A guide to customer data management software
Customer Data Management Software
What is customer data management software?
There are a variety of sources retailers can turn to in order to gain a more complete understanding of their customers. As the retail environment has evolved in tandem with the advancement of technology, so has the level of detail in the data being made available. Interactions with customers no longer simply begin and end with individual visits to establishments; retailers today have access to records of previous purchases made in-store, online store behavior, and even social media activity.
In an environment so data-rich, the volume of information retailers have at their disposal can begin to feel overwhelming at times. It can be difficult to see the bigger picture without getting bogged down by all of the details. This is where tools like customer data management software (or CDM software for short) come in.
Managing customer data is an important aspect of the retail industry. Thankfully, the process of figuring out the best way to do so can be expedited with the help of CDM software. Lexer is a leading provider of such software, specializing in hosting customer data platforms for retail businesses.
This kind of customer data management platform is equipped to sift through large amounts of customer data. CDM software can collect data from years prior, across multiple channels, then make this information more concise by removing duplicated or unnecessary data. The end product is a comprehensive report of the most important details, all of which are synthesized into one cohesive view of a customer.
The analyses which customer data platforms are capable of performing can contribute to more insightful perspectives on a customer-by-customer basis, while also revealing general trends in customer behavior as a collective. On an individual level, each customer is associated with traits that combine into a holistic view unique to them. A CDM platform can store an infinite amount of data on each and every customer in its system, allowing for indefinite additions to a customer’s history and updates to their profile. This equates to an opportunity to generate hundreds or thousands of customer profiles, as well as fill in the gaps of those already existing, in order to enrich the understanding of a retailer’s current audience base in a way that puts them in a better position to engage with said audience.
For how to get customer database software that’s best for your own business, the answer can vary from establishment to establishment.
Customer database software
More often than not, there isn’t really a “one size fits all” solution for any problem in the vast world of business. Different industries and the businesses categorized within them serve different purposes. Establishments from different industries tend to have their own unique needs, goals, target market, and so on, all of which usually can’t be achieved with a single strategy or data platform. This same idea can be applied to a company’s style or method of customer data management.
If there’s no one customer database software solution fit for every kind of business out there, then how do you determine what the best customer database software option is? The reality is that it’s difficult, maybe even impossible, to pinpoint an answer to this question. The conclusions businesses come to will typically be based on a multitude of factors surrounding what kind of data they need and what they plan to do with that data.
Lexer presents as one customer database example that’s specific to retail. At this time, Lexer’s customer data management platform is the only CDP built for retail, which has led to Lexer becoming the top choice of provider for some of the most iconic retail brand leaders. CDP providers like Lexer aim to give retailers access to organized data analytics, which contain pertinent insight that can be used to guide future planning and decision-making surrounding the customer experience.
This type of “big data” could be considered essential to the construction of a well-rounded customer database platform. When it comes to how to create a customer database with an orientation for retail, cross-channel activation stands out as being an especially helpful feature of more advanced or thorough customer database platforms. CDPs with this capability can derive data from multiple channels of engagement, which can play a major role in the development and implementation of an omnichannel marketing strategy.
Potentially, the ideal customer data management software solution would provide a simple platform on which retailers and their staff could view customer data in a centralized manner, gain insight from that data, and use their findings to make informed decisions. Customer database software is a tool retailers can use to further their understanding of their customers. It can propel them to a level where they find themselves in the position to accurately predict future behavior using intelligence metrics. Overall, this form of software can assist in putting customers first.
Online customer database
A person’s past purchases can say a lot about them as a customer, such as how frequently they shop, how much they spend, and of course, what they buy. The list of details and clues about a customer and their behavior is indefinite. This information can be especially useful when it doesn’t just come from a single retail establishment, but a variety of sources. If you only focus on customer patterns from one channel or source, your understanding of the customer tends to narrow accordingly. While the insight gained from this observation can still be very valuable, its application could also potentially be limited to only specific contexts.
When working with a small pool of data, there is typically risk associated with using those findings to make further assumptions or draw additional conclusions. On the topic of customer behavior, a small selection of data (say, from in-store purchases at one retailer) could possibly result in misguided decision-making. With the example of physical store visits and purchases, this is merely one aspect of a far more diverse transactional history.
A large portion of many customer profiles, especially in today’s world, consists of data derived via eCommerce. The convenience associated with online shopping has quickly boosted it to being one of the most preferred ways for customers to engage in the retail environment. This is why having an online customer database and collecting data based on digital activity is so important for understanding customers.
Many customer database management platforms include information sourced from website activity, email or loyalty engagement, and of course, eCommerce purchases. They provide much more insight into the overall view of a customer than perhaps some less advanced or simple customer database platforms that neglect online history. Considering the utility eCommerce adds to a customer’s profile, if you decide to opt for a free online customer database option, it may be wise to ensure it at least integrates this type of data into its platform.
eCommerce is one of many places you can explore in order to further fill the gaps in your customer profiles. Customer data platforms like Lexer have begun to shift their focus to customers rather than anonymous cookies. For example, Lexer Tag & Secure Forms enable this shifted focus by securely identifying users through PII so their behaviors, which can be complemented by eCommerce checkout information, can be synced to their customer profile on the platform.
It’s important to note the difference between CDP and CRM. CRM software, or customer relationship management software, doesn’t serve the same purpose as a customer data platform. In fact, customer relationship management is often used or represents one aspect of a larger CDP. Customer relationship management software is typically needed to capture human data, better known as personally identifiable information or PII, which was mentioned previously.
Customer relationship management is useful for the compiling of specific sales and service transactions, which mostly occur via email or call centers. Unlike a customer database platform, customer relationship management software isn’t designed to process additional data types like purchase history and general online behavior. Instead, CRM software plays a part in the work of a CDP by providing the specific kind of data it collects, which can then be integrated with data from other sources.
To put it simply, CRM has a more narrow focus in comparison to that of a CDP. Customer relationship management software is typically popular as a reference tool for one-on-one sales interactions. CRM exists to collect specific, extensive data tied to individual customers, which can be used to provide insight into a single customer for person-to-person situations. In the grand scheme of things, customer relationship management mainly contributes to individual customer profiles on a larger customer data platform.
CRM is most commonly used to inform marketing strategy at a more personal level. It provides insight, relevant to individual customers, into how the customer experience can be improved at a smaller scale. When compatible, CRM software can be a great feature of a CDP. The two aren’t interchangeable, but they can be related to each other in a variety of circumstances. A customer data platform often assists with the refinement of the data collected through customer relationship management software.