Customer data management (CDM) is the process of acquiring, organizing, and using customer data to better understand customers and ultimately increase conversions and retention. It encompasses the tools businesses use to collect and analyze customer data, the ethical framework of acquiring customer data, and the security measures involved with storing and accessing this data. CDM includes a range of software or cloud computing applications designed to give large organizations rapid and efficient access to customer data. The key components of CDM are:

• Data acquisition: This involves collecting customer data from diverse sources to form a unified view of each customer.

• Data storage: This involves storing customer data in one easily searchable database.

• Data organization: This involves organizing customer data in a way that makes it useful for the entire company.

• Data use: This involves using customer data to better understand customers and ultimately increase conversions and retention.

Benefits of CDM include keeping customer data at a high-quality standard, dealing instantly with customer issues, obtaining immediate feedback, and delivering better customer experiences. Efficient CDM solutions provide companies with the ability to retain and increase their customer base, and according to a study by Aberdeen Group, "above-average and best-in-class companies... attain greater than 20% annual improvement in retention rates, revenues, data accuracy and partner/customer satisfaction rates".

CDM requires collaboration with Legal and IT teams to ensure that the organization’s approach to CDM and the use of related technologies is fair and compliant with necessary regulations and guidelines. The primary tool for a CDM system is a customer data platform (CDP), which acts as a customer data management hub, using several processes to connect to different data sources and link data in real-time to customer profiles. Customer relationship management (CRM) platforms collect customer data, but for a different purpose than CDPs and DMPs. CRMs are primarily used by sales teams for tracking interactions, purchase history, and upsell opportunities with customers.