How to Effectively Manage Your Customer Data


What all successful businesses have in common is that they either deal in or have access to a vast amount of customer data, which has proven to be worth more than oil in this digital era. With such value comes great risks and responsibilities.

For data to be of any use to an organization, there must be a system in place for collecting, analyzing, quantifying, storing, and, most importantly, securing the data; collectively referred to as data management.

What is the Importance of Customer Data Management?

Some of the direct benefits of effective data management include more effective marketing campaigns, improved customer retention, and stronger customer relationships. None of these can be achieved without a working data management system.

One critical use of proper customer data management is to prevent data breaches. Failing to safeguard customer data can lead to severe damage to the organization. This damage can be both financial and reputational.

It is essential businesses dealing with data put proper steps in place to manage data. Below are some helpful tips on how to do this.

5 Best Practices for Effective Data Management

How to Effectively Manage Your Customer Data

1. Invest in Security

If you plan to gather customer information such as their addresses, phone numbers, or company financials, you must have a plan on how to keep them safe.

The cost of data breaches far outweighs any security measures you will have; the average cost for large organizations per breach is about $3 million, while small organizations suffer an average of $95,000 per breach.

Some of the steps you can take to ensure data safety include:

  • Employee education on best practices
  • Physical security such as locks and safes
  • Investing in a back-up system
  • Employing a team of experts in Information Security

2. Use Customer Database Software

Customer database software such as Customer Relationship Management (CRM) gives you control of your customer data.

With the ever increasing amounts of data streaming into organizations each hour, there is no way the information collected can be sorted, analysed and stored manually.

A CRM collects and sorts the collected information, presenting it in a way that is easy to understand. Such systematic management of data ensures proper tracking, enabling value to be delivered quickly.

In case of a data breach, it is easier to spot and contain the source than if the data was unmanaged.

3. Back up your Customer Data

The loss of an organization’s data is just as devastating a breach. Imagine losing customer records, employee records, or even critical financial documents.

According to a study on small businesses, 60% of enterprises that lose their data are likely to close down within six months.

Backing data up also ensures that in case there is an issue with the system, information can still be accessed and business conducted as usual.

It is advisable to have both an on-site and off-site back-up facility to protect data from damage even in case of incidences such as fires.

4. Collect your Data Strategically

In most organizations, only about 25% of the collected information ends up being utilized for the benefit of the company. The remaining 75%, known as dark data, ends up taking up space and unnecessarily increasing the risk of a breach.

Businesses should, therefore, come up with a way of determining the information that is of use to them to focus resources in its collection. With a smaller volume of data to deal with, it will be easier to manage and secure it from potential attackers.

Data collection should also be conducted ethically to prevent damages in terms of legal fallbacks and the loss of reputation. You should have consent for all the information you collect through a privacy policy and agreement.

5. Clean up your Data

The strategic collection of data requires active measures to ensure the replacement of outdated information. Information such as customer addresses and phone numbers are bound to change with time, weighing down the database with useless data.

Cleaning up data saves costs by ensuring only needed information is stored, and the rest discarded carefully. Some of the measures an organization can take to clean their data include regular data audits to remove unnecessary information, centralizing customer data across departments and having a consistent data format across the company.

Data that has been deemed useless to the organization should be disposed of properly to prevent access by unauthorized parties. Hiring the services of data destruction companies will ensure experts handle your data disposal and transportation needs.

Below are some of the methods used to ensure breaches due to poor data destruction do not occur:

  • Data shredding or degaussing – This method uses a magnetic media and degauss to ensure data is completely destroyed.
  • Secure transportation – Secure and regular collection from your business facility will ensure that all information is transported safely to the required location.
  • Erasure– Erasure of data from compromised devices keeps data restricted to only authorized parties.
  • Certificate of destruction and video- A confirmation of the destruction of data certificate provides proof that can be used during auditing and following up on a data breach.

Final Thoughts

Customer data provides invaluable insights that, if applied in the management of the business, can give it a significant competitive advantage.

Organizations should, therefore, pay more mind to their data, handling it strategically to get the most value while spending the least, and to avoid the costly consequences of poor customer data management.

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Author Bio: Michael Mulcahy, Business Development Manager for Wisetek, who are global leaders in IT Asset Disposition, Data Destruction & IT Reuse.