Have you ever mentioned a pair of jeans or shoes to a friend, and then you are bombarded with advertisements for that product the next day? Everyone has been there! You may be wondering if technology is listening to you. However, this is not the case. So, how do businesses nail it? Here’s where customer data management comes in. It is the trail we leave in Google searches, email threads, and shopping carts, and businesses collect and analyze all of this data to deliver the right product to the right customer.
Customer data management is critical in developing innovative marketing strategies, targeting relevant customers, and much more. Customers have thousands of options when purchasing a product or selecting a service in today’s competitive digital world. Organizations should start investing in robust data management solutions to stay competitive and provide a hyper-personalized experience. Here are some of the best customer data management practices to help you attract and retain more customers in 2023.
Is customer data management only about managing data?
Customer data management (CDM) is a critical component of modern businesses, as it enables organizations to understand their customers better and improve their overall experience. While many companies think of CDM solely as managing customer data, it’s more than that. It is also about using data from different sources to derive insights on increasing customer satisfaction, improving customer lifetime value, and delivering a personalized experience across channels.
The main challenge in implementing a CDM in an organization is the vast volume of different types of data, data silos, and the absence of collaboration across different teams. In 2023, a solid data management solution can help you overcome these challenges and make your job easier. Consider a custom-fit clothing store. During the ordering process, the retailer gathers detailed measurements and preferences from each customer. Suppose the retailer manages and analyzes these data efficiently using an AI-powered data management solution. In that case, the insights derived from the data can be used to offer clothing recommendations, identify trends in customer preferences, make informed decisions about product development and inventory management, and improve the customer experience.
Customer data management and real-time insights
Assume you’ve invested millions of dollars in a CDM solution and have an accurate custom analysis report. But will it yield productive results if you apply those insights and make plans after a month or a year? No! Customers’ preferences constantly change in this fast-paced world, and they rely on their devices for information and decision-making. These “micro-moments” can happen anytime and provide valuable opportunities for businesses to engage with customers.
Businesses must explicitly understand the customers in real-time to impress them. 51% of people have purchased something they did not intend to buy because the information provided by the brand was relevant and timely. Businesses should take advantage of the micro-moment by providing customers with targeted recommendations and product information in real-time. A powerful CDM solution can assist you in analyzing your customer and providing the best experience possible.
5 best practices for efficient customer data management
For businesses to succeed, customer data management must be viewed as a strategic solution for all business activities, from increasing revenue and improving customer traffic to accelerating digital transformation.
Let’s look at the top five practices for effective customer data management in your company.
Define the scope and purpose of the data
We’ve all heard that data is the new oil and determines business success. True, but businesses must ensure that they are collecting relevant data. Every customer touchpoint generates data across multiple channels in this data-driven world. According to Forbes, the volume of data is expected to increase by 61% by 2025. As a result, even the most organized businesses can become overwhelmed by the massive amount of data available and miss out on the critical analysis.
Defining the scope and purpose of data collection allows businesses to ensure that they are collecting the right data for their specific needs and that the data is used ethically and responsibly. To define the scope and purpose of customer data collection, you must first determine why you need the data, what you intend to do with it, and whether it will impact your business strategies. Spending money and resources on data collection is pointless if you discover that the data will not help you make an impact on the existing business model.
Segment customer data
Segmenting and organizing customer data into different categories, such as demographics, purchase history, and behavior, allows you to learn more about your customers and provide a more personalized customer experience. Personalization increases a company’s average growth rate by 6-10%. Personalization has become an essential component of the customer journey.
Every customer expects to be treated uniquely with tailor-made services, and customer data segmentation can help you to do that. Industry leaders blend segmentation and personalization to target the customer with customized advertisements. They first create customer segments with similar interests and then adapt the hyper-personalization process. Overall, segmenting and targeting the right customers can help you increase traffic and brand value.
Centralize data storage
Will the customer be patient enough to wait until your employee juggles different data sources to find historical data to address the customer’s problem? Not. Customers expect personalized, seamless interactions with brands in today’s fast-paced business environment, and businesses must rise to the challenge to meet these expectations.
Integrating customer data from various sources, such as your website, email, and social media, can aid in the creation of a complete picture of your customers. For example, data warehouses and data lakes allow businesses to store, manage, and analyze customer data in a single location.
Assure high data quality
More than having access to a massive volume of customer data, it is essential to access high-quality information. Trusted customer data can help organizations understand the type of customer they are dealing with, the kind of products, or the promotional activities the customers like. According to Forbes, more than half of businesses are not ready to trust their customer data present in the organization.
Poor quality data can have a substantial impact on your profit margin as well as your brand image. Outdated customer data can cost you dollars, whereas wrong information could cost your customers’ trust. So, Periodic validation and data enrichment is mandatory to make trusted business decisions and decrease customer churn.
Ensure compliance and privacy
Customers are willing to share personal information in exchange for a more personalized experience; however, it is the organization’s responsibility to ensure that customer data is protected from unauthorized access and misuse and that customer information is only collected and used for legitimate business purposes.
Compliance may appear complicated, but data breaches directly impact brand image and customer trust. As a result, organizations must voluntarily identify and adhere to privacy policies to maintain customer trust and gain a competitive advantage in the marketplace.
Customers are the key to your business’s success. From startups to multinational corporations, it is critical to managing customer data seamlessly to outwit competitors and provide personalized customer experiences. At Xtract.io, we provide simple yet powerful data management solutions to help you make an impact in your business.