Customer data management (CDM) is the process of using customer data to your advantage as a business by collecting the appropriate data, managing that data efficiently, and analyzing the data to determine how to use it effectively.
A good CDM strategy can increase sales, improve customer retention, make marketing campaigns more effective, and strengthen customer relationships.
This article will provide you with an effective CDM strategy made up of 8 best practices from data collection to data security. You’ll learn how to use the data you are collecting, have collected, or plan to collect to your advantage.
It might be time to stop thinking about how to use your current channel of business acquisition (retail, online, email, etc.) to get more leads and start thinking about how to use your current customer-base to improve those existing relationships and create new ones. We’ll show you what you need.
Let’s talk strategy. With technology advancing at such rapid rates, you’d be crazy not to take advantage of the heaps of available data that can lend insight into who your customers are, what they want, what they need, and where you can find more customers just like them.
Channel-centric is out and customer-centric is in. Instead of relying solely on isolated channels to reach customers, a proper data management strategy allows you to use the customers to inform your decisions regarding communication, marketing, and interactions.
Whereas a channel-centric strategy focuses on strengthening one channel at a time to reach an audience, a customer-centric business uses multiple channels simultaneously to reach its audience.
It also helps base marketing decisions on unique data provided by the customer, whether voluntarily or incidentally. We’ll get into the different types of data and various data collection methods a little later.
You are competing with other businesses for providing the best customer experience. So what do customer’s care about?
- Are they able to contact you—through a channel that’s convenient for them—with issues and concerns?
- Do you listen to them and act on their feedback?
- Do you know who they are and personalize their experience?
- Is their experience consistent? (More on this below.)
The process of your target becoming a customer is a journey. It is your task to lead your target through that journey: from lead, to customer, to repeat customer. Doing this effectively will rely on your ability to collect the appropriate data, manage it properly, and use it strategically.
7 Customer Data Management Best Practices for Getting the Most out of Your Customer Data
« Collect Data
You need complete customer data in order to enhance the customer experience.
Here are a few types of data you can collect:
- Transactional data – recorded results of actions (ad clicks, web purchases, email opens, etc.)
- Internet Data – any publically accessible information on the web (blogs, internet search results, social media profiles)
- IoT Data – “internet of things” generated by sensors (laptops, smart watches, cars)
- Personal Data – contact information (phone number, email address, physical address)
And there are many ways to collect data for many different situations. Here are a few examples:
- Top of funnel (lead magnet)
- Info: name and/or email address
- Benefit: it’s easy and low risk which motivates customer participation
- Lead-generation forms
- Info: email address
- Benefit: can be customized based on customer action such as entering the website or spending x-amount of time on the page
- Bottom of funnel (landing page form)
- Info: more in-depth contact information and personalization factors
- Benefit: these customers have already been to the top of your funnel and liked what they experienced; they want more, so they’ll have to exchange more personal data
- Surveys (questionnaires, follow-up contact, feedback forms)
- Info: what current customers like and don’t like about their experience
- Benefit: this info can inform changes to improve the customer experience
This isn’t only for eCommerce companies either. More and more brick and mortar stores are starting to understand this to enhance customer experiences as well as increase sales.
The main takeaway is that there are different data collection methods for various stages of the customer journey. The method you choose depends on what data you want to collect and why.
« Profile Data
Data profiling means assessing the quality of your data. Should you put your data to work immediately or clean it first? When you profile your data, you prevent errors therefore running your data more efficiently.
Data profiling allows you to identify errors in formatting. Structure discovery and content discovery would uncover a 9-digit phone number instead of 10 digits for example. Content discovery data profiling would show errors in content (phone numbers without area code for example), and relationships among datasets.
Relationship profiling can allow you to consolidate data sources and reuse data.
The goal here is efficiency. If you are proactive in identifying errors, you will save yourself a lot of time and headache in the future. Entering unclean data into your system can create errors that are more difficult to fix than just weeding out inconsistencies through profiling.
« Enrich Data
While profiling involves identifying data errors, data enrichment adds data and details. Say, for example, you have collected customer names and email addresses, but now you’d like to have customer phone numbers on file. You can use a data append tool to fill in the blanks.
Data enrichment combines a first-party dataset (the data you’ve already collected) with a third party dataset (the data you haven’t collected but still need) to improve your existing dataset. There are different types of data to focus on during the enrichment process:
- Demographic data (income, marital status, gender, etc.)
