The Ultimate Guide to Customer Data Management

Gathering, organising and analysing customer data can inform better business decision-making, enabling effective marketing and improved retention. But due care must be taken to meet compliance and regulatory concerns, and to manage this information in an efficient and ethical way.

From gathering and classifying different data types to backing up data, training employees, and security considerations; this guide will discuss a number of concerns relating to effective customer data management, so you can put your data sets to good use while ensuring total compliance.


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What is Customer Data Management and Why is It So Important?

Customer data management relates to how a business gathers, stores and manages information about its customers. Used effectively, a customer data management strategy can bring a wealth of benefits, from increased sales and better marketing, to improved customer relations and retention.

Gathering, managing and analysing customer data has become a prerequisite for businesses in all sectors over the past decade. With advanced analytics platforms allowing for deep discovery and insights, businesses rely on customer data gathering to gain a competitive edge, and act on new opportunities within their arena.

But with strict compliance, privacy and security rules governing how businesses manage, store and use customer data, a proactive approach is needed to stay within the law. New regulations such as GDPR have underlined the importance of ethical data management, with heavy penalties for those who fail to comply.


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What Are the Different Types of Customer Data Gathering?

Businesses collect customer data in all sorts of ways, either via a tactical gathering strategy or through customer-led interactions, activity and behaviour. Let’s take a look at the main types of customer data gathering and the tools used to facilitate them.


Bottom-Funnel Data Gathering

Bottom-funnel data gathering is used to collect information from customers who are ready to make a purchase. Customer behaviour and activity shows that they’re likely to make an imminent conversion, having spent considerable time exploring a business’ products, services and offering.

Businesses collect data from bottom-funnel customers by the following means:

  • Landing page forms
  • Shopping cart interactions
  • Brochure requests
  • Instant chat functions


Top-Funnel Data Gathering

Businesses seeking to convert prospective customers at the top of the sales funnel gather a huge swathe of data about their activity, behaviour and demographics. This is later used to inform marketing and sales efforts, with entire campaigns based on information collected from top-funnel users.

Some of the most common forms of top-funnel data collection include:

  • Newsletter subscription
  • Product demo or trial requests
  • Downloading a free resource
  • Low-commitment on-page activity, like specific clicks or engagement


Existing Customer Data Gathering

Collecting data from existing customers is a powerful way to boost advocacy, increase sales and improve retention, all while saving on the cost of generating new leads. Businesses gather existing customer data for a variety of reasons, whether it’s to improve their products, drive sales or increase engagement and visibility.

Gathering data on existing customers often combines the following tactics:

  • Remarketing emails
  • Promotional offers and discounts for existing customers
  • Questionnaires and feedback forms
  • Social media campaigns and engagement posts


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Best-Practice Tips for Managing Customer Data

However a company gathers data, and for whatever purpose, it’s critical that the information is stored, handled and used within the parameters of current legislation. To ensure this, here, we share our best-practice tips for managing and securing customer data.


First and Foremost, Consider Security

Information security should be your number one priority when gathering customer data. Consider how and why information could become compromised, and the technology, training and management strategies which will be required to keep it safe.

Not only is data security a business-critical issue, customers will also want assurance that their information is being handled and stored securely. Any and all breaches, however trivial, could be of great reputational detriment, so invest in the appropriate security provision to guarantee maximum data safety.


Think: What do We Need?

In a rush to glean rich insights from consumers, brands often trawl customer data without stopping to consider if the information is really needed. Known as ‘data saturation’, this grab-and-go approach to data gathering brings with it a number of pitfalls, not least the inability to effectively manage and secure the huge reams of data at their disposal.

But it doesn’t have to be this way. With a tactical, strategic approach to data gathering, businesses can take only what they need, staying firmly within the data compliance remit as a result. When collecting data, consider how it aligns with your company goals and objectives, and how it will be used to support your sales and marketing strategy.


Invest in the Appropriate Software

Safe, efficient and secure data storage starts with the right software. When it comes to data security and compliance, shared spreadsheets will no longer cut it; brands must invest in a secure database if they’re to guarantee the safety of customer information.

One of the most efficient ways to manage and store customer data is through a customer relationship management platform, or CRM. Developed to keep information safe, they feature advanced tools which let you manage, refine and segment data sets, so you can use the data tactically while still guaranteeing maximum security and compliance.


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Training and Access

However robust your data security provision and assets, weak spots will always exist if personnel aren’t adequately trained in data security and compliance. Human activity is the single biggest risk to customer data, so it’s vital that companies consider this as part of their data protection strategy.

In cases where it’s unfeasible to train all personnel in data security, there is a second line of defence: granting data access only to those with the skill, responsibility and aptitude to manage information safely. Not only does this better safeguard customer assets, but also makes it much easier to identify those liable should a security breach occur.


Data Management, Cleaning and Backup

As touched on above, effective customer data management hinges on the right software provision. Managing and cleaning-up data is a vital step from both a commercial and customer relations perspective, and platforms like enterprise resource planning (ERP) software can facilitate intuitive, streamlined data management, clean-up and recovery.

When it comes to effective data management, it’s important to have workable strategies in place for the following:

  • Data backup
  • Data storage and segmentation
  • Data recovery
  • Data auditing
  • Data formatting and centralisation


So, there you have it, the ultimate guide to customer data management and security. At JS3 Global, our expert ERP specialists are here to help you find the right software solutions for your business, whatever your priorities and objectives. For more information or to learn more about our ERP consultancy services, visit the homepage or call us on +44(0)161 503 0866.