We’re living in an era of internet where anything you want to know, read, watch is just a search away! Stats prove this, as 4.5 million searches are processed by Google every second. Sounds insane? Well, when you compare it with the 6.4 billion searches they process in a single day, it doesn’t! And organizations today, can’t ignore this digital advancement by their existing & potential customers. They’re required to always be on their toes to gather essential data about them.
Now, there are all sorts of ways to collect crucial data. You have your Marketing team working day-in and day-out to run campaigns that can give important insights about your existing and potential buyers. And you have other teams collecting data as well. But this is where the actual work starts! One which involves creating an efficient structure & framework to manage this vital data. Without which, there’s no point in collecting new data. It’s how you process and manage it that makes a real difference. That’s the focus of this blog – the top principles that would help you set a structure to manage customer data effectively in your organization. So, by the end of this blog, you would have good clarity on how you can make the most of your collected data by managing it the right way. Impressive? Well, let’s get started with it.
What Exactly is Customer Data & Its Management?
From their address to their social media activity, everything is customer data, vital customer data! It’s because depending on the different products & solutions an enterprise offers, the need for relevant data changes, which makes any behavior suggesting data of their present and future customers really important. Around 1 million people login to Facebook every minute. Each one of them has specific interests, and if it matches your firm’s offerings, they can be your potential buyers! That’s why a detailed and deep requirement of data persists among corporates, and that’s why they invest heavily to keep a steady flow of this.
The process of acquiring, organizing, and using customer data in a way that can help a company acquire new customers generates more revenue as we advance. That’s how customer database management can be defined in the most simple manner. When talking about this, We’re referring to first-party data, meaning data collected by your company and used by your company itself. And as already mentioned, this data be anything from social media data to the data collected from website visits. Even transaction data about what your website visitors have bought comes under this. There you go, that’s customer data & its management for you. But do you know how technological shifts from the past years have impacted this process? Well, that’s what I’m discussing briefly next.
Technological Shifts Driving The Need For Better Customer Database Management
Technology has played a massive role in bringing concrete changes in the way organizations manage customer data. And it’s primarily these four shifts that have brought the maximum changes.
- The volume of data has soared immensely: Every organization is dealing with the issue of their present data being of no use 18 months later. So, in a small time-frame like this, they have to manage their data well to get the right results from it.
- The age of new emerging data: Yes, there has been a huge influx of social media and mobile type data post-2010, which has made enterprises to think of ways to manage it well.
- Data moving to cloud in apps like Salesforce: This has posed questions on how this data could be better sorted and managed.
- AI and Machine Learning have perhaps made the biggest impact on how organizations think about managing customer’s data, as these technologies and their multiple algorithms need vast amounts of refined data to get actionable results.
What Mistakes do Organizations Make While Managing Customer Data?
Till now, we’ve talked about the massive abundance of data, what it actually comprises of, its management, and how do technological shifts affect the data management process. But then, what’s the reason to discuss different principles to effectively manage customer data? Because of the challenges customer database management pose in front of every organization. So, let’s discuss these mistakes to understand the importance of having the right data management principles for organizations.
Lack of a Genuine Data Management Plan- If there’s no genuine strategy in place for managing your data, then you’re basically a ship without a rudder! A proper plan needs to be in place to manage the movement, lifecycle, security, quality, and availability of your data. Otherwise, you’re not managing your customer’s data the right way. Hence you’ll get fewer insights out of this data.
Lack of Meta Data Management- With any implemented customer data integration solution, you’re going to have data moving all over the place. So ask yourself, can you tell where it’s going? How it got there? And how many transitions it went through in the process? If not, you’re making a mistake with your customer database management.
Data Quality & Management is Believed to Be an IT Function- This is a very common perception mistake many organizations deal with within their teams. They think that Data quality and its management is the IT team’s problem. Well, it’s not! It’s an important business function that is essential to all teams, and putting it completely on one’s head is a big mistake.
Using Tools Does Not Mean Managing Data- There are good data management tools in the market, but they are just tools. If you don’t have a long term plan or framework to manage customer data in place, this over-reliance on tools won’t give you concrete results.
Treating The Data Warehouse as a Dumping Ground- Yes, it may sound harsh, but that’s exactly how a data warehouse is treated in big as well as small enterprises. Seldom do they explore the vast opportunities hidden in these warehouses, as they don’t have the right structure for it.
Lack of Cohesion Between Teams- Process controls are a very common feature put by management teams in organizations. It might be good on some parameters, but it hinders the customer database management process. How? Due to a lack of cohesion and synergy between teams like Business Intelligence and Data Warehousing. And the results you’ll get from such lack of synergy won’t be completely insightful and actionable.
Security of Your Vital Data- Even if you have a good customer database management system in place, not securing it with apt cybersecurity and firewall is a big mistake. And you have to keep the security tight from the inside as well because 88% of data breaches happen due to negligence from employees only. Staggering, isn’t’ it?
These mistakes I’ve talked about are a very common feature among organizations, big and small. So, I won’t be surprised if you and your company have made some of these mistakes in the past. Even if you’re making these mistakes, I’m sure you would work towards rectifying them now that you know about it. Because once you’re done rectifying, the next sections would help you set the right strategy to manage customer data in a prudent way. Are you ready for it? Let’s jump right into it.
