What Is Customer Data Management?
What is Customer Data Management?
Customer data management, or CDM, is an overarching term for the strategy, tools, processes, and standards that a business uses to manage customer data. Customer data management also includes data acquisition, storage, organization, and use.
The goal of CDM is to turn customer data into detailed and insightful customer profiles that a company’s sales and marketing teams can use to improve their interactions with customers. It enables organizations to better understand customers’ needs. Then, instrument communications that result in higher customer engagement and retention.
Why Customer Data Matters?
So why should you care about customer data management, anyway? Customer data management is a transparent and safe way for organizations to cull together and analyze data. When done right, CDM strategies build trust with their digital customers while providing valuable feedback to organizations.
- Data-driven decision making – One of the main reasons to create a robust CDM strategy is to improve your ability to make data-driven, informed decisions that lead to better decisions and happier customers.
- A safe, transparent customer data management strategy will also build trust with your customers while ensuring you are well in line with regulatory measures surrounding data collection.
- Data generates at an exceedingly quick rate, and having a reliable CDM strategy creates consistency in capturing insights. as well as,maintaining data quality.
Customer data management processes
CDM processes entail 4 important steps that you should be making to collect and make sense of your digital data. Below are the four steps and what you should be doing in each step.
- Data collection – The first step in any CDM process, data collection requires a single database where you can store data from your various channels. Once the data is in place, you can vet your data, discern structured data vs unstructured data, and determine which data is usable and which isn’t.
- Segmentation – Segmenting data is important for culling together data into clusters and making them available to your various departments. Because your marketing, sales, advertisement, and customer service teams have different data needs. It’s important that the relevant data is accessible to the according department.
- Analysis – This is the point where you observe your marketing data and sift out valuable insights that are both inform and actionable.
- Validation – Once all the previous steps are completed, you can validate your data by integrating them into your various departments’ systems. This integration will help your staff and team members in differing departments access the data in real time.
Customer Data Management Best Practices
Data consolidation:
It is important to keep data in the same central location because if data kept and updated in multiple places. It is easy for customer information to become inconsistent. Each customer should only have one record that serves as the single source of truth (SSoT) for all information across all departments and platforms.
Data governance (DG):
Once data has been collected, organizations should document standards for how data will be stored, retrieved and used. This includes monitoring data access permissions and outlining file naming conventions.
Data relevance:
It’s important to only keep customer data that is relevant to business goals. Collecting irrelevant data decreases operational efficiency when putting the data to use and lowers customer experience scores.
Data quality:
Data managed frequently to optimize resources. This includes verifying that all data is valid, has been scrubbed and is up-to-date.
Data security:
Once in place, CDM solutions should be secure. Customer privacy needs to be protected and security best practices should be implemented. Such as data encryption, routine audits and external backups.