How To Use Customer Data To Boost Your Business
Building a business strategy without the use of customer data is like baking a cake without a recipe. You may have a general idea of how to format and implement an average strategy but taking specific data measurements into consideration will allow you to fine-tune your strategy for better success. In this guide, we look at the definition of customer data, how to obtain the most relevant data for your business, and how to use it in your business strategy.
What Is Customer Data?
Customer data refers to information about customers relevant to their consumer behavior. The data includes behavioral, demographic, and personal information. This helps companies to better understand consumer behavior to engage strategically with their target audience. Analyzing customer data allows companies to pinpoint their clients’ primary needs relative to the product or service they are providing. The company can then offer a better service to directly meet these needs in the most effective way.
Why Customer Data is Important
Here are 5 ways in which obtaining, analyzing, and implementing customers data will improve your business and increase sales.
- It assists in designing better products that meet client needs.
- It identifies where customers get stuck in the purchase process. This allows you to make adjustments to increase conversions.
- You can target the most responsive audience in a strategic way by understanding consumer expectations.
- It allows for improved customer communication strategies.
- It can improve customer service strategies.
If you put the data you obtained to good use, you will essentially be able to increase customer lifetime value and build a loyal brand culture.
Types of Customer Data
The most useful data for analyzing customer behavior and improving business strategies can be divided into 4 main categories.
- Personal Data
This refers to any information that can be used to identify a person. It is divided into two categories, namely linked and linkable information.
Linked information can be used on its own to identify someone without requiring additional data. This includes an individual’s:
- Full name
- Physical address
- Email address
- Driver’s license number
- Identification number or social security number
- Passport number
- Bank card details
- Mobile phone number
With linkable information, it is only possible to identify an individual when it is paired with another piece of information. Standing on its own this type of data is too vague to pinpoint a specific person.
Examples of linkable information are:
- First name only
- Last name only
- Broad location by country or city
- Age group
- Job title
- Engagement Data
Engagement data provides information about customer interaction behavior. It will give the company insights into how customers engage with the brand through various marketing endeavors such as websites, social media, and in-person contact. Engagement data is divided into 5 communication channels. Each channel of engagement is evaluated according to the following engagement behaviors:
1. Website and Mobile Applications
- Number of website visits
- Most viewed pages
- Time engaged on the website
- App user flow
2.Social Media Engagement
- Number of post likes, shares, and comments
- Video views
3. Email Engagement
- Number of email open rates
- Click-through rates from the email to the website links and landing pages
- Email sharing and bounce-back rates
4. Customer Service
- Number of tickets launched
- Complaint and query types
5. Paid Adverts
- Click-through rates on paid adverts and search engines
- Cost per click
- Actual conversions
- Behavioral Data
Behavioral data reveals customer purchase patterns. Sometimes engagement data can assist in determining behavioral data. Behavioral customers data is obtained by evaluating:
This includes purchases, previous purchases, average purchase values, and e-commerce cart abandonment statistics.
This includes information gathered by observing user attention. It also evaluates online user frustration determined by mouse movements, scrolling, and repetitive clicking.
- Attitudinal Data
Attitudinal data is very subjective and determined by customer feelings and personal preferences. This data is best obtained through direct customer feedback in the form of surveys, reviews, complaints, and focus groups.
Attitudinal data considers the following aspects:
- Product and service satisfaction
- Brand desirability
- Personal preferences
- Decision-making role players
- Purchase criteria and deal breakers
How is Customers Data Obtained?
Customer data is collected by businesses and marketing agencies via mobile applications, websites, surveys, social media, and marketing campaigns. Data-driven companies take measures to ensure the collection of the relevant information required to evaluate and improve their customer experience.
Customer Data Tools
To collect and manage customers data two types of technologies exist:
- Customer relationship management systems (CRMs), and
- Customer data platforms (CDPs)
Each platform serves a distinct purpose in managing customer data. When used in conjunction with one another it can yield high-performing results. Here is a breakdown of each platform and how they differ from each other.
Customer relationship management systems:
- Help manage customer relationships.
- Are designed for customer-facing roles, such as sales staff and success representatives.
- Are used to log customer interaction data allowing sales staff to speed up and improve efficiency.
- Include website contact forms and support tickets.
- Requires data to be collected manually making it highly specific and hard to automate or standardize.
Customer data platforms:
- Help manage customer data.
- Are designed for non-customer-facing roles like marketing departments, products, and management.
- Aim to manage and understand customer data to make high-level business decisions.
- Gather data from various customer touchpoints in one place. This data includes advert response, website traffic, transactional data, and product user behavior.
- Gather data automatically from mobile devices, laptops, and the web.
- Help companies understand how, why, and where customers engage with their business.
Customer data refers to information about customers relevant to their consumers behavior. Types of Customers Data include:
- Personal Data
- Engagement Data
- Behavioral Data
- Attitudinal Data
The tools used to capture and evaluate this data are customer relationship management systems (CRMs) and customers data platforms (CDPs).
Customer data identifies the ways in which companies can improve customer experiences, thereby retaining customers and increasing profits.
CustomersFirst Academy offers comprehensive customer service training designed to help you grow your skills and advance your career.
To keep learning and developing your knowledge of customer service, we highly recommend the additional resources below: