CRM in China (Part I)

Who would have thought that with a simple “Dear Mr. Li…” you can address more than 50 million people in China? And this was not the only surprise when I started to investigate “CRM in China”.

In the past decade China has established itself as the most important workbench for the global economy. Accordingly, China was more interesting for Supply Chain Management than Customer Relationship Management. However, things have changed in the recent years and China is becoming an increasingly important market for both industrial and consumer goods.

Hence, more and more CRM initiatives specifically address the Chinese market and it was probably only a question of time that I had to start working on CRM solutions addressing the specifics of the Chinese market. The first request was related to a concept for Customer Master Data Management in China and I was lucky enough to find a true expert on “CRM in China” here at Cirquent: my colleague Ulf Reinhardt who is leading the market roll-out for a CRM Programme in China.

So here are the key facts I learned from Ulf:

  • There are not only more people in China as in all other markets in the world, but as few as 13 family names already cover half of the population. The name Li for example is shared by close to 100m people. Compare this to the mere 700.000 Müllers we have in Germany and you get a rough idea of what this is about. This subject is further complicated by the fact that Chinese often choose western first names which they use interchangeably with their native names.
  • At the same time data quality tools as they are popular in the European and American markets for address standardisation and de-duplication have not proven to be ready for the Chinese market. I really ask myself: what are the vendors are waiting for? This market is really in a desperate need for a smart data quality solution. Although: Building such solutions is not easy:
  1. One challenge for data quality tools is the extremely high rate at which new residential and industrial areas are developed. In the last decade the housing market had constant growth rates between 20-30% (see this study, pg. 14).
  2. Another reason is that due to these dynamics Chinese consumers and businesses move much more often than in the relatively stable markets we know. As a consequence, CRM practitioners assume that within 12 months, half of the customer data is already outdated.
  • And I have not yet mentioned the fact that all this customer data is only available in a script that looks distinctively foreign and for which a transcript only exits in one direction but not the other.

So how can you address these challenges in a CRM Programme, without starting (and funding) your own research project?

  • Customer Identification: Due to the few last names in use, the ambiguity around given names, the high geographical mobility and the lack of mature data quality solutions make the identification of customers a tough challenge. Hence we had to search alternative approaches like identification through mobile phone numbers, email addresses or social security numbers.
    Also ask yourself how you can motivate your customers to keep their data current. Offer easy to use self service solutions and get customers update their data by incentivised campaigns.
  • Additional address lines: Especially for international accounts where the CRM solution is to be used locally in China and globally in Europe or the US, I recommended to store addresses and names in local and global (pinyin transcript) format. This will allow you to properly address the customer locally in China and to work globally with the account data.

I will continue to collect our best practices for “CRM in China” and publish an update in a few weeks. Then probably looking at the Chinese customer’s wants and needs in marketing, sales and service.

Are there any other topics of “CRM in China” you would be interested in? Just let me know — and stay tuned!

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