I’m writing this blog post in the days running up to the compliance deadline for GDPR, the EU regulations for the responsible control and management of personal data. Over the past couple of years and months, we have seen news headlines about the misuse and mismanagement of customer data.
We all know that customer data is a key asset for the modern business. Companies that use customer data well, through “listening” to their customers via their data, are offering relevant and personalized customer experiences. These businesses are the ones that are becoming customer centric and taking a lead in the market.
So, in this environment of both increased regulation of customer data and a clear understanding of the strategic importance of customer data, an effective customer data management strategy is going to be a key success differentiator. A well-deployed customer data management strategy can make a difference in what products are released, how they’re marketed, and even how the brand communicates with consumers.
Even though most business leaders understand this differentiator, for many companies the effective collection, stewardship, and application of customer data within their operations is a different story and presents one of the toughest business challenges.
Customer data management is broadly defined as the people, processes, technologies, and systems that collect, analyze, and organize customer data. The term first came into use in the early 1990s to describe the technologies that replaced manual spreadsheets and paper-based customer surveys. It fell out of fashion for a time, but in the last 10 years has taken on new prominence as solution providers try to move away from difficult-to-understand product jargon like “enterprise feedback management.”
Customer data management also refers to the processes associated with centralizing the management of customer information. An effective customer data management solution assists with constructing a single customer view, often called a “golden customer record,” and can provide substantial benefits to the enterprise at large. CDM solutions can break down silos of customer data so that users from across the business can access the same view of the customer in a controlled manner. It’s because of this that customer data management is like master data management, except with a narrower focus.
Put simply, centralizing the management of customer information is critical for a business’s continued longevity. According to DZone, 92 percent of organizations have 16 to 20 data sources, with that data spread across multiple locations in multiple formats. With so many data sources spread throughout the organization, and locked into functional and channel-specific silos, there is no way to build a single view of the customer without implementing CDM processes and technologies.
Strong customer data management practices empower companies to build better products, orchestrate contextually relevant marketing campaigns, and provide a personalized customer experience. Customer retention dramatically improves in organizations with strong CDM practices, with Forbes Insights finding that data-driven marketing organizations are five times more likely to achieve a competitive advantage (74 percent vs. 13 percent).
Higher customer retention is a tangible benefit to the organization. We all know that it’s cheaper to retain existing customers than acquire new ones, so the ability of CDM processes to improve that capability can provide substantial support to revenue. With customers increasingly demanding personalized experiences across channels, the benefits of robust CDM processes are hard to deny.
The intent of implementing customer data management technologies and practices is to eliminate siloed data within the organization, improve the accessibility of customer data, and provide real- or near-real-time insight into customer behaviors and preferences. Many traditional data management solutions are ill-suited to this task – especially because the type and cadence of customer information have dramatically shifted in the past 10 years. Where customer data used to be largely structured, as in CRMs or survey tools that update in large-scale batches, modern customer data includes streaming data like social media posts that lack any sort of structure at all.
The change in type and cadence of customer data necessitates a solution that is flexible enough to ingest any form of data, regardless of pace. Enter customer data platforms (CDPs), which are architected to accept any volume, variety, and velocity of customer information. CDPs break down the functional and channel-specific data silos that many organizations possess, as well as unify that information into golden customer records that are readily accessible to business users.
With a CDP in place, we have seen brands create campaigns and experiences that are relevant to the individual customer, and then improve engagement and enhance retention. The insight provided within a customer data platform is key to a successful CDM strategy because of the CDP’s ability to act as a single point of data access and control. Through the use of a CDP, brands are able to confidently leverage the full scope of customer information throughout the organization to build and deploy the personalized experiences consumers have come to expect.
Customer data management is a crucial discipline in the modern business landscape. The dawning of the GDPR age has helped consumers understand that they do own their data and will expect that, in return for sharing their data, they will demand personalized experiences. It is only with a CDM strategy in place that brands can meet that expectation. Brands that understand this reality, and deploy the right systems and processes, will position themselves to benefit in the long term. After all, brands with CDM in place understand that it’s a customer’s world – we are just marketing in it.