What is Customer Data Management & How to Perfect It?

Source: forbes.com

We live in a world, where people buy and sell goods and services daily. Thus, the business segment is very extended nowadays, which raises the competition level. In this regard, proper marketing and interaction with clients come as significant tools for successful business running.

When considering the most effective tools for business workflows, customer data management (CDM) comes as a strategic weapon for stable long-term development. CRM is a set of utilities, tools, and strategies that help maintain continuous interaction with clients, realize their demands, and adjust marketing campaigns to increase sales and achieve high revenues.

The importance of data accuracy is vital for businesses since irrelevant information reduces the level of consumer satisfaction with a brand, affecting their loyalty. As a result, businesses that do not process accurate information lose competition due to inadequate offers on the market. Timely study and processing of consumer data helps adjust marketing strategies, develop the most effective means of interaction with consumers, and make targeted offers.

Understanding Customer Data

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Customer data encompasses a wide array of information. In trying the simplify its processing and filtration, advertisers and marketers agreed to classify data into several classes, namely:

  1. First-party information includes all types of data received directly from consumers. It can be personal data (name, email), address, phone number, etc. This type of information is strategic for personalizing marketing campaigns and developing tailored content for different categories of customers.
  2. Second-party data ─ This type of information is obtained by buying consumer insights from other companies or service providers that collect this data through their activities. For instance, a business buys location-tracking metrics collected by the owner of a geo app. This information is analyzed and processed to create tailored offers for consumers living in a particular geo region. Businesses buy client databases to fill in gaps or supplement first-party information.
  3. Third-party data ─ To obtain this kind of information, businesses turn to outside providers. Independent sources sell anonymous consumer information. This data is usually used for assessing and analyzing a customer audience and identifying possible prospects for businesses. However, it’s quite complicated to reach such consumers and create bounds for further communication with them due to low loyalty and poor brand recognition.
  4. Zero-party information ─ This data is obtained via voluntary disclosure from existing consumers. This group of clients is valuable since customers have high loyalty, and brands perfectly realize their demands and needs and can make targeted offers. Obtaining this kind of data helps achieve a better understanding of consumers and expand a target audience.

A comprehensible analysis of all these groups allows for creating a full-scale picture of the target audience and achieving effective customer database management.

Effective Customer Data Management

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CDM is a complicated time-consuming process that requires thorough attention and analysis. The success of a marketing strategy and an entire business highly depends on the correctly performed analysis of consumer information. Thus, comprehensive customer data management consists of the following principles.

Data Governance Strategy

It is the first and most effective principle of CRM and workflow management since it establishes the way how information will be gathered, and where it will be stored and processed. In other words, this approach regulates all sides of processing data, establishing guidelines for information collection, validation, and usage. It comprises three main stages:

  • alignment that standardizes the process of consumer datum collection within the company;
  • validation that confirms the proper collection of information;
  • enforcement that ensures that all subsequent changes to this datum will be properly processed and documented.

The result of this phase will be the creation of a tracking plan, where all stages of data collection and processing will be written down.

Critical Data Focus

This phase implies the ability to filter information and sort out useless data, concentrating on data that has strategic value for the business. Here, employees should manage to filter information, focusing on necessary data. Answering the following questions helps cope with this step successfully:

  • What benefit does the company get from this data?
  • If this information is missed, will the business still perform effectively?
  • Who benefits from this data?

These answers will help identify strategic information without dispersing efforts on unnecessary data and build the collecting phase effectively.

Avoidance of Data Silos

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Data silos are called the process when different departments of the company collect consumer data independently from each other without sharing the obtained information. This strategy results in getting the same information, meaning that employees lose time collecting the data available in a neighboring department. This approach inevitably leads to an inefficient workflow and the loss of effort.

Thus, datum collaboration and exchange come as essential elements of developing an effective workflow where all employees and departments contribute to achieving the common goal. High integration between employees helps simplify the workflow and increase its efficiency.

Data Security

Security of the data is an essential aspect since it comes as a strategic tool, and intruders or competitors may want to get it. Thus, make sure that customer data is reliably protected against unauthorized access and breaches. Use certified utilities and platforms that comply with the ISO 27001 data security program. SugarAnt CRM database is also protected by strict role-based access control rules and two-factor authentication.

Data Accuracy and Quality

Information tends to retire over time. Thus, it’s important not only to collect and store but also to keep data updated. Implementing processes to maintain the integrity and accuracy of information is a vital step for businesses to achieve customer satisfaction.

Regulatory Compliance

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Make sure that you do not breach any data-related laws and regulations during information collection. Adhere to data privacy laws and regulations to prevent consumer rights infringement.

Implementing a Customer Data Management Strategy

Now, let’s make a brief guide on how to implement CRM and database management most effectively. Below, we list the best practices for business workflows:

  1. Develop a strategy. It is a large preparatory step since it implies the need to define a circle of engaged employees, sources of data collection, place of storage, etc.
  2. Train the enrolled employees. Once the circle of engaged staff is determined, arrange training for them to learn how to collect and process it and master new skills.
  3. Identify a consumer profile to seek specific strategic information and perform effective analytics.
  4. Implement modern technologies and high-tech IT solutions to automate the process and simplify efforts.
  5. Adjust customer profiles to achieve higher personalization and deliver satisfactory experiences to consumers.

The Future of Customer Data Management

Since CRM data management is an essential business tool, its popularity will continue to expand in the sphere, evolving due to the integration of modern digital technologies. Nowadays, great attention is paid to AI and machine learning. Thus, the integration of these technologies into CDM processing is expected shortly. The introduction of advanced CDM utilities based on AI and machine learning will help speed up and simplify the workflow, while employees will be able to concentrate on more significant tasks. Such improvements will renovate the business organization and provide companies with more effective tools.

CDM is a strategic tool for business running, which allows for perfecting the workflow and making targeted decisions based on accurate consumer data. The analysis of such data helps develop tailored marketing campaigns, ensure smooth communication with the target audience, and increase consumer loyalty. After all, CDM contributes to enhancing customer experiences and driving business growth.