From such cases as Uber, collecting and managing customer data should be considered importantly. In spite of the fact that the information captured can generate so many values to the organizations, collecting process should be carried out in a right manner.
In the following sections, there are the best practices for companies to make sure effective customer data management.
Security is the top priority.
From one study, the average cost of data breach would be nearly 4 million dollars. It is said that both small and medium businesses have to face up with average losses of 120 thousand dollars for each data breach.
As you collect individual information from your customers, including their home phone numbers and addresses to details regarding the financial status of their company, you need to build a plan in order to make sure that their information is secure. This would help build customer trust and prevent your business from more serious and unexpected problems.
In order to guarantee the security of your customer data, you should make an investment into a customer relationship management, make an investment into a backup system and carry out a training about customer data for your staff.
In case you are not sure whether to take these measures, you can imagine one day you have to cope with a security breach. The consequences almost always have a decrease in customer confidence and a big impact to profits.
Collect information ethically
As you may have known, Facebook got a lot of problems after the data firm Cambridge Analytica had taken the details of about 50 million Facebook users without their notice. People were angry and requested an investigation of this social media company. Of course, confidence in Facebook experienced a drop.
Trust is a big component of establishing relationships with your customers and partners. The most effective way to build trust is to make clear policies for collecting data. You should reveal clients how their data is collected and secured. If clients feel unclear about this, you may lose their confidence and trust in your business.
Make decisions of what you are truly in need
Too much data can be unnecessary when it comes to making decisions. Hackers can also try to access your data which you do not need to have. In other words, you are not going to take advantage of all customer data you have. Actually, about 60 to 73 percent of data in the company is not used.
Deciding what data to collect asks for strategic thinking. The data you get from your customer should have a purpose. You can meet other executives in the company to decide what information your company is in need. You can deal with such questions as how the data aligns in your company goals, how each piece of data can be analyzed and how the data could make a contribution to the customer experience.
If you are getting information about your clients through marketing automation software, you should also think of the data you will use. For instance, you may need customer email address but you do not need their phone numbers and vice versa. It is unused to collect the data just because you can.
If you capture only the information that your businesses really need to achieve the sale, you can streamline the processes more easily.
Make an investment into a customer database software
The spreadsheet used to be the best method to store customer data. However, the case has been changed. Businesses that take data as their first priority will save their customer information in a safe database, which means customer relationship management tool that is compliant to GDPR. These tools are made to make the tasks of organizing and collecting important data secure and easier. They can also offer segmented customer insights according to the data, which is truly ideal to know the chances for improvement in the upcoming time.
Back up your data
In spite of the fact that it is really possible to lose data, over a half of small and medium businesses are not well prepared for data loss. This case has reached an alarming state as 60 percent of the companies losing their data will have to be closed down in 6 months. Data backup and a recovery plan are a must.
It is highly recommended to have a good backup strategy for all your customer data in case there would be a problem to your system. When setting up a data backup plan, you should ask such questions as what your data backup budget is, where you will store the backups and what your recover plan is.
The right backup will help secure your customer data and gain trust for your company. you will also need to check your backup system carefully in order to make sure that everything is operating smoothly.
Clean up your customer data
Customer data would become outdated after some time. So apart from having a data backup plan, you should make a plan to clean up your data.
More precisely, you should consider validating and updating information such as email addresses, phone numbers as well as home addresses. Do not forget to eliminate copies and remove contacts that you are not using. This type of data cleansing will boost the value of your existing data. Some major things to consider when it comes to data cleansing include data audit, which means what information you currently have, avoiding silos and making sure that your company data format is not inconsistent.