Customer data is one of the most valuable assets of any company, but most companies only analyze 12% of their data. Without proper data collection, organization, and analytics (all of which are part of data management), you won’t be able to get the most out of your data or keep it safe.
Data management is one of the business processes that can shape the evolution of a company in multiple ways. If not done properly, you could end up with useless data that does more harm than good. If you want to understand customer data management and why it’s so important, you’ve come to the right place.
Why Customer Data Management Is Important
Customer data management, or CDM for short, is the process of gathering customer data, organizing, and analyzing it. This process is crucial for companies looking to improve customer visibility, customer acquisition, and increase their revenue.
A reliable customer database can allow for better segmentation of your target market. It helps you discover and predict future trends, as well as create communication strategies for each customer. Overall, CDM can lead to real-time and data-driven decision-making that’s crucial for growth and long-term success.
Simply put, data helps you understand your customers, and there’s nothing more valuable than that.
Customer Data Management Tools
Storing data on spreadsheets may be manageable when you don’t have a lot of it. But as your business grows, so will the pile of data. And the best way to manage all of it is to use customer data management tools.
With efficient software, you can store, track, and understand all customer information that comes your way. Ideally, you should invest in the right tool from the beginning, as storing data on spreadsheets is an old-fashioned and flawed technique.
Some examples of tools you can use for customer data management include:
- 123 Form Builder. You can use this form builder to collect data through advanced e-forms that you can connect to various tools to manage your data and create custom reports.
- Zendesk. Zendesk’s features include reporting and analytics, app integrations, secure cloud solutions, and a sales pipeline builder.
- Hubspot CRM. This CRM comes equipped with automation, forecasting, a deal pipeline, sales analytics, and more.
- Salesforce. With this tool, you’ll have access to sales forecasting, contact management, data management, email integration, reports and dashboards, and more.
- Apptivo CRM. With this CRM, you can automate repetitive tasks, track contact history, have a visual sales pipeline, talk to customers using a custom chatbot, and more.
8 Best Strategies for Collecting Customer Data
Data collection doesn’t have to be difficult if you know the best strategies. Let’s dive into a couple of the best ones.
Data governance helps you identify data you want to collect and keep all your employees on the same page.
A good data governance strategy consists of:
- Alignment, which standardizes the data collection process across your business.
- Validation, during which you’ll be able to confirm that data collection is done correctly.
- Enforcement, a process that ensures that the changes made to data collection go through the proper channels.
Collect only the critical data
Customer data that isn’t relevant to your business can do nothing more but overload your customer data platform.
To make sure all the data you collect is relevant, ask yourself these three questions:
- Why do you need the data?
- What does the data do?
- If you didn’t collect the data, would your operations be affected?
Avoid data silos
If most departments in your company use different tools and don’t share their data, you might end up with data silos. Data needs to be available to all employees across departments so you can have a complete overview of the company and, ultimately, design a better customer experience.
Make data security a priority
If a data breach occurs, most customers tend to lose their trust in the business and turn to safer alternatives. This loss can also cost a lot of money and can bring some heavy fines. That’s why it’s essential to use an excellent data security program that can ensure the safety of your data, no matter the threat that comes your way.
Ensure data accuracy
Two major factors influence your data accuracy: the data collection method and data decay.
The latter occurs when data changes over time, usually over months or even years.
You can avoid data inaccuracy through proper data governance. As for data decay, you can stop it if you clear out data regarding customers you haven’t engaged in a while.
Comply with regulations
One of the most common data protection laws is the EU’s GDPR. And more and more countries will start to pass similar laws regarding data collection and storage. If you work with companies in the EU or your business is based in an EU country, you must comply with the GDPR.
And in case you work as a healthcare provider, don’t forget that you also need to comply with HIPAA standards to ensure the safety of patients’ data.
Provide employee training
Data breaches and mistakes can occur if you haven’t adequately trained your employees in data handling and security. Educate and train your employees so they know the safe way to handle and manage data, and do your best to create a data-driven culture.
No matter how good your data management is, there’s always a chance to lose some of it. It’s wise to have a well-guarded backup if there’s an issue or a data breach, so you don’t lose any sensitive information.
If you want to have an extensive customer database, you need to put a lot of time and effort into customer data management. Learn what type of data is worth collecting, choose the right storage method, and secure it with the best possible solutions.
If you do the entire CDM process perfectly, you’ll have an invaluable process that’ll help you grow your business and keep your customers happy. You’ll create an irreplaceable asset for your business. And when you finally realize how valuable it is, you’ll wonder why you didn’t have it sooner.