What Is Customer Data Management (Customer Management)?
Customer data management (customer management) refers to initiatives that enable an organization to efficiently collect, store, share, and analyze customer information (data). 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, items such as company name, address, phone number, email address, representative name, business description, number of employees, capital, contact information, visit history, and website URL are required.
On the other hand, in B2C business, if the customer is a consumer, it is beneficial to have items such as name, address, phone number, email address, age, gender, order/purchase/inquiry history, usage amount, responses to campaigns or surveys, and birthday.
Collecting and appropriately managing such customer data serves as the foundation necessary for data analysis and data utilization.
Purpose of Customer Data Management (Customer Management)
The purpose of customer data management is to analyze customer data and provide proposals and marketing activities that meet customer needs, thereby improving customer satisfaction and maximizing long-term corporate revenue.
For example, by analyzing customer purchasing behavior to identify high-value customers and offering new products or services targeted at them, a company can improve its business performance. Additionally, for customers who have not yet made a purchase or signed a contract, identifying the reasons allows for more effective approaches.
Background Behind the Demand for Customer Data Management
In recent years, the advancement of digital technology is a key reason why many companies are engaging in customer data management.
In traditional marketing, consumer behavior and awareness were grasped through methods like surveys. However, in today's digitized world, it is possible to link real-world customer behavior data to digital customer IDs, collect and analyze customer information from both online and offline perspectives, and display or deliver advertisements optimized for each individual customer.
Furthermore, as customer needs continue to diversify, it is no exaggeration to say that how effectively a company can leverage the power of such technology determines the outcome of competition with other companies.
In B2B companies especially, it is necessary to organize and manage diverse information such as branches, departments, and contact persons in addition to corporate information. In other words, if this complex data can be organized and managed in an easy-to-use format, it not only improves operational efficiency but also enables appropriate approaches to customers, which is expected to improve customer satisfaction.
Rationale for Engaging in Customer Management
A survey by HubSpot Japan suggested that the most important factor in purchasing decision-making is "trustworthiness."
This trend is expected to continue in the future.
Q. In a business setting, what kind of impression would you like a company's services or products to have before you purchase them?
A.
◯ Trustworthy (1st place, 41%)
◯ High product quality (2nd place, 30%)
◯ Provides products or services worth the price (3rd place, 28%)
With the above responses, the importance of thoroughly managing customer data to maintain customer trust is evident.
[Reference Article] [2024 Latest Edition] How to Effectively Utilize Customer Data? Collection, Analysis, Management Methods, and Use Cases▶
Challenges and Countermeasures in Customer Data Management (Customer Management)
While the importance of customer data management is increasing as mentioned above, the difficulty of managing data appropriately is also rising due to the increase and diversification of data.
Below, we introduce common challenges in customer data management and countermeasures to perform it appropriately.
Common Challenges in Customer Data Management
A representative 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 used by others. In short, it is a state where data is scattered everywhere and is not managed in an integrated manner. In particular, many Japanese companies have siloed organizations, and the difficulty of linking data due to each department managing its own data is considered a problem.
If data exists separately in each department, there is a risk of data 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 link multiple customer data systems to make them easy to use. In particular, the more systems that need to be linked, the more effort and cost are required to build the system.
Countermeasures for Appropriate Customer Data Management
So, how should data management be structured? The keys are "establishing centralized data management" and "determining the department responsible for data management and operation."
First, perform the task of reconciling data scattered across departments to enable centralized management and gathering it into a single database. At this time, it is important to coordinate between departments that use customer data regarding which data should be consolidated and in what format.
Also, decide on a department to lead data management and operation. Since centralized customer data needs to be managed consistently thereafter, clarify the department responsible for managing and operating the customer data. However, since managing it in a way that is convenient only for a specific department may make it difficult for other departments to use, discuss how to manage and operate the data among departments and strive to make it easy for all departments to use.
Reference Article: [Understand in 5 Minutes] What Is Data Cleansing? Explaining the Purpose and Specific Examples Clearly!▶
Tools Used for Customer Data Management
To manage customer data efficiently, the use of IT tools is essential. There are multiple tools useful for customer data management, with CRM being the most prominent. Therefore, we introduce the main tools that can be utilized for customer data management below.
CRM (Customer Relationship Management System)
When thinking of tools useful for customer management, many people will think of CRM (Customer Relationship Management system) first. CRM is a tool specialized in centrally managing customer data acquired through marketing and sales activities. CRM is a strong candidate if you want a tool that is particularly useful for managing existing customer data and maintaining relationships. However, because CRM has the nature of being a foundation for data utilization, the introduction effect can be difficult to see. Also, since there are costs for introduction and operation, it is important to choose one that matches your company's business scale and organizational structure when introducing a CRM system.
Reference Article: What Is CRM? Introducing Benefits, Introduction Procedures, and How to Choose CRM Tools▶
MA (Marketing Automation)
MA is a solution useful for supporting marketing operations. MA is a tool suitable for acquiring, nurturing, and managing prospective customers and churned customers, and is equipped with functions to automate marketing tasks such as email and advertisement delivery, and to analyze customer responses to those measures. In other words, because MA is a tool focused on streamlining marketing operations rather than customer management, it is recommended to link it with CRM for more effective customer management.
Reference Article: What Is MA (Marketing Automation)? Explaining Basic Functions, Introduction Methods, and Points for Establishment!▶
SFA (Sales Force Automation)
SFA (Sales Force Automation) is a tool that supports sales activities. Because it manages data useful for the sales department, such as the progress of deals, history of business negotiations, and activity history of sales representatives, it is mainly utilized in the B2B domain.
Also, since it is equipped with functions incidental to sales activities such as quotation creation, daily report creation, and task management, sales activities can be performed efficiently. Note that since SFA is not equipped with marketing functions, we recommend linking it with MA if you seek lead acquisition.
Reference Article: What Is SFA (Sales Force Automation)? Explaining Basic Functions, Introduction Methods, and Points for Establishment!▶
Excel
For simple customer management, using Excel is one method. Since Excel is used in many companies, it is a management method familiar to employees, and introduction costs can be kept low. Also, if you use the "conditional formatting" and "sort" functions, it is possible to check for duplicate data. However, if you want to perform full-scale customer management, there are limits to Excel.
For example, since there are restrictions on functions for simultaneous editing in Excel, the introduction of dedicated tools such as CRM is desirable if you seek comfortable customer data management.
