Customer data management — definition, benefits, and best practices
Your business collects and processes a lot of customer data — but now you have to decide what to do with it all. The most successful companies leverage that information to increase conversions and boost customer retention.
Whether it’s via your website, social media, or email campaigns, customers generate data every time they interact with your brand. Customer data helps marketing teams provide personalized messaging and targeted campaigns. That’s great, but data is known for having a mind of its own. Customer data platforms help companies gather, organize, and analyze their customer data, but you still need a solid customer data management strategy that backs up everything you do.
In this article, we’ll offer a refresher on what customer data management is, its benefits, and strategies for harnessing that data for organizational success. Specifically, you’ll learn:
Before we dive into the benefits and core principles, let’s establish what we mean by “customer data management.”
What is customer data management?
Customer data management (CDM) is the approach businesses take to manage their customer data. It encompasses how you acquire customer data, how you store it, how you organize it, and how you use it. With customer data management, businesses gather information from dozens of sources and meld it into one unified view of who exactly your customers really are.
While data collection and organization used to be enough, CDM now needs to include data privacy and compliance as well. It should ensure that you’re not only following regulations but also living up to customer expectations for privacy — which are usually higher than the standard set by the government.
The goal of CDM is to take customer data and transform it into helpful customer profiles. From there, your sales and marketing teams can use the data to improve their work. This helps you anticipate customer needs and better solve their pain points — leading to increased conversions and revenue over time.
Customer data management is no walk in the park, though. It requires sifting through mountains of data, which is why a customer data platform (CDP) is a near-mandatory prerequisite for any business that wants to better manage its data.
Benefits of customer data management
Some organizations get by with a Wild West approach to customer data management and do just fine. The thing is, successful businesses manage their customer data — instead of letting their data manage them. The benefits of customer data management include:
- All of your data in one place. Don’t store your precious customer data across your CRM, ESP, or social media. Customer data management pulls information from different sources into one easily searchable database. If you’re sick of your teams not realizing they have a swath of customer data available at their fingertips, CDM is a must.
- Better compliance. With customer data management, you get eyes on the types of data you store, where it’s stored, and how you use it. That’s exactly what regulations like GDPR and CCPA require of you, so customer data management can help you stay abreast of data privacy requirements. Instead of scrambling when the government hands down new data privacy regulations, you can sleep easy knowing you designed your data for compliance from the start.
- Increased personalization. If you’ve been writing generic landing pages or creating one website experience for all your customers, you’re likely seeing declining conversion rates. Fortunately, data makes it possible to personalize the customer experience. CDM pulls disparate data together into helpful customer profiles that you can actually use to improve your sales and marketing — and keep more customers around.
- More first-party data. It can feel like a scary time to be in marketing. Customer data giants like Apple and Google are largely doing away with third-party data sources. This means you need to ask customers for their data directly and establish a one-on-one relationship with them. First-party data is definitely higher quality — and if you want to stay compliant, it’s a pivot you’ll need to make. The good news is that CDM will help you get more value out of first-party data so you can do more with fewer data points.
- Higher quality data. You’re gathering data, but how helpful is it really? Customer data management looks at how much data you store and its usefulness. If you don’t need to know how many kids your customers have, ditch that metric and track a more meaningful data point.
Customer data management best practices
Like fast fashion and technology, trends come and go in the world of data. Follow these five best practices to get more value out of data.
1. Develop a strategy
While collecting customer data is great, you can’t just flip on the switch. Otherwise, you risk overwhelming your team.
Don’t gather customer data without a strategy first. Be intentional about the process. Make a strategy for how you’ll govern this data, which should include:
- Standardizing data collection. Every department and team needs to collect data in the same way. This will keep your data clean and reduce confusion across different departments.
- Conducting quality control. You collected data, but is it any good? Your CDM strategy should validate customer data before adding it to your CDP. For example, if you collect email addresses, you can ping them to ensure the email addresses are real.
- Reconsidering your practices. Data should serve your goals, so don’t be afraid to mold it into whatever shape you need. Your CDM strategy won’t be perfect during your first iteration. Ask your team to ensure efficiency, security, compliance, and quality as you go. You’ll likely find efficiencies along the way, so make sure to rethink your strategy as needed.
2. Get specific
Once you define an overall strategy, you need to specify which data you’ll collect and how. Not all data is good data, so you have to define what you’re collecting and why.
- Did you collect this data properly? Is it factually correct? Did you source it ethically and legally?
- Which team or department uses this data?
- How do you apply this data in your business?
In some circumstances, the data points you store on customers can actually become a liability, so only collect the data you truly need to do your job. For example, if you don’t need to know someone’s job title, there’s no point in collecting that data.
Customer data management allows businesses to collect, organize, and use customer data for personalized campaigns that increase engagement and drive revenue.
3. Unsilo data
Sales and marketing might use customer data the most, but they certainly aren’t the only departments that benefit from it. You don’t want to collect a ton of data that your marketing team uses, but your IT and customer service team don’t have access to.
If you’re leaning into CDM, make it a point to unsilo your data. This means you should integrate your data into all the systems your teams rely on to do their jobs. By integrating your data from different channels, your entire company will have access to the collected data — and they can all stay on the same page.
Every customer-oriented department needs access to this data. That might mean IT’s ticket system needs to mesh with your customer data platform or that your customer data should feed into your accounting software. You’ll be amazed at the efficiencies you find when you equip everyone with information, so don’t limit customer data to a single department.
4. Maintain security and compliance
When you start doing CDM, you have to design the entire system with data governance in the foreground. This means you need controls in place to keep your data securely within the company, in a way that follows all relevant data regulations.
We all know how devastating a data breach can be for a company and the individuals it affects. You don’t need bad PR or a loss of consumer trust, so make sure you have systems in place to keep customer data both secure and compliant.
Best practices like encryption, zero trust, and least privilege are a must for data security. For compliance, work with your legal team to ensure your data platform setup complies with the law. You can even ask legal to keep their eyes on any upcoming legislation that might affect your data management strategy.
5. Analyze your data
If you’re struggling to personalize marketing at scale, you need the analytical insights of proper CDM. What good is collecting data if you can’t analyze it? Go with a platform that synthesizes your data and provides you with actionable insights. You’ll learn when to reach out to customers on the right platforms, with the right messaging.
Customer data management tools
Now that you understand the importance of collecting and synthesizing customer data, it’s clear that having the right tools for the job will make the process easier and more efficient. Successful CDM allows companies to collect high-quality data and store it in one place. This leads to better compliance and more personalization in an increasingly competitive customer information market.
To get started, review your company’s current customer data management strategy. Evaluate its strengths and weaknesses and use our five best practices to get more results out of your data.
You’ll need a solid platform in your corner to do the heavy lifting. Adobe Real-Time Customer Data Platform can handle all your customer data needs.