Building robust customer data management systems: A developer's guide

Highlights

You’ll learn how customer data management systems enhance data accuracy, ensure compliance and simplify complex data integration.

• Improved accuracy: CDM solutions centralize data collection and implement governance frameworks that ensure consistent, high-quality data across all touchpoints.
• Seamless compliance: Built-in security features protect sensitive information
• Simplified Integration: CDM systems unify fragmented data sources into a cohesive ecosystem, eliminating silos

Take control of your customer data today. Implement a real-time CDP to transform raw information into actionable insights.

Many leaders say that being data-driven has led to more innovation. However, this MIT Technology Review reports that 45% of respondents only use data for basic insights. This has led to missed opportunities and does not reflect well on organizations.

Hence, businesses must understand the value of data management systems, and developers must build them to be robust and address business needs.

What are customer data management systems?

Businesses interact with their customers on multiple platforms and rely on that data to fine-tune the customer experience. Customer data management (CDM) refers to the process by which they collect, store, organize and analyze that data.

The message here is to harmonize data so that you can better understand your audience or customers. By so doing, you can then personalize marketing campaigns, optimize customer journeys and make better decisions.

Why is customer data management so important?

According to a Harvard Business Review article, only 3% of collected data meet the proper quality standards. That points to a huge problem—you cannot make reliable, data-driven decisions on the back of poor data.

The idea of customer data management is to fix such issues. It collects and organizes data, ensuring that the data is secure, accurate and consistent. Without such systems in place, you risk data silos, compliance violations and multiple missed opportunities.

Components of CDM systems 

A robust CDM system should include these core elements:

• Centralized data collection: A CDM system gathers relevant data from multiple sources like websites, social media and real-time CDP systems.
• Data integration tools: CDM systems organize collected data and combine it into a unified view in a centralized location. This makes it easy to access and use for segmenting audiences, as well as targeted marketing and data analysis.
• Data governance: This feature takes care of data quality. It ensures that data is accurate, in the correct format, secure and usable. It also houses all policies and protocols to maintain regulatory compliance with GDPR, CCPA, etc.
• Security features: This can also be part of the data governance framework. It ensures that sensitive customer data is secure at all times, using features like end-to-end encryption, role-based access controls and regular data backups.
• Analytics: CDM systems provide features that turn raw data into actionable insights. This enables you to make reliable and accurate data-driven decisions.

Strategies for building scalable CDM systems

You will likely experience some complexity when dealing with vast amounts of data. Hence, developers must design scalable customer data management systems to stay ahead of that. Here are some strategies to focus on.

• Prioritize cloud solutions: Cloud-based solutions offer elastic computing resources and store, auto-scaling, managed databases and microservices. These features make them ideal for business expansion.
• Build systems for potential customers: It is imperative to design data systems with a clear understanding of your customers. This reduces the need for major overhauls down the road. 
• Implement microservices: With microservices, you can scale sections of your system independently. That ensures system resilience via fault isolation. They are a cost-effective way to scale data management systems.
• Handle data erasure and compliance: Build CDM systems to manage compliance. For instance, you may include automated data erasure workflows to comply with regulations like GDPR’s right to erasure. This can reduce liability and simplify compliance management.

Best practices for building scalable CDM systems

To build a robust customer data management ecosystem, here are some best practices to keep in mind.

• Secure data backups: This ensures data is safe even in the event of cyberattacks or hardware failure. You can use cloud-native solutions to secure backups.
• Focus on data protection and compliance: Ensure that the system is fitted with compliance and security features.
• Prioritize efficient data modeling: Design systems with clear data relationships and structures. That way, you reduce redundancy and lay the foundation for scalable CDM solutions.

