MDM solutions cost a lot of money and take a lot of effort to implement, but they are worth it to gain the elusive “single view of the customer.” However, every MDM solution at every organization has a critical flaw: it flags anywhere from 10-20% of customer records as “suspected duplicates” that it cannot definitively match to an existing customer identity. These “suspected duplicates” either (1) require manual review and resolution, costing time and effort, or (2) are left unresolved, leaving the MDM riddled with duplicate records and significantly eroding the business cases that justify having the MDM in the first place.
Luckily, Verato Auto-Steward™ can help companies get the most out of their MDM investments. It is a cloud-based plug-in for MDM technologies that automatically finds and resolves the missed matches and duplicate records in an MDM technology—including automatically resolving the “suspected duplicates” that MDM technologies cannot resolve on their own. For example, a recent customer was able to reduce the number of “suspected duplicates” in its MDM by millions within weeks of integrating Verato Auto-Steward.
MDM Solutions Are Really Expensive, but Really Worth It
Since the late 1990s, traditional property and casualty (P&C) insurance companies have recognized the value of their customer and prospect data and have focused on wrangling this data to improve their operations and their competitiveness in the market. These companies have invested heavily in Master Data Management (MDM) technologies to aggregate and unify this data to gain the elusive “single view of the customer.”
The cost of MDM solutions is significant both in the capital to purchase the software as well as in the process and resource changes to support its deployment. But P&C insurance companies have built business cases related to gaining a single view of the customer that more than justify the cost of purchasing and deploying MDM solutions.
Some of these business cases focus on service improvements to the customer to improve acquisition and retention, while others focus on improving efficiencies in claims and service processes or reporting on customer-related activities and acquisition costs. As one example, a P&C insurance company that deployed an MDM solution to improve customer acquisition was able to increase its products-per-customer from 1.2 to 1.4, which resulted in tens of millions of dollars of more premiums.
A Costly Choice: Data Stewardship vs. “A Single View of 80% of Your Customers”
While MDM solutions can be worth every penny, they force P&C insurance companies to make a costly choice: either invest hundreds of thousands of dollars and an enormous amount of manual effort into a data stewardship program, or gain a single view of only 80% of their customers and thereby erode the business cases of having the MDM solution in the first place.
Let me explain.
MDM solutions face enormous challenges in accurately matching all of a company’s customer records and associating them with the correct customer identities. This is because MDM technologies use customers’ demographic data to make these matches, but demographic data is notoriously error prone, out-of-date, incomplete, or inconsistent across customer records. And no MDM matching algorithm, no matter how sophisticated, can overcome such poor-quality data to automatically make all of the correct matches.
Because of this, every MDM solution on the market is programmed to flag “suspected duplicate records” whenever it cannot automatically determine whether two customer records match. These suspected duplicates occur at such a high frequency that their volume typically ranges from 10-20% of the overall customer population.
These potential matches force P&C insurance companies to choose between (A) creating a data stewardship program whereby each potential match is manually reviewed and resolved by staff, or (B) leaving the potential matches as duplicates in their MDM.
The first option can cost hundreds of thousands of dollars per year for many years—and that’s after the costs, headaches, and organizational challenges of creating a data stewardship program in the first place. And even if you create a data stewardship program, not all of your potential matches will be resolved right away, delaying the business value of gaining the “single view of the customer.”
The second option erodes the business cases a company has created around obtaining a single view of the customer: if 20% of customer records are duplicates, then one in five interactions with a customer will be sub-optimal; the service and sales efforts leveraging a single view can only provide value one out of five times; analytics reports will be skewed by as much as 20%; and you’ll only be gaining a “single view of the customer” for 80% of your customers.
Ultimately, the planned business value of having the MDM solution degrades or disappears relative to the costs of having a stewardship program or of only gaining a single view of 80% of your customers.
Get the Most out of Your MDM Investment with Verato Auto-Steward
Verato offers a simple solution to ensure you don’t have to choose between manual data stewardship or gaining a single view of only 80% of your customers. Verato Auto-Steward is a cloud-based plug-in for MDM technologies that automatically finds and resolves the missed matches and duplicate records in your MDM, including automatically resolving the “suspected duplicate records” that MDM technologies have flagged for manual resolution.
Verato Auto-Steward can automatically resolve these suspected duplicates because it uses a totally new approach to identity matching called “Referential Matching.”
Rather than directly comparing the demographic data from two patient records to see if they match, Verato instead matches that demographic data to its comprehensive and continuously-updated reference database of identities. This proprietary database contains over 300 million identities spanning the entire U.S. population, and each identity contains a complete profile of demographic data spanning a 30-year history. It is essentially a pre-built answer key for all customer demographic data.
By matching records to this database instead of to each other, Verato can make matches that conventional MDM matching technologies could never make—even customer records containing demographic data that is out-of-date, incomplete, incorrect, or different.
Verato Auto-Steward has already been widely deployed across the U.S. and has integrated with some of the leading MDM technologies in the market. For example, a recent customer was focused on ensuring proper sales commission payment, accurate customer pricing discounts, and customer acquisition reporting. But their out-of-the-box MDM solution could not match millions of customer identities without manual data stewardship. Not only was this manual stewardship investment costing a lot of money, but the “suspected duplicate records” were still accumulating faster than they could be resolved. This drastically reduced the overall value of the MDM deployment. But with the addition of Verato Auto-Steward, this customer was able to reduce the number of “suspected duplicates” in its MDM by millions within weeks of integration.
Ultimately, Verato Auto-Steward enables P&C insurance companies to ensure that the original business cases for purchasing their MDM solutions are still achievable without significant additional investment.