What Is Customer Data Management?
Customer data management is the practice of organizing, collecting, storing, sharing, and analyzing customer information efficiently. It is also known as CRM (Customer Relationship Management).
The information handled in customer management differs between B2B and B2C; B2B requires corporate and contact person information, while B2C requires personal information.
In B2B business, if the customer is a company, necessary data points include company name, address, phone number, email address, representative name, business description, number of employees, capital, contact information, visit history, and website URL.
Conversely, for B2C businesses, it is beneficial to track items such as name, address, phone number, email address, age, gender, order/purchase/inquiry history, total spend, responses to campaigns or surveys, and birthdays.
Collecting and properly managing such customer data serves as the foundation for effective data analysis and utilization.
Objectives of Customer Data Management
The objective of customer data management is to analyze customer data to provide proposals and marketing activities tailored to customer needs, thereby increasing customer satisfaction and maximizing long-term corporate revenue.
For example, by analyzing purchasing behavior to identify high-value customers, companies can offer new products or services targeted at those individuals to improve business performance. Furthermore, for customers who have not yet made a purchase or signed a contract, identifying the underlying reasons allows for more effective engagement.
Background Behind the Demand for Customer Data Management
Advances in digital technology are a primary reason why many companies are focusing on customer data management today.
Traditional marketing relied on methods like surveys to understand consumer behavior and sentiment. However, in today's digitized world, it is possible to link real-world customer behavior data to digital customer IDs. This allows for the collection and analysis of information from both online and offline touchpoints, enabling the display and delivery of advertisements optimized for each individual customer.
Furthermore, as customer needs continue to diversify, it is no exaggeration to say that the ability to leverage these technologies effectively determines competitive success.
B2B companies, in particular, must organize and manage a wide range of information, including branches, departments, and individual contacts. In short, by organizing and managing this complex data in an accessible format, companies can not only improve operational efficiency but also enhance customer satisfaction through more appropriate engagement.
The Rationale for Customer Management
A survey by HubSpot Japan suggests that the most important factor in purchasing decision-making is trustworthiness. This trend is expected to continue.
Q. In a business context, what kind of company's services or products would you like to purchase?
A.
- Trustworthy (1st place, 41%)
- High product quality (2nd place, 30%)
- Provides products or services worth the price (3rd place, 28%)
These results highlight the importance of maintaining customer trust through rigorous customer data management.
[Reference Article] [2024 Edition] How to Effectively Utilize Customer Data: Collection, Analysis, Management Methods, and Case Studies ▶
Challenges and Countermeasures in Customer Data Management
While the importance of customer data management is increasing as noted above, the difficulty of managing data appropriately is also rising due to the growth and diversification of data.
Below, we introduce common challenges in customer data management and measures to perform it effectively.
Common Challenges in Customer Data Management
A primary challenge in customer data management is "Data Silos." Data silos refer to a state where data is fragmented by department or system and cannot be accessed by others. In short, it is a state where data is scattered and not managed in an integrated manner. In particular, many Japanese companies have vertical organizational structures, and the fact that each department has managed its own data has been identified as a problem that hinders data integration.
When data exists separately across departments, there is a risk of duplication, which makes the entire system difficult to use and slows down accurate data analysis, potentially leading to lost business opportunities.
Furthermore, data silos lead to increased management costs. Funds and time are required to integrate multiple customer data systems to make them usable. In particular, the more systems that need to be integrated, the more effort and cost are involved in system construction.
Measures for Effective Customer Data Management
So, how should you build a data management structure? The keys are "Establishing Centralized Data Management" and "Determining Departments for Data Management and Operation."
First, reconcile the data scattered across departments to enable centralized management and consolidate it into a single database. At this time, it is important to coordinate between departments that use customer data regarding which data to consolidate and in what format.
Also, designate a department to lead data management and operations. Since centralized customer data needs to be managed consistently thereafter, clarify which department is responsible for managing and operating the customer data. However, managing it in a way that only suits a specific department may make it difficult for others to use, so departments should discuss how to manage and operate the data to ensure it is user-friendly for everyone.
Reference Article: [Understand in 5 Minutes] What Is Data Cleansing? Explaining Its Purpose and Concrete Examples! ▶
Tools Used for Customer Data Management
To manage customer data efficiently, the use of IT tools is essential. There are several tools useful for customer data management, with CRM being the most prominent. Below, we introduce the main tools that can be utilized for customer data management.
CRM (Customer Relationship Management System)
When thinking of tools useful for customer management, many people first think of CRM. CRM is a tool specialized in the centralized management of customer data acquired through marketing and sales activities. If you want a tool that is useful for managing existing customer data and maintaining relationships, CRM is a strong candidate. However, because CRM is essentially a foundation for data utilization, the benefits of its introduction may not be immediately apparent. Also, since there are costs associated with implementation and operation, it is important to choose a CRM system that matches your company's business scale and organizational structure.
Reference Article: What Is CRM? Introducing Its Benefits, Implementation Steps, and How to Choose a CRM Tool ▶
MA (Marketing Automation)
MA is a solution useful for supporting marketing operations. MA is a tool suitable for acquiring, nurturing, and managing prospects and churned customers, and it is equipped with functions to automate marketing tasks such as email and advertisement distribution, as well as to analyze customer reactions to those measures. In other words, because MA is a tool focused more on streamlining marketing operations than on customer management, it is recommended to integrate it with CRM for more effective customer management.
Reference Article: What Is MA (Marketing Automation)? Explaining Basic Functions, Implementation Methods, and Keys to Adoption! ▶
SFA (Sales Force Automation)
SFA (Sales Force Automation) is a tool that supports sales activities. It is mainly used in the B2B sector because it manages data useful for the sales department, such as the progress of deals, history of business negotiations, and the activity history of sales representatives.
In addition, it is equipped with functions incidental to sales activities, such as quote creation, daily report creation, and task management, allowing for efficient sales operations. Note that since SFA does not have marketing functions, we recommend integrating it with MA if you are looking to acquire leads.
Reference Article: What Is SFA (Sales Force Automation)? Explaining Basic Functions, Implementation Methods, and Keys to Adoption! ▶
Excel
For simple customer management, using Excel is one option. Since Excel is used by many companies, it is a familiar management method for employees, and implementation costs can be kept low. Also, by using "Conditional Formatting" and "Sort" functions, it is possible to check for duplicate data. However, if you want to perform full-scale customer management, Excel has its limits.
For example, since there are restrictions on simultaneous editing in Excel, it is desirable to introduce dedicated tools such as CRM if you seek comfortable customer data management.
