What Is Customer Data Management?
Customer data management is the practice of organizing, storing, sharing, and analyzing customer information efficiently. It is also referred to 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 items 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 business where the customer is a consumer, it is beneficial to include items such as name, address, phone number, email address, age, gender, order/purchase/inquiry history, transaction amount, responses to campaigns or surveys, and birthday.
Collecting and appropriately managing such customer data serves as the foundation for data analysis and utilization.
Purpose of Customer Data Management
The purpose of customer data management is to analyze customer data to 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, companies can improve their 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 of the Demand for Customer Data Management
One reason many companies are focusing on customer data management in recent years is the advancement of digital technology.
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 sources, and display or deliver advertisements optimized for each individual customer.
Furthermore, as customer needs continue to diversify, it is no exaggeration to say that the ability to effectively leverage such technology determines the success or failure of competition with other companies.
B2B companies, in particular, must organize and manage diverse information, including branches, departments, and contact persons, in addition to corporate information. In other words, if this complex data can be organized and managed in an accessible format, it not only improves operational efficiency but also enables appropriate approaches to customers, leading to higher customer satisfaction.
Rationale for Implementing 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.
Q. In a business context, what kind of impression would make you want to purchase a company's services or products?
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 thoroughly managing customer data to maintain customer trust.
[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
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 measures 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 and not managed in an integrated manner. In particular, many Japanese companies have siloed organizations, and the fact that each department has managed its own data has made data integration difficult.
When data exists separately in each department, there is a risk of duplication, making the entire system difficult to use and slowing down accurate data analysis, which can lead to missed business opportunities.
Furthermore, data silos lead to increased management costs. Funds and time are required to link multiple customer data systems to make them easier to use. In particular, the more systems that need to be linked, the more effort and cost are required for system construction.
Measures for Proper 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 and gathering it into a single database to enable centralized management. 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 which department will take responsibility for managing and operating it. However, managing it in a way that is only convenient for 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? An Easy-to-Understand Explanation of Its Purpose and Specific 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 particularly 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 effects of its introduction can be difficult to see. Also, since there are costs associated with introduction 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? Benefits, Introduction 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 prospective and churned customers, equipped with functions to automate marketing tasks such as email and advertisement delivery, and to analyze customer reactions to those measures. In other words, because MA is a tool focused more on streamlining marketing operations than customer management, it is recommended to link it with CRM for more effective customer management.
Reference Article: What Is MA (Marketing Automation)? Basic Functions, Introduction Methods, and Points for 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 activity history of sales representatives.
Additionally, it is equipped with functions incidental to sales activities, such as quote creation, daily report creation, and task management, allowing for efficient sales activities. Note that since SFA does not have marketing functions, we recommend linking it with MA if you are looking for lead acquisition.
Reference Article: What Is SFA (Sales Force Automation)? Basic Functions, Introduction Methods, and Points for 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 introduction 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, introducing a dedicated tool like CRM is desirable if you seek comfortable customer data management.
