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What Is Customer Data Management — And How Can You Ace It?

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Customer data is a precious thing. Are you managing yours well?

Managing your customer data can seem like a daunting task, and it does require a bit of strategy and planning — but by following some proven best practices, your team can learn how to make the most of its data so you can strengthen relationships and turn more leads into customers.

In this blog post, we’ll go through what customer data management is, why it’s important, and four best practices for managing customer data.

What is customer data management?

Customer data management, or CDM, is the process of gathering, organizing, analyzing, and using customer data from different sources to create a unified profile of each customer.

The ultimate goal of this process is to effectively deliver a personalized customer experience. As a result, your customers are happy and loyal to your business, and you increase your revenue.

CDM usually involves first-party data, meaning it uses data your business has collected. You can use customer relationship management (CRM) software like Nutshell to manage your data.

Check out the full guide to managing and organizing your customer data


Your guide to managing and organizing customer data

Why is customer data management important?

Whether you’re a business-to-business (B2B) or business-to-consumer (B2C) company, you’ll benefit from using customer data management strategies.

Customer data management is crucial for your business as it:

  • Provides an organized hub of customer data and metrics: Spare your team members the headache of switching from one app to another, looking for customer data. With customer data management, everyone on your team turns to a single source every time they need to pull a tidbit of data about a customer they’re interacting with.
  • Helps you better understand the needs of your customers: The customer data you collect gives your team members insights about whom they’re marketing or selling to and whose concerns they’re trying to solve.
  • Allows you to upsell and cross-sell: Because of a deep understanding of your customers, you can anticipate what they’ll need in the future, giving you upsell and cross-sell opportunities.
  • Turns customer data into meaningful profiles: By understanding your customers better through a holistic profile, your marketing, sales, and after-sales teams can personalize interactions with your customers and improve customer experience.
  • Strengthen customer relationships and foster loyalty: An improved customer experience results in repeat purchases and translates into an increase in revenue and business growth.
  • Helps your business comply with data collection regulations: Customer data management empowers your team to comply with regulations related to data privacy. Having a documented process for storing—and even destroying—data ensures that your business properly handles your customers’ information.

Is your business ready for a CRM?

Find out here.


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What types of customer data should my business collect?

Gather and store only the data that you will need based on your objectives. Having too much data can make drawing insights a chore.

Here are some types of customer data that you can collect and manage:

1. Customer identity data

Your customers voluntarily share this data with you whenever they make a purchase. Identity data includes your customer’s:

  • Name
  • Phone number
  • Email address
  • Mailing address
  • Birthday

2. Customer attribute data

Attribute data tells you more about your customers’ characteristics. You can draw out this data from surveys, questionnaires, focus group discussions, and interviews to know your customer’s: 

  • Education
  • Marital status
  • Annual income
  • Job title
  • Number of children
  • Vehicle type 
  • Household type 

3. Customer behavioral data

Which web pages did a customer visit before filling out a form? What products did they purchase? Which emails did they open?

These are some of the questions that behavioral data can answer. Behavioral data tells you more about your customer’s interactions with you, like the:

  • Number of times they visited your website
  • Website forms they submitted
  • Emails they opened
  • Email links they clicked
  • Products they purchased
  • Amount they spent
  • Products they abandoned in their shopping carts
  • Customer support tickets they submitted

Collect only the customer data that you will need. Do you want to win new customers and reach out to new prospects in the future? Consider gathering attribute and behavioral data.

Target an audience with characteristics similar to your customers. You can also analyze your customers’ interactions with your website or email campaign. The content they engage with reveals which products or features they find appealing.

5 customer data management best practices

Adopting customer data management best practices helps you make the most out of your data. In addition, safeguarding your customers’ data makes you a trustworthy brand and gives your customers peace of mind.

Here are five customer data management best practices you can adopt:

1. Develop a documented customer data management strategy

Documentation that details your strategy for managing customer data serves as your team’s guide to navigating CDM and keeping your processes organized. Without it, measuring your success will be difficult.

Set clear objectives for your customer data management efforts. Document your objectives along with your strategies, so everyone in your team is on the same page. Your documentation should answer the following questions:

  • What are your business’s objectives for your CDM efforts?
  • Which customer data will you collect and use to build customer profiles?
  • What will be your data sources?
  • How and where will you store the data?
  • How will you validate and standardize the data?
  • Who will be the key persons assigned to manage the processes?
  • How will you make sure that your business complies with data regulations where you operate and where your customers are based?

2. Empower your sales team

Managing customer data can appear daunting at first. Train your teams involved with managing customer data so they’ll understand your strategy and feel comfortable with your tools.

One of the tools you can use for your CDM efforts is Nutshell. It’s an easy-to-use CRM that can get your team running in days—not weeks or months. And if your team has questions, our friendly Michigan-based support team can assist you by phone, email, or live chat.

3. Invest in the right tools

A CRM platform is one of the best customer data management tools you can use. Use it to collect, organize, store, and analyze data.

You also minimize manual data entry by using a CRM with automations. Sync your phone contacts and collect leads from your website in real time. You may also be able to scan business cards and upload customer information directly to the platform.

4. Utilize integrations

While a CRM is one of the most valuable tools you can use to manage customer data, chances are that your business is also using other software and platforms to gather that data. Integrating your current tech stack with your CRM is a meaningful way to break down silos and get the most out of your customer data.

Here are a few types of integrations to consider that can help you with customer data management:

A CRM that works with the tools you use

At Nutshell, we offer a wide range of integration, including native, middleware, and custom integrations. Explore our integrations below or contact our team for information about a specific integration.

Explore our integrations Contact our team

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5. Improve your customer journey

Your customer profiles can help you improve your marketing campaigns. Use these profiles to deliver personalized customer experiences to increase customer engagement, satisfaction, and retention.

In addition, customer profiles can help you improve your email campaigns, advertising efforts, and website experience. What encourages your customers to open your emails? What advertising messages or visuals drive them to action? These are some of the questions that your customer profiles can help you answer.

Need more information about customer data management? These frequently asked questions just might have the answers you’re looking for.

How do you keep customer data clean?

Cleaning customer data requires removing inaccuracies, redundancies, and inconsistencies from your customer data. Having clean customer data is crucial for accurate insights and usable data. Your CRM or other tools may be able to automate certain data cleaning tasks.

How should I protect my customer data? 

There are many ways your company might choose to protect its customer data, including:

  • Only giving certain team members access to customer data
  • Utilizing encryption and zero trust policies
  • Ensuring your customer data management tools comply with privacy laws
  • Auditing data security on a regular basis

Deliver better customer experiences with Nutshell

Getting customer data management right is important for making better business decisions and driving sales. By following best practices like creating a data management strategy, training your sales team, and investing in the right tools, you can make customer data management simpler and maximize every opportunity.

Keep your customers happy, foster customer loyalty, and even reach new audiences with a customer data management strategy with Nutshell. Nutshell is an intuitive and affordable CRM that makes managing customer data a breeze. Try Nutshell free for 14 days!

Photo by Stephen Dawson on Unsplash

Try Nutshell free for 14 days!



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