Improve Customer Data and CRM With Master Data Management

Learn how MDM can lead to better insights and improve customer relationships.

Customer relationship managers, data managers, and marketing professionals often seek to improve their customer relationship management (CRM) capabilities. When you properly collect, analyze, and leverage customer data, you better understand your buyers, which makes it easier to provide them with effective products and messaging.

But if a company isn't aligning master data management (MDM) with customer data and CRM, it may suffer from poor customer data quality, inconsistencies, and siloes in CRM systems, resulting in ineffective customer experiences and relationship management.

In this article, we explore how you can use master data management (MDM) to improve your CRM and customer data system. We also dive into what makes an effective master data management system and how to prepare your business for an MDM implementation. You can then use this information to design your own MDM system and optimize your marketing and product development.

What is master data management and why should you align it with your customer data and CRM initiatives?

Master data management (MDM) is an approach to managing your organization's data to ensure it's accurate, consistent, and actionable. The goal of an MDM system is to produce data that you can use for interacting with customers, designing and revamping offerings, and optimizing your marketing strategy.

Customer data is information about customers, such as contact details, demographic info, data about their transactions and interactions with your online content, social media behaviors, and subscription information. Customer data can also include information about how individual customers progress through the customer lifecycle as they evolve from prospects to paying customers and eventually, repeat buyers.

A customer relationship management (CRM) system consists of both technology and systems you use to optimize customer interactions and foster relationships that result in revenue. A CRM system serves as a central hub for collecting and analyzing customer data. CRM technology is often accompanied by policies that encourage the safe use of data, as well as methods for generating fruitful customer relationships.

For example, a company may have internal policies regarding the kinds of information to input into their CRM, how, and when. In addition, the organization may require employees to maintain their CRM by making sure the data is free of duplicates, up-to-date, and comprehensive.

For small to midsize business (SMB) leaders, aligning MDM with customer data and CRM can provide a unique competitive advantage. With a full, 360-degree view of each customer, you have insight into what encourages them to make purchases, as well as how you can craft your offerings to match their needs. This alignment with MDM can solve two sticky business challenges. First, it enables you to design data-based marketing strategies. Second, by aligning with MDM, you give your company the ability to craft its offering according to what customers need.

How can master data management improve your customer data and CRM initiatives?

You can eliminate costly inefficiencies when you use master data management because you ensure your sales and marketing teams and product developers have thorough, relevant, actionable customer information. The benefits break down into six categories:

Improves quality and consistency of customer data and records

With an MDM system, you can consistently collect high-quality data. For instance, instead of having multiple profiles for the same customer, you can eliminate duplicate records. This will ensure the efforts of customer service reps aren't redundant.

An MDM can also verify that customer data is usable. This includes storing it in the right format so that users can easily search through it.^[1]

Reconciles and unifies customer data to bridge silos in CRM systems

When you have multiple teams or systems collecting data, it's easy for it to end up in silos. However, an MDM system can eliminate the walls that often separate valuable information. In this way, an MDM delivers a more streamlined customer experience because all stakeholders have access to the same range of comprehensive customer information.

Strengthens the effectiveness of customer experience and relationship management

Using an MDM can provide staff with higher-quality customer information and puts them in a position to improve the customer experience. As a result, everyone who interfaces with customers can build stronger relationships with each buyer.

It's also worth mentioning that because an MDM enables a more comprehensive view of each customer, design and customer success teams can use it to personalize each client's experience according to their unique needs. For example, a retailer could use an MDM system to collect data about customer buying and browsing habits via a mobile app. The retailer can also correlate buying and shopping behavior with important dates, such as holidays, the customer's birthday, or the onset of seasons.

Enables analysis of customer and customer-related data

Because an MDM removes siloes and streamlines the process of collecting information, it saves time for those charged with analyzing customer data. For instance, by using MDM to fine-tune your governance policies, you can encourage sales staff to enter customer information in your inventory management system. Then, inventory managers and buyers can identify trends regarding the kinds of customers that are more likely to make purchases. Further, fulfillment teams can use customer geolocation data to plan shipping budgets and predict delivery timelines.

Supports an analytical customer 360-view and data-linking

When you use a customer data or CRM system in conjunction with an MDM, it's easier to analyze data because it's formatted correctly and inputted into a centralized system. For example, an MDM can make it so you don't have to open multiple applications to access customer buying patterns, demographic information, and website behavior. Instead, you can have one system automatically pull the relevant information and then analyze and report on it.

Traces the events throughout customer life cycles

It's easier to see each chapter of your customers' stories when you have consistent, dependable life cycle data. This also paves the way for insights you can use to train your staff.

For example, suppose, as you analyze customer life cycle data, you realize that there's a direct correlation between the time it takes to turn a prospect into a paying customer and how often leads turn to actual customers. Your analysis reveals that the chances of earning a paying customer increase by 45% when the conversion happens within a month of initial contact.

You can use this to establish goals when it comes to how soon associates reach out to customers, how often, and even how they interact with them during the call or email.

What are the key features of master data management?

Master data management involves a combination of policies and techniques that ensure your data is clean, useful, and safe. They include:

• Data storage. By setting MDM policies that govern how long you store data and the kinds of information you store, you can avoid hitting storage limits that could make it hard for people and systems to access the information they need. You also prevent latency issues and data loss.

• Profile unification. You can use machine learning to deduplicate data and automatically merge profile information for more consistent customer information.

• Data modeling. With data modeling, you set up relationships between different kinds of data and the systems that produce and process it. You can then use your centralized data to create metadata associated with business tasks. 

• Data quality. By automating a data entry check system, you can require employees to enter a consistent, bare minimum baseline of data every time, resulting in higher-quality information.

• Workflow management. Your MDM also benefits workflow management, which can consist of automated alerts pertaining to data stewardship and management. This encourages consistency and higher quality across your CRM.

• Data governance. An MDM also dictates how and when you adjust your policies, as well as the analysis of the impacts your system is having on operations.

Prepare your business for master data management implementation

The MDM implementation style you choose depends on the requirements of your business. Factors include whether you must keep data in different locations and how employees and systems will use the information.^[1] 

• Consolidation style: This involves a centralized data warehouse that marketers and analytics professionals often use.

• Registry style: This consists of a straightforward table that provides a single row for each customer. Each column contains identifiers you use to distinguish individual customers.

• Centralized style: This style consists of a single set of records that users can access on a read-only format, making it useful for different applications your SMB uses.

• Coexistence style: Some organizations must use this style, where data coexists in multiple locations. This may be necessary if several departments have to enter and edit their own data.

Next steps to put your customer data on the right track

By designing an MDM with the above features and choosing the best style for your business, you can create a system that gives all stakeholders and systems clean, reliable customer data. They can then use this to build stronger relationships with buyers and make sure your goods and services address customers' needs.