companies invest millions in a CRM solution, Preslan said you need to make sure you have clean data.
“Without accurate customer data every report you’re running is wrong, clean customer data is really a prerequisite for every other project you’re doing,” said Preslan. “All of this data is the foundation for marketing.”
First, Preslan said the severity of the problem must be determined; reports should be audited to identify multiple entries. Start with a fix at a departmental level, create a centralized CRM warehouse across the enterprise, and then invest in real time technology to make sure new data entered is cleansed and accurate.
Once this foundation a whole new world of event marketing, defined taking everything a company knows about a customer and translating it into the right offer delivered at the right time, is available.
Preslan said the do-not-call list legislation in the U.S. has forced companies to shift from outbound to inbound marketing, capitalizing on every interaction they have with a customer. Similar anti-telemarketing legislation is being considered in Canada.
Data mining allows patterns to be identified, for example every person that buys a yellow shirt also buys a purple pen, allowing the software to generate the right offer for each customer. The result is a better chance of making a sale, and higher revenue at a lower cost of sale.
“Once the basics of CRM are in place, the whole world of advanced marketing and revenue growth rally opens up,” said Preslan.