Managing customer data is a hot topic. According to one report, consumer data is now the world’s most valuable resource—“the oil of the digital era”—and needs to be treated and safeguarded as such. Failing to do so can result in serious damage.
Consider the ride-hailing service Uber. The company experienced a data breach in 2016 when hackers accessed the private data of around 57 million people, including 600,000 driver’s license numbers. The incident cost Uber $148 million in the settlement alone. It also caused major damage to Uber’s reputation, particularly after the company attempted to hide the breach from the public.
This is not an isolated incident. Other companies, such as Yahoo, Under Armour, Equifax, and eBay, have been affected by data breaches in recent years. Customer usernames, email addresses, hashed passwords, and telephone numbers were all taken during the breaches, affecting company profits and customer trust.
Conscientious control of large volumes of customer data doesn’t need to be an impossible challenge. With just a little forethought, your sales team and company can start being smart data owners and avoid losing or compromising valuable information. Here’s a list of eight ways you can effectively manage your customer data:
- Take security seriously.
- Gather information ethically.
- Decide what you really need.
- Invest in smart CRM storage.
- Back up your data.
- Clean up your data.
- Train your team.
- Think about access.
1. Take security seriously.
When you gather personal data about clients, from their home phone numbers and addresses to details about their company financials, you need to have a plan to keep that information safe. This helps build customer trust and can save your business from a big headache down the road.
What are some tangible steps you can take to ensure that your customer data is secure:
- Invest in a CRM.
- Invest in a backup system.
- Invest in customer-data training for your employees.
We’ll go into more detail on these below. But if you’re doubting the need for these measures, consider the scandal every time a major brand has a security breach. It almost always involves a drop in customer confidence and a hit to profits. In the EU, there’s also a threat of fines. Investing in the security of your data is an investment in your company’s future, which is money well spent.
2. Gather information ethically.
Facebook received a lot of heat after it was discovered in March 2018 that data firm Cambridge Analytica had harvested the information of 50 million Facebook users without their knowledge. People were outraged, calling for an investigation of the social media company. Confidence in Facebook decreased significantly.
Trust is a major component of building relationships with your leads and clients. The best way to build trust is to be transparent about your data-collection policies. Keeping clients in the dark about what data you’re collecting is, at best, a breach of trust; at worst, it’s unethical. And if clients believe you’ve betrayed them, you may lose their confidence and their business.
Here are a few ways to ethically gain customer data:
- Provide a straightforward survey asking for specific information.
- Allow customers to opt in to share valuable information, such as through a dialogue box.
With all of these suggestions, keep the customer’s privacy in mind at all times. Customers will value your transparency.
3. Decide what you really need.
Too much data (also known as data saturation) can overwhelm your company with information and hinder decision-making. Hackers can also gain access to data you shouldn’t necessarily have. On top of that, customer data is often not even utilized. In fact, “between 60% and 73% of all data within a company goes unused for analytics.”
Determining what data to collect requires strategic thinking. The data you gain from your customer needs a purpose. Sit down and decide what information you actually need. To get you thinking strategically, here are some questions to answer:
- How does the data align with your overall company goals?
- How will each piece of data be analyzed?
- How will the data eventually contribute to the customer experience?
If you’re collecting information about customers using marketing-automation software, think about the data you really use. For example, do you need both the customer’s email address and phone number? Don’t collect data just because you can.
Adopting a systematic, transparent approach to gathering data helps cut down on unnecessary collection. If you obtain only the information that your business really needs to close the sale, you’ll be able to streamline the processes. A cleaner sales process can mean lower overhead and a boost to your overall financials.
4. Invest in smart CRM storage.
Gone are the days when a spreadsheet was the best method for storing customer data. Businesses that take data seriously will store their customer information in a customer relationship management (CRM) tool that’s also GDPR compliant. These tools are designed to make organization and collection of important intel safe and easy. They can also provide segmented customer insights based on the data, which is a great way to identify opportunities for improvement.
Consider Expensify, a San Francisco-based financial-services company that offers online expense-management services. The company began using Zendesk Sell to store their customers’ information and make sense of the large volume and variety of data. Sell gathered essential pipeline data and the information highlighted excellent opportunities for improvement in the Expensify sales process.
And having a CRM has even more benefits:
- All of your data is in one place.
- You can track customer interactions.
- You have a unified view of the customer.
With Zendesk Sell, you can customize many of your data-entry fields to get an accurate snapshot of the information you need most. It’s a tool that has responsible data ownership in mind but also has other benefits, such as organizing data, scaling your company, automating everyday tasks, and gaining additional insights from data through analytics.
5. Back up your data.
Even though the chances of losing data are high, 58% of SMBs are not prepared for data loss. This statistic is even more alarming when you consider that “60% of SMBs that lose their data will shut down within 6 months.” Data backup and a recovery plan are essential.
You should have a well-guarded backup of all your customer data in case there’s an issue with your system. If you’re careful about finding a secure fail-safe, then you’ll be able to protect your customers and your business.
Here are some questions to consider when making your data-backup plan:
- What is your data-backup budget?
- What type of backup plan is best for your business?
- Where will you store your backups?
- What is your recovery plan?
The right backup keeps customer data safe and makes your business is a reliable partner. You’ll also need to test your backup system to make sure everything is working properly.
6. Clean up your customer data.
Customer data can quickly become outdated. According to one source, up to 25% of the average B2B marketer’s database is inaccurate, affecting costs and customer confidence. Along with having a data-backup plan, plan to clean up your data.
What does that mean? Validate and update information such as email addresses, phone numbers, and home addresses. Remove duplicates, and delete contacts who are wasting your resources. This kind of data cleansing enhances the value of your current data.
There are several things to consider with data cleansing:
- Perform a data audit. What information do you currently have?
- Avoid silos. Centralize your customer data across departments.
- Make sure that the company data format is consistent.
There are also many automated data-validation tools that can be integrated with your CRM, making it easier than ever to ensure that your data is up to date.
Data cleansing helps you avoid mistakes and ensures that you have high-quality, accurate information to analyze about your customers. Think of data cleansing as part of your quality control.
7. Train your team.
Providing customer-data training to your employees can save money over the long term. London-based marketing agency Bartle Bogle Hegarty (BBH) learned this lesson the hard way. A BBH team member deleted more than 1,000 files when trying to clean up the company’s data. The data was only partially recovered.
Having big ideas about how to collect and protect customer data doesn’t mean much if your team can’t put them into action. Invest time in training and education so your employees know how to handle and interpret data. Creating a data-driven culture benefits your business in the long run.
This is especially true if your business has a BYOD policy that allows employees to do work on their personal electronic devices. You’ll need specific policies in place to protect sensitive information. Make sure those policies are going to be easy for your team to follow, but comprehensive enough to be effective.
8. Think about access.
Once you’ve laid a strong foundation for how to gather and protect data across your entire company, the next step within the business is to find a way to make that intel available when you need it.
This is where your CRM choice starts to make a big impact on your operations. You want to be able to securely access data anytime, anywhere. Your CRM is a tool to securely take your data with you wherever you go.
In addition to helping you avoid a major data crisis, customer-data management helps you enhance your customers’ experience. Data gives customer insights that allow you to analyze your customer segments. You can create personalized recommendations based on this information.
Collect and manage customer data responsibly (and strategically) and you will add significant value to your customers and your company.