How CDM systems simplify data integration in SaaS

Customer data management (CDM) systems centralize data and automate integration. This streamlines data integration within SaaS environments. They also offer:

• Unified data architecture that eliminates silos between departments
• API-based connectivity that supports seamless communication between applications
• Standardized data formatting that resolves data inconsistencies across platforms
• Automated ETL processes that reduce manual application integration

These capabilities allow organizations to maintain consistent customer profiles across multiple touchpoints. By doing so, scalable data management systems drive targeted marketing campaigns, support personalized interactions and reduce potential technical overhead.

Integrating a CDP with customer data management systems

Integrating a real-time CDP with existing customer data management systems births a robust ecosystem that maintains data integrity while powering personalized customer experiences. 

CDPs collect, organize and activate customer data from various sources. With that, they create unified customer profiles that marketers can rely on to make informed decisions. For integration, audit your existing data sources and systems. Then, using a phased approach, focus on high-quality data sources before you add other systems.

Benefits of CDP integration

CDP integration with customer data management systems empowers you to make the most of your customer data. Here are the ways it does so:

• Faster time-to-market: CDP integration supports real-time data activation. It makes customer data readily accessible for use across channels, which speeds up campaign deployment.
• Better cross-functional collaboration: A CDP centralizes customer data. This breaks down silos, ensuring that departments such as marketing, sales and support can share customer information and work with the same data.
• Better operational efficiency: It automates data collection, processing and analytics. This reduces manual work and potential human errors that happen as a result. You also save time that can be committed to creating more value.

Data security in customer data management systems

Data breaches can severely damage a business's reputation and finances. Hence, developers must be proactive in designing CDM systems. Here are security measures to consider:

• Regular security audits and updates: Perform regular system audits to identify vulnerabilities and update security policies to address emerging cyber threats. Also, disaster recovery plans should be designed to include incident response protocols. That way, teams can act swiftly in the event of an attack.
• Data encryption and access controls: Encrypt customer data both in transit and at rest using industry-standard protocols. For access controls, implement role-based permissions and multi-factor authentication to limit exposure.

Case studies

Industry Dive

Industry Dive was unable to centralize customer data, making it hard to track their customer journeys. Opting for Contentstack's real-time CDP allowed them to integrate customer data. That change allowed them to personalize customer journeys and increase customer engagement by 40%.

"Our editors really see the value of Lytics. They’re using it every day to shape their editorial content." Robin Re said.

Keep reading to see how Industry Dive increased CTR by 40% with Contentstack’s real-time CDP. 

Land O'Lakes

After extensive market research and RFP, Land O'Lakes opted for Contentstack’s real-time CDP. This powered their customer data and customer data segmentation, enabling them to deliver tailored experiences. As a result, CTR went up by 29% and conversion rates by 38%.

Steve Rude said. "Impressions are the metric of a failed marketing campaign…If you’re not getting the conversions, it means you weren’t hitting the right audience. You may not reach a million people, but we’re going to reach the right people with the right message. And that’s where Lytics helps us."

Read more on how Land O’Lakes increased the conversion rate with a CDP.

FAQ section

What are the essential features to look for in a CDM system?

A CDM system offers centralized data collection, robust data security, segmentation tools, CDP and CRM integration and analytics.

How does integrating a CDP improve CDM systems? 

CDP integration enhances collaboration across departments. It streamlines workflows and drives cohesion as teams can access unified customer data to make informed decisions.

What are the best practices for customer data security?

Some of the data security best practices include data encryption, access controls, regular audits and creating reliable and relevant data backup plans.

Why is it crucial to segment customer data in marketing? 

When you segment data, you can understand each customer group and craft marketing campaigns that speak directly to their needs. This increases customer engagement and response rates.

Learn more

Customer data is one of the most valuable assets of a business. Hence, it would make sense to design a robust customer data management (CDM) system. With that, you can take control of your data and enhance data-driven decision-making within your organization.

A customer data platform is one of many data tools that can work with a CDM system. It allows you to activate first-party customer data, orchestrate customer journeys and make decisions based on real-time customer insights. Talk to us today to see how Contentstack’s real-time CDP can support your data management.