- Geographic data (where customers are geographically)
- Personal data (email, address, phone number)
A data append tool helps the enrichment process by gathering email addresses, phone numbers, and other contact information which lets you know where and how you should focus your marketing efforts.
These data types come in handy when planning who to target and how. Facebook, for example, allows you to target ads to specific groups of people and specific geographic regions. If your data profiling process results in recognizing that many of your leads come from the same geographic area or demographic background, that can help your future marketing strategies.
Be sure to target your ads and outreach to those areas and personalize your messaging in a way that resonates with an audience that is likely to respond positively to it. Make sure the data you have is legitimate. This is where data validation comes in.
« Validate Data
Data validation is different from data profiling. When profiling data, you might notice that the data you have is missing pieces—the data is incomplete. Data validation catches fake or inactive phone numbers and email addresses.
Validating your data can save you time and effort by weeding out those fake or old email addresses and phone numbers. Instead of pursuing dead leads, validate your data and focus your efforts on legitimate data. Cleansing your data is another way to make sure you spend your time pursuing profitable leads.
« Cleanse Data
You should cleanse your data regularly because of information changes. People move, they get new email addresses and abandon the old ones which have become saturated with marketing emails and thousands of unread messages.
People also change their phone numbers and they become inactive, especially if they are fed up with their old phone carrier, want a local number after moving, or no longer want to hear from an “ex”.
Numbers that have been recycled and were once on the Do-Not-Call list get reassigned may become eligible for solicitation.
Customer data management is multi-faceted. There’s a lot going on. But the bottom line is this: if you put in the right work early, you save yourself time and time is money (pardon the cliche). If you follow these CDM best practices, you will run more efficiently and effectively.
« Manage Data
So. You’ve gathered your data, identified errors, added missing pieces, verified existing data, and you got rid of outdated/inactive data. What do you do with what’s left?
Now you can build customer profiles and target “look-alike” profiles. This is your opportunity to learn who your customers are, customize and improve their experience, and target leads with an informed purpose.
A good CDM strategy takes customer data and feedback and uses it to enhance the customer experience. We’ve talked a lot about how to make sure you have enough valuable data to target your audience, but how is your customer interaction game?
Are you using the data to
- personalize email campaigns?
- resolve customer complaints?
- add/improve communication channels?
Part of making sure your customers’ experience is consistent depends on how you manage their data.
Popular opinion dictates that data silos are bad. Data silos limit each department of your business to the data that applies to them specifically. For example, your marketing department might not have access to the same data that the sales or accounting departments have. This makes communication difficult and affects the customer’s experience.
Instead, it’s better to create a system that unifies customer data so that when customers need to contact you, they get the same user-friendly experience every time. Consistency is key.
If your processes and procedures are helpful and user-friendly, then the customer gets a good experience regardless of which point they’re at in the customer journey. You want them to keep coming back.
Remember: these 7 best practices have one goal in mind—center on the customer.
That’s why it’s important that you know who your customers are. They want to feel important, understood, listened to. And most importantly, they want to trust you. So you must make sure their information is secure.
« Secure Data
Data breaches are costly. Not only are there legal fees to contend with, but a data breach can be a huge blow to your customers’ trust. So how can you avoid it?
First of all, having complete, extensive data helps prevent fraud. Names and email addresses are easy to get a hold of. But if a fraudster is then prompted for more information–be it address, phone number, or other identifying data—it then becomes more difficult to violate a victim’s account and compromise his or her information.
Here are a few more tips for securing customer data:
- Properly train employees and partners who handle customer data
- Educate users on how to protect their own data
- Limit business to be conducted on approved, secured devices only
- Personally monitor processes, procedures, and compliance
- Secure printing fleet and fax information when possible
- Implement a legitimate identity verification system
- Update passwords and access frequently
- Monitor the lifecycle of your data
- Hash customer passwords
It is also important to backup the data you’ve collected and plan to retain. Backup data in two different locations in case one were to get damaged. Backup regularly and document what data is backed up, who completed it, and when. Make sure you always have access to the data and secure it with a username and password. These should be changed frequently to increase security.
What to do now …
In conclusion, a strong customer data management strategy can be quite profitable. With a CDM, you are able to enhance your customers’ experience to keep them coming back, and you are able to target better leads. However, it is your responsibility to secure the data you acquire and communicate with your customers how you plan to do so.
There are tools you can use to save time and prevent errors when gathering and handling data. The result is a customer-centered strategy that provides value to both yourself and your customers. Collect data, get to know your audience, and protect them. This will keep them coming back.