Customer Data Integration Explained in 5 Minutes or Less

Customer data integration is the digital process that brings all customer data in one place, analyze the data, and distributes insights to various departments in your business.

Businesses work hard to collect customer data like how their clients use services or products, the support team’s performance, clients paying invoices on time or not, and so on.

However, most businesses see that these important customer data stay isolated. Different departments collect data multiple times to resolve their challenges. There is rarely a centralized database where all customer data is available. 

In short, different teams of your business might be collecting the same customer data multiple times just because the teams are working in silos. Here comes customer data integration to rescue. 

If you also feel like your business is wasting too much money on collecting the same customer data, read and learn the process of CDI from the ground up.    

What Is Customer Data Integration (CDI)?

CDI or customer data integration is the procedure of extracting client or customer information from many sources and systems. Later, the CDI process combines and organizes the customer data in a central software or database. It becomes a data warehouse for your business customers. 

Now, different teams and departments can connect their business tools to this warehouse to extract raw customer data for data modeling or customer insights to apply in sales and marketing. 

Here are the three tasks that a successful CDI solution must complete:  

#1. Consolidation of Customer Data

In this method, the process cleanses, standardizes, and loads data into the business data warehouse. Now, employees, project team members, and business departments can access the database to extract the kind of data they need. 

However, a CDI manager must ensure an appropriate role-based access management system to secure customer data from hackers and bad actors. 

#2. Propagation of Client Data

Data staying idle in a data warehouse will not do any good to your business. You must ensure that the right team has the right kind of access to such data warehouses. 

You either create database software so that teams and employees can search for the data they need. Or employ automated software to copy-paste data regularly from a central database to a database hosted for different departments of the organization. 

#3. Federation of Customer Data

The federation process mainly focuses on collecting data from several customer touchpoints, affiliates, retailers, dealers, wholesalers, eCommerce sites, online surveys, physical surveys, marketing agencies, data brokers, and many more.

It is simply the process of keeping customer data from several sources in one database. The database is not siloed, though. Other departments can access the data with appropriate role-based access protocols.

Small, medium and startup businesses often use data consolidation in their CDI solution because these entities handle low volumes of data. On the contrary, large and enterprise businesses prefer data federation since its affordable. 

Why Is Customer Data Integration Important?

Customer data integration is an indispensable part of customer relationship management (CRM) tools, programs, and events. The solution gives all the departments in your company get easy access to regularly updated customer insights.

Most businesses primarily use a CDI process to reduce customer churn, increase the reactivation of businesses from old customers, and thereby increase customer loyalty. It helps you to create personalized emails, texts, WhatsApp messages, Facebook ads, Google Ads, etc. 

All this can happen smoothly and affordably with data collected from thousands of customer touchpoints. With such holistic customer behaviour insights, customer account managers, business development agents, and support agents can appropriately connect with customers and close more deals by speaking the language clients understand. 

By leveraging CDI, customer-facing companies also create a different and more pleasant customer experience. You understand the complete customer journey that ends in buying or subscribing to your products or services. 

Then, you apply the same tactics in a reverse way into sales and marketing channels. You run appropriate messaging, discounts, promotions, and flash sales so that the customer catches your hook and enters the sales funnel again to buy or subscribe to your digital or physical goods.

Best Practices for Customer Data Integration

Find below the best practices you must follow to implement a CDI solution successfully:

#1. Find and Define Source Points of Data

First off, find and define all the customer data source points. Then, select one or many data scrubbing and database-creation tools to collect data from many sources. 

#2. Structure Datasets According to Categories

You must categorize data based on various categories. These categories will vary from industry to industry. For an airline company, the customer data categories could be business class flyers, economy class flyers, miles redemption behavior, in-flight services preferences, and so on. 

#3. Create Metadata-Based Snippets

Do not give full access to the data on demand. Assign many metadata, keywords, and tags to raw data or processed data insight. Then, users can explore the whole data if the metadata matches their requirements. 

#4. Give Role-Based Access

Create a role-based access management system and single sign-on and two-factor authentication to protect customer data from hackers and phishing attempts. 

#5. Create a Goal for Data Integration

There should be a defined goal for how much customer data integration your business is planning. Accordingly, the CDI manager must keep track of performance metrics that prove the CDI solution is working.

Use Cases of Customer Data Integration

#1. Managing a Centralized Data Warehouse

Data warehousing is one of the use cases of CDI. You can build a rich and high-quality centralized database for all sorts of customer data either for accounts, finance, billing, procurement, sale, marketing, and product development.  

#2. 360° View of the Customer Base and Streamlining

Businesses also use customer data integration processes to create a customer 360° view. It enables your customer support team to accurately resolve sudden customer queries about orders or product faults.

For example, the CDI tool can analyze data collected from social media sites of customers reporting battery drain issues for a mobile phone that you launched a day ago. It can channel the feedback to your product team. 

