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Customer data management best practices have never been more crucial to today’s brands, which face rising competition, increased customer expectations, data breaches, and a growing need for improved decision-making.
With higher volumes of complex, diverse digital interactions than ever, the sheer scale of data sources and customer data has expanded significantly. So has the need to move, store and analyze party data, so companies can target customers more effectively.
What exactly is customer data management?
Customer data management (CDM) is the operation of gathering, securing, organizing, and employing consumer data in order to customize interactions to grow conversions and establish loyalty. CDM also provides a framework for data governance—facilitating the practice of ethical data acquisition and proactive security of customer data. As time goes on, CDM will become more transparent, consumer-facing, even, as data protection continues to be a focus from the boardroom to the bus stop.
The complication of data breaches, such as the recently reported 500 million LinkedIn profiles involved in a hack, create a heightened demand for corporate accountability related to data security.
For many businesses, manual data-gathering efforts using Excel spreadsheets can work—up to a point. As the company grows, however, so does the data and the need to make sense of it. This can quickly become unwieldy and unhelpful: Organizations can easily get lost and overwhelmed in large data sets and lose out on potentially valuable insights that help them stand out to their customers and improve the customer journey.
That’s when it’s time for a big change—through customer data management strategies and solutions.
Winding path-to-purchase requires deep customer understanding
Unlike past decades, when channels were separate and siloed, today’s path-to-purchase is a long and winding road. Multiple touchpoints, both online and off, need to stay connected— including email, CRM, e-commerce, social media, and retail POS.
The customer journey may include several devices and applications, as well as demands for 24/7 communication and personalization. For example, the vast majority of customers say they find personalization appealing or that they are more likely to do business with brands that provide personalized experiences.
That means it is essential for organizations to deeply understand the customer at every stage. Customer loyalty will soon depend on a company’s willingness to protect customer information with the same fervor the pursue revenue.
Making sense of the data allows customers to be valued more
A range of cloud-based solutions are now commonly used for customer data management that serves as the centralized, beating heart of the effort to improve customer acquisition, satisfaction, and retention; improve customer visibility and targeted communication, and boost data quality.
While solutions such as a CRM may overlap, customer data management platforms go well beyond sales: They include a unified database that can be accessed by other marketing technology systems and integrate behavioral, transactional, structured, and unstructured data from multiple sources into a single repository that allows for customer profiles that provide a holistic, 360-degree view of customers.
Ultimately, businesses need customer data management to work towards achieving a single customer view that allows them to provide the seamless customer experience that consumers have come to expect, as well as calculate important metrics such as the Customer Lifetime Value (CLV).
However, it’s not just about the technology: It’s about the strategies, policies, and actions that make customer data management an effective effort that helps drive growth.
Customer data management best practices: 7 important tips brands should consider
Let’s list the 7 tips, then dive deeper into each to best add perspective for your customer data management best practices now and in the future:
- Understand the current and upcoming customer data regulations and laws.
- Make sure you’re gathering the right data.
- Make data security a top priority.
- Have procedures in place to continually verify and update customer data.
- You need buy-in from across the organization to break silos and unify data.
- Customer profiles should be holistic and end-to-end.
- Customer identity should be managed through the purchase lifecycle.
Focus on data governance strategy that complies with customer data regulations.
Data needs to be managed with internal standards and policies, to ensure that the organization handles data assets properly throughout the data lifecycle. Make sure the entire company is aligned, across the board, in terms of what data is collected, data points, and how it will be tracked and used.
Data protection regulations, such as the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are on the rise. The right customer data management platform should make compliance with customer data regulations easy and straightforward.
Collect the right data.
It’s important to determine what specific types of data are most effective to serve your customers and achieve your marketing goals. There are a variety of data categories and industry-specific data to consider, from your customer’s identity data, loyalty program information, and online transactional data to demographic information, social media data, and qualitative data about attitudes and opinions.
Get serious about data security.
Not only are data leaks and breaches becoming more costly every year—the average cost of a data breach in 2020 was $3.86 million—but these events can also severely impact a company’s reputation, as well as its bottom line. If you aren’t steering the security ship and communicating your commitment, you run the risk of falling into consumer doubt. After all, customers want to know their information is safe. It’s essential to choose a customer data management platform that has the right security standards and practices in place.
Make sure to clean customer data.
According to an IBM report, 83% of companies suffer from data inaccuracy. Not only is outdated, inaccurate data not useful, but customer satisfaction and decision-making may suffer and lead to rising costs. The key to good customer data management is making sure customer data is regularly cleaned: That is, validating and updating information including email addresses, phone numbers, and addresses, as well as removing duplicates and deleting unnecessary contacts.
Banish silos and unify data.
Forbes recently noted that companies now house an average of 15 silos of customer data. It doesn’t have to be that way: Don’t allow useful data such as call-center information, sales leads, emails, or finance communication to become useless, trapped in department and technology silos. silos. Data needs to be shared and accessible, though securely, in ways that promote collaboration, problem-solving and improved decision-making.
Build holistic customer profiles.
A complete, omnichannel customer journey includes customer profiles filled out with profile, activity, event, demographic and behavioral data, as well as data related to intent and perception. Getting to that goal requires robust end-to-end customer data management solutions that are highly scalable and can store billions of profile and consent records.
Manage customer identity through the purchase lifecycle.
It’s not enough to have customer data or even a holistic profile. Identity data must be collected and managed appropriately throughout the entire customer lifecycle. That means providing a frictionless customer experience with flexible registration, secure interaction touchpoints, and simplified authentication based on real-time, data-driven insights..
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The future of customer data is bright—and unified
Today’s buyers are in control. With a quick click or swipe, they can abandon a brand and make a quick move to the competition, or they can remain long-term loyalists.
That means customers —their wants, their needs, their preferences, their expectations—need to be at the heart of every business. Companies have to understand how to gather and analyze the right data in order to collect insights that help them deliver meaningful, seamless experiences to their buyers. Customer data platforms (CDP) can contribute significantly to efforts centered on customer data management.
This is the promise and power of customer data management best practices: With the right platform that integrates with a company’s existing sales and marketing technologies, customer data management helps brands deeply understand their customers through a holistic, unified, centralized, real-time view of data.
But organizations also need to follow best practices and prioritize successful strategies in order to make customer data management a soaring success.
Effective data management is a promise to customers and an investment in your future. The first step is deciding to take control. You can do that today.