In our last chapter, we discussed the importance of delivering a good customer experience and the ingredients for doing so. One of the top requirements is customer data. Let’s explore what we mean by this, how companies typically collect data, and how to ensure you’re getting the most out of yours.
Why do we need customer data?
Customer data provides valuable insights into your customers' needs, preferences, and behaviors. By collecting and analyzing customer data, you can gain a better understanding of your customers and develop more effective marketing strategies and product development plans. It can also be used to personalize the customer experience, providing tailored recommendations and offers based on past behaviors and preferences.
This personalized approach can help build customer loyalty and increase the chances of repeat business. In addition, customer data can be used to measure and track key performance indicators (KPIs) related to customer satisfaction, such as Net Promoter Score (NPS) and customer churn rate. By monitoring these metrics, businesses can identify areas for improvement and address any issues or concerns customers may have.
What customer data do you want to collect?
Collecting and analyzing customer data can help companies gain insights into their customers' behaviors, preferences, and needs, which can inform marketing strategies, product development, and customer service initiatives.
Here are some of the types of customer data typically collected:
- Demographic data: This includes information such as age, gender, income, education, and occupation.
- Behavioral data: This includes data on how customers interact with your business, such as their browsing history, purchase history, and engagement with marketing campaigns.
- Psychographic data: This includes data on customers' values, attitudes, interests, and lifestyles.
- Geolocation data: This includes data on customers' physical locations, which can be used to offer personalized recommendations based on their current location.
- Contact data: This includes information such as email addresses, phone numbers, and mailing addresses, which can be used for targeted marketing campaigns.
- Social media data: This includes data on customers' social media activity, which can provide insights into their preferences, interests, and behaviors.
- Customer feedback: This includes feedback from customer surveys, reviews, and social media comments, which can be used to improve customer experiences.
So, how is this data collected?
Where does customer data come from?
Companies collect customer data through several different sources, such as:
- Website tracking: This data is typically collected through cookies and other tracking technologies. You can track customer behavior on your website to see which pages your customers visited, which products they viewed, and the items they added to their cart. This provides insight into what your customer is interested in and which other products and services they might like.
- Surveys and feedback forms: Some customers are happy to fill out forms on your website in return for access to gated content, to sign up for a newsletter, or to give feedback. This can provide valuable insights into customer satisfaction, preferences, and needs, as well as how “hot” a lead is if you’re using lead scoring.
- Social media: You can collect customer data from social media platforms by monitoring customer feedback, interactions, and conversations. This can provide insights into customer sentiment, preferences, and behavior. The difficulty with using data from outside your website is in combining with your data collected on your website. Without seamlessly integrated technologies, the two sets of data can be siloed and much less valuable to you.
- Personal interaction: Customer interactions with your sales and customer service team, such as customer contact information, purchase history, order details, support tickets or live chat, can provide insights into customer issues, preferences, and satisfaction. Again, the better this data is integrated and synced with your customer relationship management (CRM) system or point-of-sale (POS) system, the better the insights.
Ensuring customer insights from customer data
Data silos occur when data is stored in an isolated or inaccessible system and cannot be shared or integrated with other systems, making the data difficult to access and analyze, resulting in inefficient processes, wasted resources, and missed opportunities to gain insights about your customer.
To avoid customer data silos, companies need to take a holistic approach to customer data management, ensuring that data is integrated and shared across all systems through seamlessly integrated technology, so that one customer’s data from across all touchpoints can be stored in one place.
Here are some ways in which companies can avoid customer data silos:
- Integrate your systems: Integrate your systems and tools via APIs to ensure different systems can communicate with each other and share data. This way, you can see your customer’s social media comments alongside the product pages they have visited for a more holistic view of who they are and what they want.
- Establish a single source of truth: Use a centralized customer relationship management (CRM) system or digital experience platform (DXP) as your single source of truth, in which all data from all touchpoints is stored.
- Standardize your data: Ensuring that your data is collected and stored in a consistent format across all systems and departments helps to avoid discrepancies and errors that can arise when data is stored in different formats or with different naming conventions.
- Provide access to data: Make sure the right people in your organization have access to the right data, e.g., sales, marketing, customer service, etc. This can be achieved with role-based access controls that restrict access to sensitive data.
- Ensure data privacy compliance: You should ensure that you are collecting and managing customer data in accordance with relevant data privacy laws and regulations, such as GDPR and CCPA. This includes obtaining consent for data collection, providing transparency around data usage, and implementing appropriate security measures to protect customer data. We’ll go into this in more detail in chapter eight.
A single source of customer truth
Collecting customer data from a variety of channels helps you learn about your customers’ preferences and interests and tailor your offering and customer experience accordingly.
By having a single source of truth that contains a complete and accurate view of your customer from across all touchpoints and interactions, you’re much better equipped to provide a seamless and personalized customer experience that drives loyalty and business growth.
Which brings us nicely to the topic of our next chapter: personalization. Let’s explore how you can use your collected data for content personalization and how it can improve your bottom line through increased customer loyalty, retention, and revenue.