Customer data is vital to any business’s survival. This data helps you to learn about your customers, their motivations, and how you can retain them. Customer data management is required to put all this together and make it valuable.
You have a better chance of using customer data to your advantage if you are able to easily store, organize, manage, and access customer data in a customer management system. Learn how to increase sales, create better experiences, reach more customers and earn referrals.
Let’s look at the basics of customer data management, and what best practices are for using customer data and technology to support your data analysis strategy.
What Is Customer Data Management?
Customer data management (CDM), is an intentional, collective approach to managing customer information. This encompasses the strategy, tools, and technologies that enable data management.
CDM’s overarching goal is to transform customer information into actionable, useful insights. These insights will be used by sales and marketing teams to improve customer conversations and promote the company’s products, services, and products.
Using customer data allows brands to transform themselves into customer-centric organizations that provide what their customers and prospects want and need.
Also read: Top 10 Client Management Software
What are the Benefits of Customer Data Management?
Companies looking to expand their customer base and make customer data management a priority for new businesses can do so by making it a priority. The CDM process allows organizations to identify their target audience and find more ways to interact with customers. Customer database software is a great way to stay organized. We’ll get into that later.
Creating Stronger Customer Connections
It is not easy to acquire new customers. It may take several impressions before a customer notices you. It can be five times more expensive to market to a new customer than to an existing one.
You can win more and lose less with customer data. All you need to know is how to connect at each touchpoint of the customer journey. Your data can be used to identify common denominators among customers. This includes how they were acquired, what offers they received, how much they spend, and many other factors. To reach more customers, create lookalike audiences.
Customer data can be used to improve your marketing and advertising. Instead of spending time and money on marketing campaigns, you can make your campaigns more meaningful by connecting with your audience.
Enhancing Total Customer Lifetime Values
The Pareto Principle states that about 80% of your results come from 20% of your causes. This means that 20% of your sales come from your customers, which is approximately 80%.
When you have a repeatable, predictable process for doing so, it’s much easier to calculate key metrics such as customer lifetime value.
A customer data platform will help you identify the top 20% of customers so that you can better nurture them. You might consider including them in a special customer loyalty program, which offers discounts, incentives, and other rewards for being a customer.
Making Better Business Decisions
It’s clear that real-time, reliable data can help you make informed decisions. It eliminates all guesswork regarding who your customers really are, how engaged they have, and other details that could help you find the best way to reach them.
Content creation and advertising will have a greater impact. Your outreach will be more effective and planned. Your conversion rates will be likely to increase.
Centralizing Your Customer Management
Companies that keep all their customer records in one location can reduce the number of data silos that slow down progress. With consistent, accurate data, you can create a holistic view of your customers. You can avoid the danger of having duplicate or insufficient data that paints an inaccurate picture of your customers.
Customer management systems make it simple to store all customer information in one place. The same data can be accessed by all team members and they can work together towards common goals, rather than worrying about missing one piece.
Also read: 8 Best Customer Service Tools for 2022
Improving Data Quality
Companies are under greater pressure to maintain high-quality data by having a dedicated customer service process. Customers data must be trusted by teams that regularly access, view, and make use of it. Companies should establish solid best practices to collect, store, organize, and access data.
Is Customer Data Management the same as Master Data Management?
There are some similarities between masterdata management (MDM) and customer data management (CDM ). However, they are not interchangeable.
Master Data Management is focused on creating a single point of truth for all company data. It covers all aspects of an enterprise including customers, employees, and vendors as well as products and in-store transactions. Support tickets and analytics are also included. This central source allows sharing of information across the enterprise.
This is why CDM could be considered a piece of the larger MDM pie. You might also consider CDM “customer masterdata management.”
Customer data management is focused on customer data. This includes names, phone numbers, and addresses as well as purchase history. As your company grows, managing customer data can become more complicated. Customers might move, change their email addresses, switch companies, or get new numbers. Customers might buy less of one product or more of another.
Inaccurate customer information can result from having multiple systems that store customer data. Better management will give you better visibility so that you can make better decisions.
How to Choose a Customer Data Platform
The right customer database software makes it easier to implement a data management strategy. This might be cloud-based Customer Relationship Management software or CRM software.
CRMs are designed for customer engagement. CRMs provide turnkey solutions for customer engagement. They can also assist you in navigating the world of sales and marketing automation. Many CRMs can be integrated with popular marketing tools via APIs. This will make your new system more valuable immediately.
A customer data platform (CDP) is often a better option because it was specifically designed for the cause.
A CDP is a central hub for all data sources. To get a better picture of each customer, you can link data to customer profiles. Each customer will be linked automatically as new data becomes available.
CDPs can use first-party and third-party data. These include real-time analytics, segmentation, data syndication and synchronization, identity resolution, and data processing.
Let’s not forget about the features. We will now discuss how to choose a customer database program that supports your sales, marketing, and market research.
Integration With Your Existing Tech Stack
CDPs (and CRMs for that matter) can’t be used as standalone tools. They should be integrated with other solutions to enhance your sales and marketing.
All systems that collect customer data should be unified by your data platforms. This is crucial in breaking down information silos. CDPs must be able to access customer information wherever they are. This includes mobile apps, ERPs, and CRMs as well as websites and other marketing tools.
Ability to Capture Data that Matters
CDPs can collect a variety of customer data. To avoid data overload, you need to be careful about what information you store. Your CDP should capture only information that can have a positive impact on your sales and marketing strategies.
- This data is needed by whom (e.g. sales teams, customer service, marketing, etc. )?
- What is the significance of this data?
- Would we be able to make the same decisions without this data?
Even though all CDPs have the same purpose, not all CDPs are equal. To create more customer profiles, consider your specific use cases and other tools.
Scalability for Future Growth
A “CDP” may have been an Excel spreadsheet at the beginning of your company. Although it may have been useful for a while, it is not meant to guide you through the more serious stages of your company’s growth.
CDPs should help you get to scale. CDPs should be able to accommodate growing customer bases and customizable fields as your business add new products, service, or marketing channels.
Best practices for customer data management
Organizations will reap the benefits of best practices in how they collect and enrich, cleanse, and use customer data, regardless of which data platform they choose.
A Data Governance Strategy
Data Management helps you not only determine what data you need but also how to organize it. It allows you to think critically about the data you have and what you want from it.
Three key components of data governance are alignment, validation, and enforcement. Alignment is the process of standardizing customer data throughout an enterprise. Validation is the process of verifying that the data has been properly formatted and collected. Enforcement ensures alignment and validation are maintained and data collection and use go through the appropriate channels.
A data governance strategy is a guideline that you can refer to when creating, updating, or modifying your data systems. It helps everyone stay on the same page regarding your plans for customer information.
Prioritize Data Security
A single data breach can cost you a lot of money up to $8.64 Million per occurrence Companies must ensure that they are doing all they can to protect customer data, both internally and externally.
It means using the best security practices to prevent hacks and other breaches. This also includes restricting customer data’s internal access and using user-based privileges, among other security measures.
Invest in Team Training
Your entire team must be on board for a customer data strategy to work. You need to make sure that the right people are able to use your CDP platform to access customer data and how to properly manage it. A formal training program should include input from IT, Legal, Marketing, Sales, and Legal. Improve customer experience at scale by unifying customer data.