How to leverage data governance to boost customer retention
Data governance defines the collective policies and processes companies use to manage the information they possess. It encompasses such things as data usage, access to information, data quality and data storage.
In today's increasingly digital world, people frequently provide their contact information when doing things like checking out at an e-commerce store, applying for local services or signing up for a company's newsletter.
Often, they provide the information almost without thinking, especially while interacting with a website or an app. If customers feel companies misuse their data, they may stop doing business with those entities.
Conversely, if you take data governance seriously and let customers know about it, setting that priority could increase customer retention.
1. Make the Ethical Use of Data a Primary Concern
Customers are no longer content to give their data to companies and let them use it for any purpose. They want to feel confident that if they provide their valuable information to companies, those brands won't use it for questionable purposes.
A 2018 study from WE Communications found 97% of respondents believe companies should use technology ethically. In the same survey, 84% of those polled thought their data was not secure. Most people know their data helps many technologies work better. For example, Amazon's smart speakers remember the commands people give, and use them to provide better answers.
But, WE Communication's findings suggest people are willing to draw the line if companies start to depend on technology to do unethical things. One straightforward way to implement ethical use into data governance is to ask yourself whether the way your business is using customer data aligns with people's best interests. Moreover, does the usage match the ethical principles that define your company as a whole?
If the answer to either of those questions or similar ones is "no," get to the heart of unethical uses. Then, determine if options exist for continuing to avail yourself of customer data, but in ethical ways.
2. Understand the Link Between Data Quality and Customer Loyalty
The information you have about customers probably gets pulled from various platforms and arrives to you in several formats. Getting the data into a standardized format can be tricky and time-consuming, but it's worth the effort. That's because high-quality data can boost customer loyalty by helping you provide content that's most applicable to individual customers.
Working with high-quality data also means the parties who directly engage with customers have the appropriate information when needed. For example, it's helpful if a call center representative can pull up records of a person's previous interactions to guide a current conversation.
But, if your company keeps data segmented into different departments, or in formats that are inconsistent and hard to follow, you'll have a harder time using it to keep customers satisfied. Be open with customers. Let them know people from different departments within the organization may see their information, but only in the process of providing service to them.
3. Use Data Governance to Improve Current Retention Strategies
Perhaps one of the primary reasons you decided to enhance your data governance is that it became clear your current methods did not enable giving customers the level of personalization they expected. According to statistics, three-quarters of people will only do business with brands that recognize them by name or provide product recommendations based on past purchases.
By taking a close look at any existing data governance standards, you may find some glaring oversights. For example, if you only keep customer data for a short time, that strategy doesn't allow for making product recommendations based on years of past orders. Or, if you don't follow a plan for categorizing and storing data, you may discover it's impossible to find data about customers that you can use to show familiarity with them.
Even if it appears your customer retention strategies are working well, emphasizing data governance could take them to new heights. Collecting data from people is only worthwhile if your company can use it effectively. Data governance can help you identify weak points in your processes and fix them.
4. Be Straightforward About Why You Need Customer Data
You've probably filled out a form at a website before and thought, "I wonder why they need this information?"
For example, someone who signs up to get exclusive offers from a clothing brand might feel uneasy if the company's form asks them for their street address. But, it'd help if the person got clarification that the street address helps the company send push notifications relevant to local sales.
Increasing customer retention with your data usage policies means providing specific details about how your company uses the data, and what customers get in return for giving it to you. Many people are fed up with vague statements such as "We use this information to improve your experience on our site." Individuals will be less likely to provide their data unless they feel you have valid reasons for requesting it.
Spotify has a dedicated page on its website called Privacy Center. The company also makes the respective content easier to understand by using headings, sections and bulleted lists. Besides informing people how the streaming brand uses data, the information in the Privacy Center goes into the measures Spotify takes to protect data.
Providing this information upfront builds user trust and avoids the possibility that they'll make the wrong assumptions. But, you shouldn't try to draft such content without ironing out an internal data governance strategy first and getting everyone on board with it. Ensure all customer-facing employees can retrieve the company's data policy when required, too.
Imagine if a concerned customer engaged in a live chat with a customer service worker and asked them why the company wants to have a specific type of information. The responding agent needs to have the information at hand to give a confident answer. Otherwise, the person asking the question may lose trust and take their business elsewhere.
Data Governance Could Increase Customer Willingness
It should now be obvious there's a well-defined connection between enforcing a data governance plan and making customers feel open about giving their data to customers.
Data governance helps remove uncertainties about how to handle customer data or why businesses need the information at all. In turn, customers appreciate a company's honesty and realize that providing data can create a mutually beneficial situation.