Your business thrives when you use customer data to make decisions. Data serves as a map and an energy source, allowing you to change the way you create marketing strategies and communicate with your target customers.
Unfortunately, you likely have unknown issues occurring within your customer database. It’s okay! Most do, and we're here to help you learn what issues to look for and how to fix them.
Bad data costs businesses millions of dollars each year, so it’s important to focus on fixing those problems now so that you can efficiently grow and scale your business.
As you rely on data to make decisions, you’ll need to learn how to effectively manage your customer database. There are a number of common problems, but luckily, there are solutions that you can easily implement once you know about them!
In today’s blog post, you’ll learn why you need to fix kinks in your customer database, some common problems you might be dealing with, and solutions to help improve the way you manage everything.
Let’s get to it!
Why Do You Need to Fix Problems In Your Customer Database?
We all (hopefully, by now!) know how important data is to running and growing your business. Whenever customers visit and interact with your business, you gain valuable data and insights so that you can really personalize their marketing and business experiences. But especially over time, your data can become stale, inaccurate, and less valuable as a result of not maintaining and updating it.
When you ignore key problems, you make your business strategy weaker. Don’t do this! Since marketers and businesses rely so heavily on data analytics, you need to focus on fixing any problems right away.
Forbes shares that businesses lose trillions in revenue annually due to incomplete or inaccurate data.
That said, the repercussions of neglecting your customer database extend beyond revenue loss. According to a report by Gartner, businesses with inaccurate data can expect a 15% reduction in overall customer satisfaction rates by the end of 2023. Also, keep in mind that incomplete data hampers effective personalization efforts, with 83% of consumers expressing a preference for personalized experiences, as revealed by a study conducted by Epsilon. The erosion of customer trust is another consequence, with 91% of consumers admitting they are more likely to trust companies with accurate, transparent, and updated information about their products and services, according to a survey by Accenture.
Needless to say, customer expectations are soaring! So, to create impactful, successful marketing plans, you need accurate data. Learning how to manage your customer database is going to make a world of difference!
Now that you understand why it’s important, let’s dive into some of the key issues you might be facing.
8 Key Customer Database Problems
First up, let’s determine what issues you may be dealing with, we’ll get into some easy solutions so that you can get to work identifying and fixing these problems.
#1: Stale, Outdated Information
Here’s the thing: information changes a lot. People’s addresses, emails, phone numbers, jobs, and interests all change frequently. While this is awesome for a lot of people’s individual lives, it’s NOT so awesome for your business data. Your customer information becomes outdated faster than ever before.
Another huge issue with stale, out-of-date information is age! Customer ages consistently change, but as we enter such information, we usually forget to go in and update it each year, so it becomes inaccurate.
A quick solution to this problem is creating two data elements: one to convert ages to birth years when you first add data, and another to create a value that reflects the current year minus birth year. You’ll never need to update it again because it takes care of itself.
Incomplete Data
There are often lots of gaps in customer data. Whether these gaps come from customer browser settings or other challenges connecting different behaviors and patterns, you might have missing pieces of data working against your marketing strategy.
To fix these problems, micro-segment your audience whenever possible to avoid targeting large audiences with missing information and gaps. You can personalize your marketing to what you do know and avoid what’s missing.
You can also work to actively fill in information gaps on your own by doing outside research. For instance, if your data list is missing email addresses, you might check the website for a particular business on your list to see if email addresses for their employees are listed.
Either way, you’ll have a more holistic view of your customers and a stronger, tailored marketing strategy.
#3: Privacy Law Compliance Issues
Changes in data laws, like the GDPR in Europe and CCPA in California, mean that data privacy is incredibly important. GDPR stands for General Data Protection Legislation, and it governs the way in which we can use, process, and store personal data. The California Consumer Privacy Act (CCPA) gives Californians more control over how their personal data is collected, used, and sold. One of the biggest challenges in learning how to manage a customer database is protecting data privacy.
#4: Duplicate Records
Duplicate information clutters databases, leading to confusion and inefficiency. By regularly scanning and eliminating duplicate records from your customer database, you help to ensure a streamlined and accurate customer list.
#5: Lack of Data Standardization
Inconsistencies in data formats and structures can hinder effective analysis. This is why it’s so important to implement data standardization protocols for your company to ensure uniformity. This will not only help to facilitate seamless analysis but also better, stronger decision-making.
#6: Failure to Leverage Advanced Analytics
Basic data analysis may fall short, but this is where most businesses stop collecting information. Embrace advanced analytics and start to glean deeper insights, enabling more informed business decisions and targeted marketing for your business.
#7: Limited Integration with External Systems
Isolated databases limit the potential for holistic customer understanding. Integrate your database with external systems where possible and you will provide your organization a much more comprehensive view of customer interactions across various touch points. For example, you can consider consolidating contact information from various sources into a single CRM to create a unified and reliable record for each contact. From there, you must ensure accurate two-way data syncing with key applications like email marketing platforms, automation tools, or customer support software to enhance business operations.
#8: Insufficient Data Security Measures
In an era of increasing cyber threats, inadequate data security is a severe risk. Bolster your database security with robust encryption, regular security audits, and employee training on data protection best practices.
How to Manage & Improve Your Customer Database
Now that we’ve covered the problems, let’s talk more about their solutions! First, focus on streamlining your information. This will give you a clearer view of your customers across all of their devices and buying opportunities. You can delete any duplicate information and fill in gaps as you notice them.
Then, check in regularly to see if your information is still accurate, timely, and relevant. A great way to do this is through list enhancement services like those offered by Exact Data.
You can also supplement and enrich your data with third-party data to help fill in any missing pieces or fields, as well as update and verify specific pieces of information.
This helps you keep track of life events that change how you engage with your customers, so you can keep segmenting and personalizing. The more personal your efforts, the better your results will be!
You might also consider implementing advanced segmentation techniques to categorize your customers based on their behaviors, preferences, and purchase history. This granular approach allows you to tailor your marketing messages, ensuring that each customer receives content that resonates with their specific needs and interests.
Another valuable tactic is leveraging automation tools to streamline database maintenance processes. Automation not only saves time but also reduces the risk of human error, ensuring that your data remains consistently accurate and up-to-date.
Explore tools that offer features like automated data cleansing, duplicate detection, and real-time updates. By incorporating automation into your data management routine, you free up resources to focus on strategic decision-making and creative aspects of your marketing campaigns.
Building a strong marketing plan and growing your business means you need to rely on accurate, up-to-date, and complete customer information. Regularly checking your data for errors is key to making the most of your information!
With a few preventative measures and an awareness of how to manage your customer database, you’re going to find success with your data! You’ll be able to reduce low quality data and focus on what’s most effective. Plus, make a whole lot more money in the end AND make a difference when you sell your products and services.
If you need additional help optimizing your database, or if you want to learn more about our data services such as data enhancement, data de-duplication, or data appending services, give us a call at 877.440.3282, we’re happy to help.
