Businesses rely on data to understand their internal and external environments. From supply chain data to product data, the data that companies collect drive their decision-making and problem-solving. Of all the different types of data businesses use, 94% of business leaders say customer data is critical.
So, it’s no surprise that companies collect and use customer data. The challenge they have to address is how to do so effectively. Companies that use this data must protect customers’ privacy. Adhering to all applicable data security regulations is also critical. But how?
If you use consumer data in your business, apply these tips on collecting, storing, and managing it.
7 Tips for Handling Customer Data
1. Only Collect Essential Data
Collecting as much data as possible when using consumer data is tempting. That’s a mistake, though.
Not only will collecting excess data overload your systems, but it also opens you up to risk. You could collect data your customers don’t want you to have, leading to negative press. Only collect the data that you need to achieve your business goals.
Review the types of data you collect, and connect each to a use case or purpose. If there’s any data you’re currently collecting that you could operate the same without, stop collecting it. Stick to collecting data that someone in your organization uses for a specific purpose.
2. Eliminate Data Silos
Data silos occur when some of the data you collect is only accessible to one department or group within your company. Even if other departments would benefit from that data, they can’t use it. The data is locked away, and the group with access can’t efficiently share it with others.
When you have data silos, each department in your company works with different, limited data sets. They can’t get the most out of all your data, because they can’t access it all. So there’s no data collaboration — only silo after silo.
You need to eliminate these data silos to use your consumer data efficiently. One option is to integrate all your data sources into a central location. Alternatively, you can extend access to each data set to other departments, which may open up new issues.
3. Limit Access to Sensitive Data
Along those lines, you must restrict access to the sensitive consumer data you collect and store. For example, employees should only have access to the customer information needed to complete their roles. Adjust permissions accordingly.
Limiting access to sensitive data will reduce your risk of data breaches and other data security concerns. Some different tiers of data access permissions you may want to give employees are:
- No access: The employee does not have access to this data.
- View only: The employee can only access and view the data, not modify it.
- Edit: The employee can view and modify the data.
- Administrator: The employee has full access to the data and can adjust the data and permissions for other users.
Grant employees the lowest level of access necessary to fulfill their responsibilities. Review data access permissions regularly to update them if needs have changed.
4. Utilize Multiple Data Sources
It’s not enough to collect customer data from a single source. For example, if you only collect consumer purchasing data from your CRM, you’re missing out on other essential data.
Consider all the systems or methods you can use to collect customer data. These include your website or app, emails, social media channels, customer support, and customer feedback. These data sources may provide valuable data for analysis.
5. Ensure Data Accuracy
The data you collect is only valuable to your business if it’s accurate. Some data points are inaccurate when you order them. Others become inaccurate later because the information changes — data decay. To ensure you’re working with reliable data, you must manage both types of data inaccuracy.
Address data inaccuracy at the collection point with a strong data governance strategy. For example, for data decay, regularly review your data and dump data about customers who haven’t interacted with your company recently (e.g., within the last year).
The purpose of this policy is transparency and adherence to data privacy regulations. Use specific terms when possible so your policy is as straightforward as possible. Your policy should also include instructions on how users can opt out of your data collection. Giving users the ability to opt-out is now required in many data regulations.
7. Invest in Data Management Software
Spreadsheets are not efficient for storing and managing the data you collect. Likewise, many separate databases will prevent you from effectively managing your data. The solution is data management software.
This software connects to your data sources and integrates them to give you a single source of truth. Using data management software will ensure your data is accessible, but still secure. Use this software to house all your data and protect it.
There are many different software solutions including data management tools, so shop around. The benefits of the software will soon surpass the upfront costs of implementation.
Customer Data Management Made Simple
The right tools make collecting, organizing, and managing customer data much easier. Data management software, like a customer data platform, will revolutionize your use of this data. Stay ahead of the competition by implementing one of these solutions.
If you have any questions about consumer data or data management, contact Live Earth to schedule a call.