In the 21st century, data has quickly become one of the most important and coveted commodities, which means customer data management (CDM) might just be the biggest business of the digital era.
Globally, we generate more data than we can reasonably fathom (more than 2 quintillion bytes according to Google!), and yet, combing through this data is not a fool’s errand. If organizations are going to make informed decisions on their futures, customer data management needs to be an integral part of their strategy.
What is customer data?
Customer data is anything that can be tracked, measured, and stored in relation to a business’s customers. Before computers and databases, data came in the form of punch cards, and today, data is collected through a number of sources, endpoints, and metrics.
- Personal data – Personal or basic data entails personal information about a customers’ identity as well as their basic contact information. Demographic data such as age, gender, income, and ethnicity are set alongside a customer’s name, email address, phone number, job titles, and organization history.
- Behavioral data – Behavioral data is gathered through cookie information and IP addresses, and it offers insight into the customer’s experience with your actual products and services.
- Engagement behaviors/interactive data – Engagement behavior or interactive data includes the various points from which your customers connect with your brand. This includes time that a customer has spent on your blog, website, social media page, as well as any likes or shares on those social media pages.
- Attitudinal data – Attitudinal data helps organizations discern how customers think about their companies and institutions. Attitudinal data is gathered through the first-hand accounts of customers through surveys, comments, and online reviews.
- Quantitative data – Quantitative data provides you with the data to analyze both the shortcomings and strengths of your business. Quantitative data looks at customer service metrics, transaction data, online vs. offline metrics, and more.
Why is customer data management important?
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 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.
- As we learned, data generates at an exceedingly quick rate, and having a reliable CDM strategy creates consistency in capturing insights and maintaining data quality.
Customer Data Management: Data Types
Customer data management is a process, and if you want to effectively collect and analyze data, you should be aware of the various steps that go into that process. The below five points will give you a better sense of the various aspects and layers of customer data management.
Your first step should be to understand the various types of customer data. These, as mentioned above, include qualitative data, quantitative data, behavioral data, personal data, and so on. Whether your data is structured or unstructured, it’s important to understand what each of these data types means if you’re going to implement them into your business strategy.
Customer Data Management: Tools
Customer Data Platforms vs Data Management Platforms
There are two major platforms for Customer Data Management: Customer Data Platform (CDP) and Data Management Platform (DMP). CDPs allow you to aggregate personal information from all endpoints, sources, and channels into a unified database. DMP, on the other hand, focuses on third-party data collection, like data from cookies, IP addresses, and so on.
So how do you know whether you need CDP or DMP capabilities? If you need more help understanding how your advertising and marketing campaigns are working, you’re going to need third-party data that comes from DMP solutions.
If you’re trying to gain a better sense of how your current customers are behaving and interacting with your company/product, a DMP has got you covered. DMPs will provide you with a close-up look at your customers’ interactions within your company, which can help you build future marketing campaigns or revise products and services.
Customer Data Management: Processes
CDM processes entail 4 important steps that you should be making to collect and make sense of your 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 made accessible to the according department.
- Analysis – This is the point where you observe your data and sift out valuable insights that are both informed 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
Below are some key best practices for customer data management to ensure you’re implementing your CDM effectively and efficiently.
- Storage – The best way to answer the storage question starts with your needs: if you want a centralized data database, then a CDP will make the most sense. Additionally, CDPs are overall easier to manage and facilitate your data. Help desk solutions are also great ways to both store data and integrate them into your platform in a way that is easy to read and understand.
- Encryption – Data encryption is a central part to data security that allows you to provide confidentiality and security initiatives through authentication processes, non-repudiation, and integration.
- Governance – Standards and policies are set through governance that ensure there is no misuse of user information.
- Access – Data access is about your ability to copy, modify, and move data between your systems. Database administrators are expected to issue and integrate permission for your various departments to securely access the needed data.
- Technology – There are a few different kinds of solutions you can use to store data and enable your customer data management. Some of these include CDP, DMP, Customer Management Relation (CRM), and help desk software, like Gladly.
- Security – Data breaches and cyber threats are some of the most common attacks on businesses, and ensuring you have robust security measures in place is a necessity to your long-term efficacy.
- Recovery – Even with the most advanced security software in place, you should always be prepared with a plan B when handling data. This means having a reliable recovery strategy that allows you to securely and safely back up your files and data.
Using customer data
How can you use customer data to improve sales, retain more customers, build your brand, and connect with your customers in a personalized manner? Below is everything you need to know about how to use customer data.
- Customer Support – 84% of customers told Gladly that they’d go out of their way to spend more money after a positive customer support experience. This means that utilizing data to improve your customer support strategy is paramount. Learning from customer feedback, understanding how long your customers are waiting between agents and channels, and analyzing customers’ issue histories will all offer ways you can predict the kinds of issues your customers are dealing with and make the appropriate changes.
- Marketing – Data plays a huge role in how you develop your marketing strategies. By understanding who your customers are and what kind of events they’re attending, you can narrow down your target demographic and create a campaign that makes sense for your future goals.
- Sales – Customer data will allow your sales team to identify buying trends and patterns, which leads to more predictable buying patterns and more prepared sales agents. Additionally, sales teams can identify exactly how sales and discounts are influencing buying patterns, providing them with the appropriate information to implement the right kind of future incentives.
How Gladly makes customer data management personal
At Gladly, we believe that customer service is best when it’s a conversation. That’s why we’ve designed a platform that enables our customer service heroes to see our customers as people, not tickets.
The Gladly API was built to provide agents with the rich context they need to deliver a seamless customer experience that makes customers feel heard and valued. Gladly utilizes customer data to create unique, personalized profiles and customer history reports that will allow your agents to understand your customers before the point of contact.
Maximize your customer data management strategy with Gladly today.