Top 5 Challenges in Customer Data Management


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For business enterprises to take advantage of the increasingly mobile and digitally perceptive customer base that anticipates personalized and dynamic customer experience, digital innovation is extremely necessary. One of the obvious requirements of business enterprises to support all the processes is ensuring that a good customer data management exists. Marketers can be highly benefited by having accurate customer data. But if the enterprise does not possess the requisite resources to deal with such high amounts of data, it can prove very tough for the enterprise to acquire, assemble and analyze the data.

According to a survey conducted by Oracle, close to 93% of executives in business enterprises believe that an average of 14% of annual revenue is being lost as they do not possess the ability to act on the customer data that they possess. Today, business enterprises have a goldmine of valuable customer information which, if used correctly, can help the enterprise to serve individual customers effectively. Business enterprises focusing on data first strategy can significantly increase ancillary revenue, cut costs and achieve sustainable loyalty from their top customers.

But in this endeavor business enterprises face numerous challenges:

  1. Large Volume of Data:

    Business enterprises need to have the ability to process large volumes of customer data so that critical information is made available to the decision makers as and when they need it. Enterprises continually face the challenge of collecting, managing and value creation from the data. In addition to this, the increasing number of devices and platforms and the continually decreasing cost of storage have compounded the challenge of the management and removal of old data. The sheer amount of structured and unstructured data that is being collected along with multiple data collection channels has transformed customer data management into an important, yet elusive goal.

  1. Charting out the Customer Journey:

    Business enterprises must be fully equipped with real time customer data, touch points for interaction, behavioral stages, sentiment, cross-team resourcing and many more that enables the charting of customer journey map that can be helpful in providing the best customer experience. But even in the current digital age, it is tough to track the process of how customers move from brand awareness to conversion. Customers might first be introduced to a brand on a billboard, check it out on their desktop and finally make a purchase on their mobile device.

    As a result, business enterprises are not able to integrate data from online and offline channels. According to eMarketer, not more than 30% of business enterprises were collecting information at the point of sale and only 34% were utilizing online-generated codes for tracking offline purchases. For customer journey to truly be a part of business strategy, business enterprises will have to utilize various tools that can shed some light on the customer’s path and bridge the gap between online and offline customer experiences.

  1. Customer Data Collection and Storage:

    Business enterprises are making a concerted effort to know their customers and their marketplace to outpace their competitors. But the rapidly changing customer behavior is making it tough for enterprises to gain essential customer knowledge. The rapid rise of omni-channel has witnessed the generation of large amounts of customer behavioral data which has been seen as an opportunity by business enterprises to attain in-depth customer insight. But it is a massive challenge for enterprises to collect and store these huge amounts of data.

    Business enterprises need to give importance to harnessing Single Customer View (SCV) in order to remain competitive. The Digital Marketing Insights Report by TeraData has found various barriers that enterprises face while collecting SCV and the common barriers include ‘structural issues’ (46%), ‘time consuming’ (51%) and ‘technological challenges’ (44%) and yet 70% of the enterprises believe that SCV is extremely necessary for generating improved customer insight. It is no doubt a challenging and time consuming process, but enterprises must emphasize on it as an extremely worthwhile undertaking.

  1. Implementing the Right Technology:

    Business enterprises are in two minds about using in-house resources, employing outside help or building an analytics system to collect and analyze customer data. The use of fragmented and faulty approaches to understanding customer experience is quite prevalent in various enterprises. Only few of them have an effective and comprehensive solution in place and some have built their own technology customized for their customer’s experience. This has resulted in inconsistency across various enterprises as they are unable to make sense of all the data collected across various channels thereby resulting in an incomplete understanding of the effectiveness of their efforts in the purchasing process.

    In an ideal scenario, a single solution would be available to enterprises allowing them to integrate the available information into their strategies. But there is obvious uniqueness in the content offering, product line and customer journey with respect to each enterprise. Therefore, until the necessary tools are available, business enterprises will have a tough time discovering the requisite technology that can provide them the complete picture.

  1. Protecting Customer Data:

    With data being recognized as a key business asset by numerous enterprises, privacy of that data is one of the key concerns. Data breaches across various organizations around the world have increased drastically over the past few years. A survey by Ponemon Institute found that the number of successful attacks has increased by 176% in recent times and detecting and resolving them is taking longer.

    Business enterprises are beginning to accept security intrusions as unavoidable and are focusing mainly on preparation for the security breach and protect sensitive data present within the enterprise. In addition to the costs of detecting and recovering the data, valuable information is lost, business is disrupted and reputation of the enterprise is damaged. Preventing cyber-attacks is virtually impossible and the only thing business enterprises can do is minimize the damage.

    Customer data is a highly vulnerable asset and the first step towards safeguarding data is to understand the key challenges of managing data. As business enterprises transform themselves into an active data-centric enterprise, they have realized the importance of quality data and the need for a specialized approach towards managing it. In addition to overcoming various customer data management challenges and building improved customer experiences, business enterprises must also evolve their data management practices.


  1. Hey Arvind
    Couldn’t agree more with you! Unfortunately for both consumers and businesses it is not all hunky dory as the the convenience of digitization also has drawbacks. On the other hand, Customer Data management platforms, can aid marketers to be well informed about their audiences and help devise strategies that have a more stable outcome.
    Kathy Spencer


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