The product team can come up with a message which your support team can share or publish on the website to contain customer outrage.    

#3. Increasing Collaboration

CDI is another way of involving teams and employees who prefer working in silos in collaborative work. When you impose mandatory use of a centralized data source for all customer-related insights and raw data, such employees become obligated to communicate with different teams. 

#4. Offer Personalized Experiences

Airliners, tours and travelers, hotels, quick-serve restaurants, and cruise operators extensively use CDI tools.

Such tools can discover preferences for each customer from their interactions with the company. Then, the marketing team can collect such insights to approach the customers with tailored route plans, seating positions, dinner menus, and so on.  

Benefits of Customer Data Integration

CDI offers endless benefits to a company in terms of customer relationship building and revenue generation. Some major benefits are as below: 

• Discover product selling opportunities by cultivating customer data in a data warehouse and generating recommendations. For example, it can create different product price-based customer slabs for selling premium, mid-range, and budget products to a customer base. 
• A CDI solution can analyze and deduplicate customer data. Hence, you can minimize the cost of email or text marketing by sending messages to individual customers and not duplicate customers. 
• You can leverage customer likes and dislikes data and approach unsatisfied customers with tailored promotions and discounts to win their trust again.
• The best part of CDI is trend forecasting. By analyzing current customer feedback and the market trend, a CDI solution can tell you how many products you need to produce for the upcoming holiday season. Thus, you can save on manufacturing and inventory management costs.
• Your customer service, sales, and business development teams can resolve customer questions, complaints, and request faster to win their trust.
• You can frequently send product suggestions to loyal customers by analyzing their buying trends. This improves the amount of upselling and upgrading revenues.   

Next, let’s discuss the challenges in customer data integration.

Challenges in Customer Data Integration

Managing and analyzing data could be effortless by leveraging database and data science technologies. However, the core CDI solution has its challenges. The most critical challenges are as below:

#1. Starting the CDI Process

When a business deploys a CDI process, the goal is often well-known. However, creating the CDI plan and taking the right steps to reach your company’s goal can be more difficult than you expected earlier. 

Businesses often try to begin with all existing and new data. This creates a bottleneck. Instead, start in sprints for small datasets and slowly establish the followings: 

• A comprehensive inventory of data
• The source of such data
• The target of the data and its insights
• Analysis types needed
• Frequency for reports

#2. Processing Historical Data

Old data stored in business servers, employee workstations, and other cloud locations could be missing metadata that the CDI solution requires to integrate old data into the new data warehouse. 

You can separately process this data through a data organization process and then feed it to the main database. If some data looks truly obsolete, archive it or destroy it.  

#3. Creating a Self-Correcting System

Since customer data comes from organic sources, there is no way for your business to dictate the format of the data. You may start a survey process that only collects a fraction of the data a CDI handles.

Hence, the main challenge here is the constantly changing data format. You can overcome it using CDI tools that leverage artificial intelligence (AI), machine learning (ML), and advanced data science technology.  

#4. Sourcing Data From External Sources

Organizing data collected from data brokers, third parties, and other businesses can be a real challenge since the data structure and format may be totally different. 

Learning Resources

#1. Customer Data Integration A Complete Guide

If you want to become a problem solver in the field of CDI, then you must read this complete guide on customer data integration.

It grooms you to become confident in asking the right questions about customer data integration problems in a business. Also, the book helps you to get feasible answers to such CDI challenges.

Alternatively, if you are a business entrepreneur or startup owner and need to define, design, create, and enforce a CDI process in your organization, you can take functional assistance from this book.   

Customer Data Integration

If you want your company’s customer relations management system to work, give this book a try. 

Also, in a highly competitive market, if you want to nurture your existing customer, understand their pain points, and resolve customer issues with novel products and services, you must rely on the Customer Data Integration hardcover or Kindle version book from Amazon.

The book has been written from both the technical and business perspective. It shows businesses how to deliver holistic, accurate, and long-term understanding of their clients via a CDI program.   

Master Data Management and Customer Data Integration

Master Data Management and CDI help you to transform your organization into a customer-centric business. It gives you a timely and complete understanding of the target audience or existing customers using MDM-CDI.

You will learn the following after studying it diligently: 

• Create and enforce a dynamic MDM-CDI architecture
• Enhance the solution’s agility by using web services and SOA APIs
• Understand who your customer is across different verticals of the business

The book also discusses the way to integrate real-world information about clients in your customer relationship management programs and events.

Final Words

So far, you’ve gone through an elaborate discussion on the customer data integration (CDI) process for any business. This should help you consolidate all customer data in one database, refine it, analyze it, and make insights available for all the teams to consume data to increase business revenue and brand performance.

You have also explored some reliable and popular eBooks that experts suggest to those who want to master the customer data integration concept for business or career needs.

Next, you can check out the best customer data platforms to collect data on your target audience.