Top Principles to Help You Manage & Bring The Right Results From Your Customer’s Data
Have The Right Data Management Strategy
This is where most organizations falter and pay the price. They don’t understand the importance of having the right data governance & management strategy for customer data management better. Hence, their teams end up spending way more time with way less productivity. And 2020 proved that such a mistake could come back to hurt them very seriously! So, it’s imperative for organizations of all sizes to have a robust & efficient customer database management strategy. This would allow companies to track what data they’re collecting, how are they collecting it, and what’s the use of it? These questions would work as a base on which the whole strategy could be built.
Now, based on these questions, the process of building a complete strategy is divided into three parts:
- Alignment: This part is put in place to have a standardized structure for collecting customer data across all platforms. And this remains the same for everyone and every team in the organization. This alignment of data helps in collecting only that data, which can be processed to give results later. So, with this step, the focus shifts from volume to relevance of data!
- Validation: This is the next step in the strategy, where the collected data is validated for being complete or not, and then used to find patterns about their existing or prospective customers. This step reduces the chances of bad or incomplete data drastically, which allows for better results at the end.
- Enforcement: This step is extremely vital because, in today’s age, a particular data that is more than 18 months old is more or less of no use! So, it’s important for the organization to keep updating on their customer’s crucial datasets to stay in the game. And this step ensures that any changes to data or data collection would go through a pre-defined channel. The data gets correctly updated and stored this way.
Every organization differs in its strategy for customer data management, but these three steps form the core everywhere. Hubspot used these brilliantly to form their customer database management strategy, and they’re still going strong with it.
Remove Data Repetition
That’s a major problem organizations face while managing customer data. The reason being, all teams in the company are collecting data based on their requirements, but are not sharing it with one another. And when they dump all this in the data warehouse, there’s too much repetition, and confusion! Why? Because Business Intelligence teams cannot figure out why a particular data is repeated, and for what event it was used, or was it even used? And this hurts the productivity of teams, as instead of trying to find patterns from good data, they’re giving their time to identify why a data is being repeated!
Well, this problem gets partially solved with a good customer database management strategy, but not completely. Complete transparency, and removing unnecessary process controls is the only way this could be tackled completely. So, in order to manage customer data effectively and efficiently, this one forms an important principle for every organization.
Use Pre-defined Tools For Data Collection
If different teams in an organization are using different data collection & analytics tools, the efficiency of the customer database management process will go down. Why? Because it becomes extremely hard for someone in the company to keep track of the collected data from these tools. Huge chunks of repeated data get stored in the warehouse because of this, which ultimately hampers the productivity of teams working hard to manage customer data. The solution to this? Research long and hard to find the tools that can be used by everyone in the organization. This way, every data is in one place, and life is much easier that way!
Deloitte did the same in their digital arm when they went ahead with SurveySparrow’s data collection tool- Feedback bots, to their entire data collection process. This not just helped them make the process easier, but also helped to de-clutter the entire process for everyone. Impressive and easy, isn’t it?
Collect Only What You Need
In order to manage customer data well, it’s highly important that your teams are collecting only what’s crucial. Yes, the way you collect data would determine how you’ll manage and get actionable insights from it. Moreover, collecting ‘everything’ about your customer or potential customer would only make them uncomfortable. And you don’t want them to lose trust over your brand, isn’t it? So, collecting the right data becomes an integral principle to manage customer data in an efficient manner.
Now, how can you check what data is crucial and what’s not? Well, you can audit every data you get with these four questions:
- Which team needs this data?
- How will it help them?
- Can this data dwindle our customer/client’s trust?
- Can we operate in the same way without collecting this data?
If you don’t have a rational answer to these four questions, maybe you don’t need that particular data!
Have a Robust Data Security Framework
Data Security- A topic that needs no introduction. A lot has been talked about its importance in the modern world. But are organizations implementing the right data security framework? Not many. The reason being, it’s a costly and time requiring process. But it’s totally worth it! Because companies all around the world spent $3.86 million on data breaches in 2020. And given the manner in which breaches have become common, your client database management needs a strong data security framework. Also, the fact that most breaches happen due to negligence from employees only, a solid data security system can prevent all of that. And you want this security with your vital customer data, am I right?
Comply Well With Data Regulation Laws
Data Privacy has become an active topic of discussion in the past couple of years. Why? Because people now understand that organizations are benefitting from their data and can use it in any way they want. And this has got everyone, even the governments across the globe worried. More laws like the General Data Protection Regulation (GDPR) can be enacted in the years to come to regulate data collection furthermore.
The GDPR law has affected the way companies collect their client or customer’s data. With this regulation in place, you cannot collect the data of your website visitors without their due consent. This has changed how companies manage their customer’s data drastically. So, it would be best to comply with these regulations and develop your client database management system accordingly.
There you have it. These are the six principles that are going to help you and your teams manage customer data the best they can. Now, every organization’s data requirement and usage are different. So, the best way for you would be to use these principles and develop a specific data management system for your organization, and hence, make the most of your everyday data!
In the world of the internet, data is gold! We get that, but what’s the use of this data when there are no principles in place to get results from it? It’s not the collection, but how you manage customer data that brings new and exciting opportunities for organizations. These principles, which we’ve listed after careful research, analysis, and surveying, would help you start improving or setting your customer data management system.
Before we bid adieu, I want to reiterate the fact that SurveySparrow and its suite of software can help you take giant steps here. You can implement and integrate these software in no time, and the improved results would be right in front of you. So, if you haven’t checked out their data management solution, we strongly recommend you do and make full use of it. Well then, we’ll be looking forward to knowing about your experience with the whole process. Keep growing!