Four C’s of Master Data for Commercial Relationships

Using Standard Data Structures to Unify Business Records

As businesspeople we may often ask questions that, on their surface, seem to have simple answers. Who are our top customers? How are we doing in those new regions? Are we increasing penetration of key segments? They sound simple — but getting answers to those questions can be hard. 

Simple doesn’t mean easy. When you ask for the top something, or market somewhere or type of segmentation, you need to make sure everyone else knows what you mean by top, and market, and type. Does your enterprise, or division, or even your department, have a common definition for any of these fundamental dimensions of your business? And why is this even important?

 Making relationships is what your business is all about. Everyone in your business will certainly agree that they want to grow relationships, build relationships, create new relationships, mitigate the risk of some relationships, stay in compliance with the specific regulations of certain types of relationships. And if you don't have relationships, you don't have a business. If you don’t understand that your business is about relationships, then you probably don’t understand your business. 

 Customer, vendor, partner, and prospect are the fundamental elements of commercial relationships. To systematically manage those foundational entities, they need a common structure. A simple approach to applying a standard structure begins with the “Four C’s” of commercial relationships: Code, Company, Category, and Country. 

Code

Every record in a database has a code — somewhere. Once a code is put on a record, it “exists” in that database. “I am coded, therefore I am.” You need a code to make sure it is unique. But since every system has its own set of codes, you probably have more than one across your multiple workflows, departments, and regions. And if you can tie them together, that is your shortest path to a single version of that commercial relationship.

Company

You need to know the hierarchical structure — a parent/child family tree — to know where an entity belongs or who owns it. Hierarchy has multiple levels, from the local branch, divisions, and subsidiaries, all the way up to a global ultimate parent. Bill-to, ship-to, plan-to, sell-to are all part of hierarchy. The bigger the company, the more complicated the hierarchy. Are you selling to all the relevant divisions or branches of a given a family tree?  Do you have a relationship with it already? Is it related to something that increases your risk? Are there terms you could apply because of the ownership that you wouldn’t have known about? You can’t tell unless you have a full hierarchy. 

Category

You need to know what kind of entity you are dealing with, especially if you don’t have much of a relationship with it yet. There’s a lot of granularity and nuances to categories. Types and sub-types, channels and sub-channels, genres and sub-genres. Categories define markets, enable segmentation, and are the denominator for penetration analysis. Targeting is often based on category attributes when you try to find likely prospects based on industry, segment, sub-segment, etc.

Look at the bottom of your reports; if you dig deep enough, you’ll probably find a category you call “Other.” If you are not diligent, it could be one of your fastest growing segments. One D&B client had a category labeled “DK.” When he was asked what that stood for, he replied, "Don't know." So look to leverage a standardized category structure wherever possible and practical.

Country

You need some type of designation for geography. Where is the company or entity? Geography has hierarchy, too — state, county, metro area, province, city, postal code. Media market, sales market, measurement market — there are many different configurations of geography depending on your use case. Agreeing on a common definition of market will clear up lots of confusion between sales, brand, finance, and operations when you simply ask — How am I doing in New York or Major Metros or EMEA?

A code enables you to know an entity is unique. A company lets you know who owns it. A category lets you know what kind of entity it is. A country lets you know where it is. So if you can consistently know where something is, what kind of entity it is, who owns it, and that it is truly unique, and leverage those definitions with your business stakeholders, you can manage and scale your relationships across your enterprise.

Imagine how well your data would flow if you knew you only had unique records (codes); that every one of them had a full and updated hierarchy (companies); that you had complete segmentation on everything (categories); and you had consistent geographic location information (countries and markets). This creates a common language between departments about simple but vital elements of your business relationships. Once the data on your relationships is structured and standardized, it can harmonize and integrate better into your processes, methodologies, workflows — between your systems, regions, go-to-markets, and even externally with third parties.  

As you try to get a holistic view of your commercial relationships and anticipate their future needs, no matter what the future brings, applying this fundamental structure to your data will bring you much faster toward that elusive goal.  The future — your future — will depend on how well you can scale your valuable business relationships.