5 Reasons why Better Business Decisions Start with Better Customer Data Management

For brands that have thrived in the market for at least a year, it is an unspoken rule that business growth relies largely on customer experience (CX). The journey to this, however, is often thwarted by poor customer data management. As a result, it directly impacts CX and other systems that function on the customer data. For instance, a CRM may prove inefficient owing to inaccurate, incomplete and inconsistent customer data. This is a small shortcoming that can prove to be an expensive mistake for brands. At the peak of cut-throat competition in the digital world, efficient customer data management proves to be a winning point. Organizations with a stronger grip on the data and analytics about their customers are bound to have an advantage in the market. However, it is imperative that business leaders put the data to good use, especially while taking business decisions. According to a report from Harvard Business Review, organizations use less than 50% of the structured data in making business decisions. It also stated that less than 1% of unstructured data is used or analyzed. These figures come as a surprise since most of the data analysts clock numerous hours on data, either discovering it or preparing it for use.

Data – The front and center of innovation

While the effort to convert customer data into innovative customer experience has been inconsistent, the year 2020 is witnessing higher levels of commitment, planning, and execution among business leaders. Based on a survey by Gartner, over 67% of CX leaders have forecast a possible increase in their budget in the year 2020, compared to merely 47% in 2017. It goes without saying that the CX market is preparing for increased investment toward a customer data driven CX innovation. This new investment implies increased centralization of data, customer journey automation, and personalization, all the while constantly listening to them and responding promptly. A direct outcome of this will be an exponential increase in customer satisfaction. That being said, CX leaders will need to understand the effect customer data can have on business decisions, and how it can impact in better customer satisfaction. Here are five reasons why a robust customer data management is the first step to better business decisions.

1. Better Customer Profiles = Better Business Results:

One of the most common misconceptions about customer profiles is that they are a static entity. While this is partially correct, a major part of customer profiles is dynamic. Aspects such as name, phone number and email are often constant attributes, whereas aspects such as time of activity, average order value, abandonment rate are variable. Naturally, one may wonder what the connection between customer profiles and business results are. According to a study by Oracle, brands that leverage a unified customer profile have a 2.5 times higher chance of increasing their customer lifetime value. To have access to a unified and accurate customer profile, the presence of a reliable customer data management solution cannot be neglected. In fact, a strong customer data platform can prove to be the single source of truth about the customers, their behavior, buying patterns and requirements. This, in turn, makes it possible to ensure a relevant and intuitive CX. Beyond just the purchasing experience, having a single information repository allows brands to improve their specific functional and channel effectiveness.

2. Customer Insights as a Competitive Differentiator:

In a world filled with data, several organizations consider customer insights to be a onetime activity based on purchase history. However, the best insights are derived by observing customer activity round the clock by getting better access to the variations in their attitude and behavior towards brands and products. This can be achieved by bringing several tools into the picture. But, how does it really make a difference? Here's how. Research has proven that businesses that harness the power of customer insights can witness 85% more growth in sales as compared to those who do not. For this reason, customer data and insights need to be considered a strategic element as well as a competitive differentiator. While different organizations are at different levels of data-maturity, nearly every one of them has access to ample customer data that can be consolidated and analyzed to produce actionable insights. To make this possible, having an effective and efficient customer data management solution is imperative. With a unified source of data, organizations can get themselves better equipped to address customer grievances and close any gaps in experiences.

3. Need for Speed and Context:

Taking data-driven business decisions can be a tricky task and getting the right results is often a balance between speed and intelligence. Tipping the balance to either of the sides can result in a well-planned but slow decision or a quick but ineffective one. A streamlined customer data management can come to the rescue. This is no longer a secret in the business world, considering 73% of business leaders believe that providing a relevant CX is pivotal to their business performance holistically, according to a report by Harvard Business Review. With increased speed, the right use of customer data helps in staying relevant to the customer. An important aspect of contextualization is understanding what parameters are relevant for deciphering customer behavior. While on the customer front, their social media activity, buying history, and location can offer a better context— considering the weather, events and market changes stay relevant to businesses and organizations. The end customer after all, is a person or a business, so fast and contextual CX can be the defining line for business success.

4. More Success with Less Guesswork:

As the era of multiple channels has set in, organizations are seldom short of data to understand where their customers spend more time and buy products. This, in turn, translates to a massive repository of insights that can be the key guiding factor for a brand's marketing strategy. However, according to a study by IBM, only 21% of organizations are thoroughly leveraging customer data to optimize their marketing budget allocation. Also, less than 50% of professionals feel their organizations are able to act on insights that are derived from customer data. An organization with access to a reliable customer data management platform can manage the surge of multichannel data effectively and use it to adapt its marketing strategy to the changing trends. With the use of the internal and third-party data, organizations can target content and go on to provide a personalized CX.

5. Better Growth Planning:

Understanding different customer segments, their demographics and buying preferences has forever been the wave that every organization wants to ride. While this seems like a herculean task, it can be easily accomplished by leveraging internal customer data. In addition to giving a better insight into customers' minds, putting the customer data to good use can also help in creating a strategy for growth—planning new investments for innovations, new products, and new locations. With the ability to address the brand's condition from a strategic and competitive standpoint, business leaders can turn their game around by directing their focus toward efficient customer data management. To Conclude: Over the last decade, the business world has witnessed a massive transformation in customer behavior. The markets have changed, and so have marketers, who are constantly trying newer methods to get more attention from customers. However, the prime objective has continued to remain the same—to understand customers better and provide them with best-in-class customer experience. Streamlining customer data management can not only improve CX but can also simplify the process of delivering better experiences and reduce overhead. That can prove to be a win-win for businesses and their customers.