Customer data is now the world’s most valuable resource, and how you manage yours can impact your business success. Proper customer data management can help you improve customer experience, boosting your business sales. It can also ensure your business avoids costly data breaches. Research indicates that 29% of organizations lost revenue after data breaches. While this is only one aspect, it shows why customer data management benefits your business. Here are some strategies to execute this task effectively.
Take Data Security Seriously
Many consumers claim they’ll stop spending on businesses for several months after a data breach. That shows how important customers take the data they leave with businesses. And why not? Your customers want assurance that their personal information with your business is well-guarded. It’s also worth noting that data breaches can cost your business. A report by International Business Machines (IBM) and the Ponemon Institute indicated that the average cost of a data breach has now hit $4.35 million. But it doesn’t end there; the financial implication may continue even years after the breach is resolved.
That’s why you need to take data security seriously to help prevent breaches in the first place. You should have a long-term plan to keep this information safe, whether phone numbers, credit card details, emails, or bank information, you must have a long-term plan to keep that information safe. Doing this will help prevent costly losses in the future and build trust with your customers, so keep this in mind. Speaking of customer trust, the next point is important.
Don’t Gather Information Without The Customer’s Consent
Always gather customer information with their consent. This point is pretty much non-negotiable, as it ensures that you don’t violate customer trust while remaining completely transparent regarding how you collect your data. Remember also that such violations can easily result in costly legal battles with your customers, meaning you’ll lose money and, most likely, your customers too. Regardless of how you gather customer data, whether through social media analytics or tracking cookies, explicitly inform your customers of what you’re doing and why. Also, allow them to opt out of such a process, especially for customers unwilling to share personal information online. It also helps to tell your customers how long you intend to keep their information, so keep this in mind.
Avoid Data Silos
Data silos occur when you store customer data in different departments in your business. For example, the sales department may have its pile of data, while the marketing and social media departments have different piles. It’s even worse if the various departments are not sharing or comparing data. Data silos make managing customer information very difficult, and in some cases, some information may be inaccurate. Of course, this usually does not happen intentionally, as various department activities can lead to the buildup of data. However, this situation shows a lack of data governance strategy, making data management more challenging. Some departments may even withhold important information from other departments. That is most likely to happen in businesses with high department competition. So, how can you avoid data silos? The answer is in the next tip.
Invest In A Customer Database Software Solution
The old days of using long spreadsheets to store customer data are long gone. Today, you can find different software solutions or customer relationship management (CRM) tools to help manage your computer’s data more efficiently. Also, most software solutions are designed to enhance data security. So, not only are you getting efficient data management, but you’re also keeping your data more secure. You’ll even find CRM solutions purposely designed to suit your business type. For example, you can invest in construction CRM software if you run a building company or choose restaurant CRM software for a food business. Most software solutions feature tools designed to simplify data collection and organization, so feel free to consider this. All your data will be in one location, and you can restrict access or limit it to only authorized people in your business.
Only Collect The Information You Need
According to some studies, as much as 73% of customer data collected goes unused. That means most businesses usually collect a lot of data without utilizing them. This wastes time and leaves you with too much clutter. So, be selective about the data you collect, limiting yourself to what is important to your business. Doing this will also keep your platform from being overloaded. You need customer data for a reason, so take the time to identify what issues you intend to address with the data. It also helps to have a proper plan regarding how your business will use the information. The more data you pile (and fail to use), the more information you put at risk about your customers.
Back Up Your Data
While this point may sound like a no-brainer, it’s worth mentioning. As already pointed out, losing customer data can have massive financial consequences. Apart from deliberate data breaches or cybercrime, you can lose business data in several ways, including natural disasters. But regardless of how the data is lost, you want to ensure that you have a backup readily available, as this will prevent costly business downtime.
Several options are available if you need to back up your business data. Some include using removable media, opting for hardware appliances, investing in external hard drives, using data backup software, or turning to cloud backup solutions. Of course, your budget will determine your best option, but most experts advise investing in the best cloud backup storage solutions. They usually offer greater security and easy authorized access, so keep this in mind.
Have The Right Data Management Strategy
Many businesses fail to implement a reliable data management strategy, and most don’t even see why they need to. As a result, their workers waste a lot of time with little or no work productivity. It’s important to have a robust strategy in place regarding data collection. Doing this makes it easier to track what you collect, how you collect it, and what use it offers your business. Every efficient data management strategy should have three main components. The first is alignment, where you should have a standardized structure for collecting customer data across multiple platforms or channels. The second is validation. As the name suggests, you should validate the data you collect, ensuring that it is complete, accurate, and represents your customer base. The third component is enforcement or updating. Here, you ensure that every data collected is correctly updated over time and goes through a predefined channel. Doing this is important because data loses its usefulness after 18 months. That said, constant updating is crucial to ensure you always have reliable and useful data.
Understand Your Customers
Understanding your customers is one of the first steps toward efficient data management. That means you know who your customers are and what they need. Why is this so important? That’s because it allows you to segment their database more effectively by understanding their preferences, behavior, and needs. That’ll also help you tailor your marketing strategies accordingly. Such an understanding can also improve how you engage or interact with your clients when seeking to boost customer experience and promote loyalty and retention. Also, knowing your customers and understanding the data you collect from them makes it easier to identify potential pain points and address areas you need to improve.
Don’t Compromise, Manipulate, Or Sell Customer Data To Third Parties
Your customers trust you to keep and protect their data, and you should not compromise that in any way. You don’t want to manipulate the data to suit your business or drive sales. You may also be tempted to sell important or sensitive customer data to wealthy parties or the highest bidder. While such actions can easily generate money for your business, they can quickly cause you to lose customers when they find out. Once your customers feel that personal data has been compromised or invaded in any way, they’ll not return to your business. Some may even take legal action against your company. That will lead to a lack of trust, tainted credibility, and, eventually, loss of revenue.
Customer data management is essential for preventing security breaches, lawsuits, revenue loss, and damaged brand reputation. Hopefully, you’ll consider these strategies for the best results.