With the high-profile data breaches that perforated much of the past year, businesses across the globe have clamped down on their security infrastructure to ensure that their customer data management systems and processes stand resolute against emerging cyber threats.
This isn’t surprising given the fallout from a data breach can be significant, with an average cost of $4.36 million in Australia – not to mention the legal implications, impact on reputation and potential loss of customers.
So what can organisations do to ensure effective and secure customer data management? Here are 6 strategies to help you satisfy customers’ concerns, comply with regulations, build brand trust and ensure ongoing business viability.
1. Start with the ‘why’
The first step in effective customer data management is understanding why it is important. Customer data is a valuable asset that can provide useful insights to drive business growth and enhance the customer experience. However, it also presents risks if not properly managed. By taking command of your customer data, you’re better positioned to curtail security vulnerabilities, such as data breaches and unauthorised access, as well as leverage insights to seize new business opportunities.
It’s also important to understand why you’re collecting particular data, including the specific business problem you’re trying to solve. For example, you might use interaction and behavioural analytics to address customer pain points, reduce churn and improve retention. Starting with the ‘why’ will help you create a tangible customer data management strategy grounded in real-world use cases. By clearly articulating this to leadership, you’ll be more likely to achieve buy-in, especially in the context of mitigating modern data threats.
2. Create a customer data management strategy
Every business is unique, so your data management strategy should align with your organisation’s goals and risk appetite. A well-crafted data management strategy ensures that your business maximises the value of customer data while mitigating risks associated with modern threats. First and foremost, it should define the types of customer data your organisation collects, processes and stores, tailored to your specific business needs.
A well-defined strategy should also incorporate provisions for adaptability, allowing it to evolve in response to changing data regulations and emerging threats. This way, you can proactively address potential security vulnerabilities to protect your customer data.
3. Have a robust data governance framework
A data governance framework is crucial for any organisation that values integrity, security and effective customer data management. When well prepared, it provides a clear set of guidelines, policies and responsibilities that govern the entire lifecycle of data from its collection to disposal. It also ensures that data is accurate, consistent and accessible to authorised personnel, while stipulating controls for minimising the risk of unauthorised access, compliance violations and leakage of personally identifiable information (PII).
A robust framework includes elements such as clear data ownership, delineation of roles and responsibilities, data classification based on sensitivity, data access controls, and regular audits to monitor adherence to established protocols. This also pertains to the archiving and disposing of sensitive information when it’s not required, and putting in place appropriate rules that comply with industry regulations. The framework should also outline procedures for data quality assurance and data sharing across departments. This, in turn, should empower organisations to make informed decisions, enhance customer trust, and work off a business-specific playbook for successful customer data management.
4. Conduct targeted data collection
As noted earlier, it’s important to understand why you’re collecting each piece of data. By gathering specific, relevant customer data, your company can make informed decisions and offer more personalised experiences to your customers. Targeted data collection involves identifying the precise types of information that align with your organisation’s goals and customer needs while avoiding the collection of unnecessary data. This approach not only reduces the risk of data breaches but also enhances customer trust, as individuals feel more comfortable sharing data they know is relevant to you and beneficial for them to share.
5. Avoid departmental silos
Customer data management typically serves as a bridge between departments. By centralising and sharing customer data across different teams, businesses can break down barriers to collaboration and achieve a more holistic view of their customers.
What does this look like? Sharing information enables marketing, sales, customer support and other departments to deliver more consistent and personalised experiences across the customer lifecycle. Customer interactions become more coherent as information flows freely, fostering better communication and alignment. Ultimately, it reduces inefficiencies and empowers teams to make informed decisions based on a comprehensive understanding of customer preferences and behaviours.
This collaborative approach not only enhances internal operations but also enhances the organisation’s ability to respond to customer needs promptly, therefore contributing to increased customer satisfaction and loyalty.
7. Inspire a culture of data security
Secure customer data management requires a top-down commitment to data security in your organisation. However, safeguarding sensitive information must also be a shared responsibility across all levels of an organisation. This requires an embedded culture of data security.
Employee training is a pivotal component of building this culture. This will equip staff with the knowledge and skills to recognise potential security risks, handle data responsibly and respond effectively to emerging threats. By providing employees with the tools to make informed decisions and instilling a sense of ownership over data security, organisations can fortify their defences, mitigate vulnerabilities and nurture a culture where data protection is integral to every action and decision.
Effective customer data management is essential in the face of modern threats. It helps businesses comprehensively resolve challenges from end to end, creating a value chain that can be echoed in other projects or departments in your organisation.
At Optivia, we help you optimise your customer management resources to get the most value for and from your customers. If you want the power to preempt customer interactions, identify potential churn behaviour, automate contact responses and reduce your customer call burden, contact us today.