What is Customer Master Data Management?
Master data management is an integral part of successful business operations. This technologically enabled process involves business and IT professionals working together to make sure the company’s data assets are in top shape. This includes accuracy, efficiency, and uniformity.
Customer master data management can help you get a single 360-degree view of each customer, centralize all the available information, and design an improved way to get the customer down the sales funnel.
This type of master data management (MDM) allows you to gain valuable insight into the way your customers think and what their pain points are. More often than not, customer data is spread across multiple systems, such as CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning). Customer data management brings the information together to achieve sales and marketing goals.
Customer Master Data Management: Definition
Customer data is a highly valuable type of data that leading businesses base their sales and marketing campaigns on. The quality of customer records is the backbone of many successful business decisions.
Customer data includes various types of information include:
- Sales data
- Website behavioral data
- In-store behavioral data
- Communication across various touchpoints
- Customer feedback
- And much more
Customer data can prove to be highly valuable if managed properly. Without a customer data platform or other means of data management, this information can slip through the cracks and lose its value.
That’s where customer master data management comes in.
Customer data management involves gathering, sorting, and analyzing all types of customer-related information. Doing this properly can put your company above the competition.
Businesses use a variety of tools to implement master data management. From customer data platforms to enhanced customer relationship management apps, companies all over the world are trying to keep tabs on customer information.
Effective master data management solutions can have a variety of benefits. You can only reap them all if you have a proper system set up.
Benefits of Customer Data Management
Let’s take a look at what you can gain by implementing an effective customer master data model.
Personalization is one of the major pillars of improved customer experience. In fact, 20% of consumers are willing to pay more for a more personal approach. Marketing and sales teams are working hard to add personalization to their strategies without incurring high campaign costs.
High-quality customer data is a step toward improving personalization. You can use existing customer records to make predictions about future behavior, thus personalizing your approach in the most efficient manner possible.
From customer interactions to their online behavior, each piece of data holds an endless amount of useful material for further personalization efforts. Data quality and data accuracy are key to improved personalization.
Lower Marketing Costs
Regardless of the industry you are in, you are likely to be facing severe competition. Coming up with something truly unique requires a lot of time and substantial investments. To help your company stand out from the crowd, you can implement a successful marketing strategy.
Unfortunately, highly sophisticated marketing efforts are expensive. That’s why small and midsize businesses are constantly looking for ways to cut costs.
One of the ways to do it is to focus on customer data quality and quantity. Customer MDM can help you gather, analyze, and implement high-quality data. Doing this can cut marketing costs by:
- Connecting with customers at the right stages of the sales funnel.
- Speeding up the customer journey.
- Not wasting time on promoting your products and services to low-potential customers.
- Getting a better understanding of customer accounts.
- Preventing unnecessary paid search marketing expenses.
Knowing as much as you can about your target audience simplifies both sales and marketing efforts, thus helping you cut costs and improve business processes.
Working with customer data can be time-consuming. If it’s not handled properly, it could take days or even weeks to find and analyze relevant information. This can slow down the process of making business decisions.
While you are spending time on data gathering, the competition is already doing data integration. This puts you in an unfortunate position of losing valuable market share.
Data stewardship and data governance efforts can be useless without a strong MDM strategy. When you implement such a strategy and start using a reliable MDM solution, it can save you a substantial amount of time. Meanwhile, your sales and marketing teams can focus on core tasks that improve your company’s bottom line.
For example, when it comes to email marketing, low-quality data could force you to send messages to outdated email addresses. As a result, you would strain your marketing budget while failing to achieve the desired goals.
A simple tool like an email validator that automatically checks your email address data can help you avoid the associated problem. Without a valid customer data management system, you can easily miss important customer data tools.
Customer MDM can also help you avoid duplicate data problems. This can save your team even more time.
Customer MDM can also help you build meaningful relationships with your clients and customers. The more you learn about them, the more benefits you can reap from data integration into your customer retention system.
Building a strong relationship with your audience is highly important to the success of your business operations. Having a system for data collection and analysis allows you to wield information when driving your customers down the sales funnel.
When you manage to connect with your audience across various touchpoints, you don’t just drive the sale through. You increase customer satisfaction rates and keep customers with your firm. Since 80% of sales come from 20% of existing customers, meaningful relationships become the driving force behind your business.
Implementing customer master data management is the key to staying compliant with rules and regulations. Knowing which data can be used for which purposes is vital to following the law.
For example, in some industries, you need to take advantage of specific tools in order to protect your client’s sensitive data. Customer MDM takes care of these issues to ensure compliance.
Many companies have a less-than-satisfactory understanding of how to gather and maintain customer data. This leads to compliance problems. With a management system in place, it’s easy to avoid them.
Better Customer Segmentation
Customer segmentation can help you make highly personalized and precisely crafted offers to your audience. This is only possible if you have sufficient information about all customer groups. That’s where master data management comes in.
For example, you need to segment your audience to send personalized email offers. With too little information about the customers’ preferences and behavior, it’s easy to make the wrong move.
As a result, your email will end up in the wrong inbox or you could send the same email twice to the same address. Eventually, you’ll spend extra money, dropping the marketing ROI.
The more core data you can collect about your audience, the easier it becomes to segment it, thus improving your sales and marketing efforts tremendously. This also helps you bring more value to the customers.
Effective Decision Making
When you have to make a decision about business operations, you need access to all types of data quickly. Without the right approach to data management, you could overlook critical information and make a poorly-supported decision.
While you may have plenty of data available, it’s only half the job. To help with business needs, it must be readily available for quick decisions.
With customer master data management, you can have master records analyzed and available when you need them the most.
Customer master data management is a comprehensive approach to handling customer data for your business. Since the value of high-quality data is impossible to ignore, finding an effective way of managing it is vital to the success of any company.
With customer MDM, you have an opportunity to keep your company ahead of the competition while helping it become the industry leader.