Customer data management (CDM) is a crucial element of a successful business, especially when there’s intense market competition, increased customer expectation, and a need for better decision-making processes. What is CDM, and how can it help your business?
CDM is the process of acquiring, storing, and organizing consumer information to personalize interaction to boost conversion rates and establish customer retention. It uses software called customer data platform (CDP) to achieve its goals. However, CDP is often used interchangeably with customer relationship management, even though they have slight differences.
That said, you might want to check out this official source to help you determine the difference between the two. Yet one thing is for sure: both are essential to promote and establish good customer relationships.
Likewise, it’s important to understand how crucial customer data are in a business, and effectively handling these data will provide you with great benefits, such as:
- Improved customer trust
- Improved customer satisfaction
- Increased upsell and cross-sell opportunities
- Improved customer value and loyalty
- Better customer relationships
If you don’t want to miss these benefits, you may consider these helpful tips to ensure effective, efficient, and successful customer data management:
- Establish An Effective Security System
Before anything else, the first thing you need to do is protect your consumer data from cybercrime activities, such as cyber-attacks and threats. According to a 2020 study, a data breach has an average cost of USD$3.86 million globally.
Unfortunately, the most affected in this situation are the small and medium-sized businesses with an average loss of USD$180,000 per data breach. Thus, it’s important to keep your data secured and protected as much as possible. This not only saves you money but also establishes strong customer trust and loyalty.
Here are some tips you might want to consider:
- Use Backup Systems
This is the most effective way to protect your data from other people. Backup data allows you to access your data, even if the primary site is threatened and attacked. It would also be best to invest in a cloud-based storage system for a more robust backup system.
In addition, you might want to consider having regular backups at least every 24 hours to ensure all new data are protected and secured. You sure don’t want even a single piece of information stolen by other people.
- Train Your Staff
If you want to have an effective data security system, ensure that you have well-trained and informed employees. It’s critical to educate them about the importance of data and make sure they know how to deal with security problems.
- Invest On What Is Necessary
Data may be the most vital resource you need, but having too much of it may also be bad for your business. This case is called data saturation, and it can affect your company’s decision-making processes. It may also aid hackers to access your precious data, resulting in costly damage and ruined customer relationships.
Additionally, most customer data are often left unused. With this, you might want to remove all of them from your database. However, even a simple deletion of data requires strategic implementation as every data has its own purpose. Hence, you might want to consult your team and think about these questions:
- Would you need it in the future?
- How does deleting data affect your goals?
- How will the deletion of such data affect your relationship with your customer?
You can also prevent data saturation by gathering only the information you need. For example, you don’t have to collect your customers’ email addresses if their phone numbers are enough. By doing this, you’re helping your business streamline its operation. This results in lower overhead costs and an increase in revenue.
- Have A Backup Data
As previously stated, having a backup is one of the most helpful ways to protect your valuable data, especially when there’s a high risk of losing them. According to experts, more than 50% of businesses are often left unprepared for data breaches and losses. With an effective backup plan, you’ll be able to protect your customers and your company.
Consider these questions when establishing a backup system:
- What is your proposed budget?
- What kind of backup services would you need?
- How will you protect your backups?
- Do you have a recovery plan?
After building a backup plan, make sure to have it tested and troubleshoot any problems. This way, you can prepare your business from possible attacks outside your facility.
- Provide Incentives to Customers
Two out of four people say they are willing to exchange their information and conduct transactions when given incentives, such as personalized offers. With incentives, you’ll be able to access a lot of crucial and helpful data.
You may give them special discounts or gift cheques. You may also try conducting surveys, and every person who participates will have gift cards they can use.
Moreover, this strategy allows you to gather data from different points of view. This will help you expand your knowledge about their journey, such as making purchases or visiting a website.
- Clean Up Inaccurate Data
The data you gathered from your customer will change over time, so they’d be considered outdated. The best way to address inaccurate data is by cleaning up your database.
However, it’s important to update and validate all information before removing it from your database. You may ask your clients to update their valuable details, such as email addresses, phone numbers, and city addresses.
After updating their information, it’s time to remove duplicated details and delete non-existent contacts from your database. Before you do that, here are some things to consider:
- Conduct audits and check the information at hand.
- Centralize all data across various departments.
- Have a consistent format for all data.
Furthermore, cleaning up your database helps you have accurate information to analyze your customers’ behavior.
Final Words
Customer data management is a key aspect in all businesses, no matter how big or small. It gives them insights to improve customer relationships, boost conversion rates, and improve customer retention and loyalty.
However, to have a successful CDM, you might want to consider the essential tips presented in this article, such as securing data, having backups, cleaning outdated data, and using only the crucial data.
With effective CDM, your business will have a competitive advantage over others in the market.
