5 Customer Data Management Dangers and how to Improve Your Overall Policy

Did you know that 92.3% of companies use data to collect information about customers and sales prospects?

However, if collected improperly or incompletely, you can wind up in some pretty big pitfalls. Here are five customer data management dangers that can happen when you incorrectly store, manage and process data. Plus, we will go over how to improve your overall policy.

5 Customer Data Dangers

If you regularly handle large amounts of customer data, know that things like inconsistent formatting and outdated data can cause serious issues in your business. However, those are just the tip of the iceberg. Here are five customer data dangers and how to avoid them.

1. Inconsistent formatting.

Formatting is how companies organize and classify the data they collect. However, when companies don’t develop consistent formatting guidelines things can quickly get hairy.


If data formatting isn’t standardized, sifting through can become confusing. On top of that, it can make pulling out different pieces of information, such as names and addresses, difficult.

Another issue is that when your data isn’t consistently formatted, you can cause hiccups with data automation. Since the formatting isn’t standardized, AI tools cannot pick up and properly sort data.

This can result in slowdowns and hold-ups in the data processing. In fact, if the formatting problems are severe enough, it might even become impossible to pull information out of your data sets!

2. Inaccurate and outdated information.

Another major customer data management (or CDM) problem businesses face is dealing with outdated and inaccurate information. Experts estimate that most people will have an average of 126 email addresses in their lifetime. That’s a lot of changing data, and it only measures one metric people regularly update!

When businesses don’t update customer data, they don’t have a complete picture of their customer profiles. Not only can this affect data-driven marketing decisions, but it can lead to dead leads.

When companies have inaccurate information in their records, it makes it difficult for them to reach consumers. Marketing emails can bounce, and once again the company can find itself dealing with missed opportunities.

Additionally, inaccurate information can lead to privacy concerns. When communicating sensitive information across an outdated email or phone, private data gets easily breached.

Data gets outdated quickly, which means it’s up to businesses to stay savvy with their customer information. That way, they can avoid running into marketing and outreach issues.

3. Privacy concerns.

One of the biggest concerns in a company is data privacy. When it comes to customer data management, many businesses don’t have the proper security measures.

When businesses don’t take the right steps to protect their customers’ data, they convey to potential buyers that their privacy doesn’t matter. This loses customer trust and makes them less likely to work with that particular business.

Source: Salesforce

On top of that, this can lead to reputational damage, legal issues and financial sanctions. Considering the fact that around 59% of consumers feel their privacy is at risk, this is a major issue for businesses to keep in mind.

4. Multiple data storage channels.

Many businesses receive customer data across multiple channels. Some of that data might come from email campaigns while others get picked up through online advertisements.

The trouble is, when you have customer data feeding into your business through multiple channels, it’s easy for things to get lost.

Many businesses make the mistake of not unifying that data and storing it in one place. Instead, they leave it scattered across multiple storage channels.

The result is that businesses have trouble sifting through information to find key data points. Not only can this lead to wasted time, but it can lead to lost sales prospects and miscommunication.

5. Duplicate information.

Duplicate information is one of the most frequent issues affecting a company. This often happens because companies have multiple ways of collecting consumer data.

When multiple channels pick up consumer information they can easily create duplicate records. When customers change information, automation tools can create entirely new profiles for that particular individual.

Duplicate data can hurt business performance because it causes delays and hold-ups. It can also damage the company’s reputation, as duplicate data can lead to client frustrations.

Receiving the same information repeatedly is an easy way to frustrate potential customers. The business may seem unreliable and disorganized. Clean up duplicate records in your CDM system to avoid this. That way, you maintain client satisfaction and avoid frustration and communication misses.

How to Improve Your Customer Data Management Policy

If you’ve fallen into one of these CDM pitfalls, don’t panic. There are a few ways that you can improve your customer data management policy to get past these issues.

One thing you can do is leverage website monitoring. When you track website changes you can track metrics such as availability and performance. Plus, you can minimize downtime and ensure a smooth user experience. All these factors lead to more accurate data capture.

Another way to improve your policy is to improve your data collection method by creating a personalized user experience. Personalizing your experience can help you ensure that customers regularly update their data so that your records stay organized.

Businesses can also boost their CDM policies by prioritizing security. Having secure data can avoid legal and financial troubles down the road and boost trust with customers.

You can also practice segmenting customer data. This helps to classify data and avoid issues such as data duplicates.

Finally, a good practice is to make regular cleaning of your customer data a priority. Regularly cleaning up your records can help remove inaccurate and outdated information and ensure that you don’t run into miscommunications.

By implementing these policy changes, you can help avoid or fully prevent CDM dangers. That way, you can continue to see success in your business’ marketing and sales operations.

Peter Bray is an AI practitioner with a keen interest in competitive intelligence and web change monitoring. He is the CEO of Fluxguard based in Portland, Ore.

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