Huw Waters
By Huw Waters on 07 Feb, 2024

Data is a key component in the success of any business –   - but it’s not enough to simply acquire and have a mass of data. In order to use data in the right way, businesses must create an effective customer data management strategy, allowing easy access to customer information and helping to drive better decision making.

What is a customer data management strategy?

A customer data management strategy is a plan for how your organisation uses customer information, such as contact details, purchase history, and preferences. It outlines the systems and processes by which customer data is collected and stored, as well as how the data is used to inform business decisions and even tailor customer experiences.

The purpose of a customer data management strategy is to maximise the value of customer data. Creating such a plan requires careful consideration of your customers’ needs and expectations, as well as an in-depth understanding of what data is available and how it can be used.

Benefits of a customer data management strategy

A well-thought-out customer data management strategy offers many benefits to businesses.

1. Improved understanding of customers

With a good customer data management strategy, you can gain better insights into your customers’ behaviours and preferences. Having this data can help you tailor customer communications and personalise the messages they receive. Examples include recommending products related to ones they’ve bought in the past, or providing content that’s related to their interests. A personalised call-to-action outperforms a generic alternative by more than 202%.

For example, you might analyse customer data to discover that a certain customer typically responds well to promotional discounts. Armed with this information, you could use targeted promotions to drive customer loyalty and engagement, increasing the chances of a successful sale, and the development of a long-term relationship with that customer.

2. Increased efficiency

By having access to detailed customer data, you can streamline operations and optimise processes for maximum efficiency. This improves the customer experience and helps to reduce costs.

For example, having easy access to customer purchase history can allow you to resolve customer queries or complaints quickly and accurately by looking up past orders. For example, customers may have to recall purchase information that they wouldn’t need to if the customer service agent has this to hand.

You can also create tailored automations that trigger based off purchase data, such as suggesting new or related products, thus increasing efficiencies and increasing revenue.

3. Improved decisions and campaigns

3 in every 5 businesses are using data to drive innovation and make decisions.

Having an effective customer data management strategy in place helps you to make more informed decisions based on accurate insights into your customers’ needs and preferences, such as their favourite products and services.

This information can then be used to create more effective marketing campaigns, and to develop and refine your product offering.


Best practices for a customer data management strategy

1. Establish clear goals

Before creating a customer data management strategy, it’s important to establish clear goals and objectives for what you want to achieve with customer data. This helps to focus your strategy and ensures that all decisions around the collection, storage, and use of customer data are in line with your overall business aims.

Your business objectives must inform your data management strategy. If not, you’re likely to waste valuable time and resources collecting and analysing the wrong types of data.

2. Collect the right data

You should only ever collect data that is necessary and relevant. Customer data must be used responsibly and add value to the customer’s experience.

To ensure you’re collecting the right data, you need to review and update your data collection policies regularly and consider questions such as:

  • Is this data correct?
  • How will we use this data?
  • Was it sourced ethically and legally?

3. Secure data storage

Data security should be a top priority when creating a customer data management strategy.

This means investing in secure storage solutions with encryption and firewalls, which can help protect customer data from being accessed by unauthorised parties and reduce the risk of a data breach.

No matter what type of data you’re collecting, your customers will want to know that their information is safe.

Not only will a data breach give your company negative press, but it could also be extremely costly. In 2023, data breaches cost UK businesses an average of £3.2m, with the UK the sixth most expensive country for data breaches.

4. Use data responsibly

You must take steps to use customer data responsibly and in accordance with any national or international data privacy regulations that may be in place.

You should only use customer data for legitimate purposes, such as providing better products and services or improving their overall experience with the business, and not for unethical or unlawful activities. Make sure that your company establishes data governance to ensure data is used correctly and consistently across the organisation.

Tools and technology for managing data

Technology and tools have made it easier than ever before to manage customer data in a secure and effective way.

One of the biggest challenges typically faced in customer data management is the accumulation of data silos - disparate data sets that exist across different departments, creating barriers to data access for different groups. For example, having the finance database kept separately from the sales database can make it difficult to work collaboratively and share data about customers and sales - a barrier that can cause serious issues.

Studies from the US suggest that – largely due to inefficiency when it comes to use of data. Just  - meaning that businesses are missing potentially millions of insights each year.

Fortunately, there are many technologies, such as customer relationship management (CRM) systems and data warehouses, which can make it easier to harvest, access, and manage data, ensuring that you have the information you need to make informed decisions.

Technology to support customer data management

Data management demands careful supervision from the moment it’s created until it’s retired.

When managed correctly, you can mitigate risk while enhancing data usability and quality. Using the correct technology solution is essential for ensuring you can integrate and consolidate customer data from different departments in one secure place. Below, we’ve outlined a number of marketing technology (Martech) solutions that could become a core component of your customer data management strategy.

Customer data platforms (CDP)

A CDP allows you to collect, store, analyse, and share customer data in one centralised hub, giving you a single source of truth for customer information. Customer data platforms tie together databases that traditionally don’t share data, such as marketing platforms and ecommerce engines. Not only does this make it easier to access data about customers, it also helps to ensure that the data is accurate and up to date by collecting data points and consolidating them into a unified customer profile.

Customer relationship management platforms (CRM)

A CRM system helps you to manage customer data effectively, streamlining the process of collecting, storing, and analysing customer information. Most CRM systems will offer a range of features such as contact management, sales automation, and analytics tools - all of which can help you to better understand your customers and deliver a tailored experience.

Data analysis and visualisation tools

Data analysis and visualisation tools make it easier for you to interpret customer data, enabling you to gain valuable insights into your customers’ behaviour.

These tools allow you to quickly identify trends in customer data, such as spending habits or preferences, helping you to better understand your customers and make more informed decisions. These tools also provide a range of reporting features that can be used to analyse customer data in more depth, ranging from bar charts and heat maps to other visual representations.

Data segmentation and personalisation tools

Through data segmentation and personalisation tools, you can create more targeted campaigns that can be tailored to specific customer groups - enabling you to deliver a better experience for everyone. Additionally, these tools can be used to track the success of campaigns, helping you gain valuable insights into your customers’ behaviour.

Which technology is best for managing customer data?

Choosing the right technology to manage customer data is ultimately a matter of what’s right for your business and the way in which you plan to use data.

If you want to collect and store customer information in one central hub, a CDP is likely to be a better choice. If you’re looking for more in-depth analytics and insights into customers behaviour, then a CRM might be more suitable. Or you might need both.

Ultimately, it’s important to consider the specific objectives of your organisation when selecting which solution will be most beneficial. DCX can provide expert advice on the right customer data management platforms to meet your needs.

How DCX can help transform your customer data management

Knowing how to create a successful customer data management strategy is critical if you want to get the most out of customer data. But knowing how to implement it successfully is a whole other challenge. That's why you need a trusted, expert partner like DCX on your side.

We understand the power of customer data and have worked with multiple businesses across various industries to transform the way they manage and use customer data.

Our team of experienced professionals are experts in the fields of customer data management, analytics, and segmentation, and will help you make the most out of your customer data, including helping you to create a successful customer data management strategy. Contact us today and let us help you get started with managing your data – and using it to its full advantage.

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