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“Data are just summaries of thousands of stories—tell a few of those stories to help make the data meaningful.” ~ Dan Health
Data management is one of the many facets of customer service that affect a customer’s overall perception of your brand. As the wise words of Dan Health suggest, data isn’t just cold numbers; it’s a collection of tales that can transform the way you understand and connect with your customers, from the point of acquisition to the point of retention and beyond.
The integrity of consumer data hinges on accuracy, timeliness, relevance, completeness, and consistency. These keys help boost sales and conversions, improve customer experience, and ensure customers stick around. That’s why monitoring and fine-tuning how you manage your data should be your top priority.
Unfortunately, many corporate entities struggle with this requirement. Studies show that 54% of businesses find maintaining data quality and completeness to be their biggest challenge in marketing data management. If yours is in the same boat, don’t panic. You can take a few measures to manage customer data more effectively. But before we get to that, let’s understand the basics.
What is Customer Data Management (CDM)?
Customer data management (CDM) refers to a set of processes, practices, and technologies involved in collecting, consolidating, managing, and analyzing customer data. It’s an intricate part of customer relationship management (CRM), which refers to the strategy and tactics a company uses to build and maintain profitable customer relationships.
CDM is achieved by collecting and analyzing data from multiple sources, including transactions, social media, and market research. It encapsulates:
- Customer data platform
- Personally identifiable information
- Non-personally identifiable information
- Identity resolution
- Identity graph
- Cross-device identity
- Customer journey mapping
Each of these components is intertwined with the other, and you can’t build a robust data management system without them all.
The Benefits of CDM for Businesses
CDM is a valuable investment that unlocks a wide variety of benefits for businesses, including:
Improved Customer Insight and Marketing
A fully optimized data management system helps you gain deeper insights into your customers’ preferences, needs, and goals. You can spot emerging trends in the market and identify ways to leverage them for growth. This analytical resource also comes in handy in helping you refine and scale your marketing, sales, and support operations, thus creating a more personalized campaign and customer experience.
For instance, data can tell you if a customer has already purchased a specific product, what time of the day they’re most active online, and what type of content they’re more likely to engage with. This allows you to tailor your offers to their specific interests.
Enhanced Customer Experience and Retention
A recent report suggests that 86% of customers are likely to abandon a brand following two poor experiences. With efficient data management, you can reduce the likelihood of that happening by delivering consistent quality service to your customers, across every touchpoint. Whenever there’s an issue, you can identify and resolve it faster by delivering more personalized support, which will create a memorable experience for the affected customer and increase brand loyalty.
Better Data Governance
Poor data governance can be a problem for your business in many ways, such as creating inconsistency (from data duplication to inaccurate data), security concerns, waste, compliance issues, and customer displeasure. An efficient CDM helps you avoid such issues through best practices. This, in turn, lets you optimize your business operations and boost your chances of sustained growth.
Improving your customer data management leads to lower costs of managing the data, better compliance and quality, and the ability to use the data in more powerful ways, all of which add up to increased return on investment (ROI).
How to Improve Consumer Data Management
CDM isn’t a one-time event. Rather, it’s an ongoing process that requires you to implement effective strategies to improve data management. That said, here are three ways to get started:
Protect Your Data
Every reputable company’s nightmare is an unauthorized data breach that impacts its brand image, operations, and profits. LinkedIn’s 2021 breach is an excellent case in point, as it affected 700 million users, whose data were posted on the dark web—the second leak in the company’s history.
While there’s no sure to know its financial implications on the social media giant, we can infer from other cases that it’s costly for companies to manage such incidents. So, it’s crucial to invest in the right tools and systems to secure users’ data. Here’s what needs to be done:
- Encrypt customer data during transmission and storage to enhance security.
- Limit access to customer data to authorized personnel only.
- Conduct regular audits to track who accesses customer data and why. In addition, identify and address any unusual activity promptly.
- Train staff on data protection, recognizing phishing attempts, and following security protocols to strengthen the human aspect of data security. If this option isn’t in the cards, simply hire tech specialists on Leadar, a B2B database that simplifies the process of vetting, testing, and onboarding top-tier experts.
Centralize Data Storage
The data collected by different businesses comes from various sources, such as emails, web analytics, CRM, websites, customer service logs, mobile apps, social media, and many more. This makes data storage and retrieval tricky, not to mention complicated. So, you need to bring together your data sources, clean them, and centralize them in a single location, such as a customer data platform (CDP), for easy retrieval and analysis.
The centralized location, as well as having an overall view of your data, is essential to making sure that all customer interactions remain consistent, even if you have thousands of employees providing customer support. This, in turn, improves the overall customer experience, as noted above.
Understand and Comply with Data Laws
Customers are getting more conscious about their data privacy than ever before. In fact, many companies have been forced to adapt their data practices to new legislation or risk incurring heavy penalties. Case in point: the implementation of GDPR, a regulation that protects European customers’ data and gives them greater control over the use of their data by organizations.
If you’re just starting out with your CDM process, it’s essential to understand all the data privacy laws that might impact your business, including GDPR, HIPAA, CCPA, and CPRA. The process may sound challenging, but it’s easier when you take into account what’s at stake.
For instance, the potential fines that companies can incur under the GDPR, if they fail to meet the legal requirements, are considerable. To avoid these penalties, you need to comply with the laws by keeping accurate and updated records for data processing, conducting regular internal audits, and ensuring authorized personnel also understand the legal requirements.
Data management is a critical part of your customer experience strategy. The more informed you are about your customers, the better you can create, implement, and scale your marketing, sales, and support operations. However, this is feasible only if you employ efficient measures to manage your data, as discussed in the tips above. Keep them in mind as you build your CDM system and you’ll have an ever-improving customer experience and brand loyalty.