One of the most valuable assets to a company's ecommerce operations is customer data. Understanding how to collect customer data in accordance with privacy measures, and how to use that data to create effective marketing strategies is an essential skill for business growth.
This article will tell you why customer data is crucial to your business, what data you should collect, and how to collect and protect it.
- Why Is It Crucial To Collect Customer Data?
- Types Of Customer Data
- What Customer Data Collection Methods?
- What To Consider When Tracking Customers’ Data?
Why Is It Crucial To Collect Customer Data?
Customer data is crucial to ecommerce for a number of reasons. The two that you should be most aware of concern how customer data improves marketing and how it improves the customer experience.
Customer data can improve marketing
First of all, marketing has always been more effective when it is data-driven. Today, we are able to collect large amounts of information directly from our customers using a variety of analytics tools and methods.
Data-driven marketing means that you have both quantitative and qualitative data about your customers and can tailor your marketing campaigns to your audience—or, in some cases, to specific individuals.
Customer data provides information about customer behavior, goals, pain points, and challenges. There are many things you can do with that data:
- Personalize marketing campaigns: According to Digital Information World, 74 percent of customers feel frustrated by irrelevant marketing, and 56 percent reward personalized marketing with a purchase.
- Optimize multiple marketing channels: Understanding how your customers interact with your business on different platforms, such as social media or your website, helps drive marketing to produce purchases.
- Improve content: Consumer data helps you to understand customer sentiment toward your content. That data allows you to improve that content in the view of the customer.
- Automate marketing: Without data analytics, it is difficult to automate marketing. With data, there are ways to automate marketing to match your customers’ behaviors.
According to Invesp, businesses that employ data-driven personalization drive five to eight times the return on investment in marketing spend compared to businesses that do not. So employing customer data in your marketing campaigns will significantly improve success.
Customer data can improve customer experience
In addition to improving marketing, collecting customer data also improves the customer experience. As we noted above, nearly three-fourths of consumers respond negatively to irrelevant marketing. To improve their experience and garner positive reactions, you must understand your customer. The way to do that is through data gathering for personalization.
Personalizing and improving your customers’ experience with your business can have important outcomes:
- Increased customer engagement
- Improved brand awareness
- The creation of brand loyalty
These outcomes can give you the edge over competitors who may not be taking advantage of customer-data-driven methods of marketing.
What Types Of Customer Data Should You Collect?
There are different types of customer data that will be useful for your eCommerce business. Different types of data will provide different insights and serve different purposes for your business.
Customer identity data
Customer identity data provides identifying information about an individual. It includes data such as the following:
- Phone number
- Email address
- Job information
This gives you basic information to interact with your customer and customer base. Such data helps you understand the demographics of your audience, which can contribute to your marketing campaigns. For example, if you find that 60 percent of your customers are females in North America over the age of thirty, you can target your marketing campaigns to that demographic.
Additionally, this information allows you to begin tailoring to an individual by using their name, making recommendations based on location or gender, or providing promotions on their birthday.
Quantitative data is measurable data that helps you understand how your customer has interacted with your business. These are types of quantitative data:
- Transactions (purchases, returns, subscriptions, etc.)
- Online activity
- Social media activity
- Customer service information
Such information is important for understanding your customers’ behavior. This helps you further improve their experience and your marketing campaigns. If most purchases are driven by social media platforms, you may choose to invest more in social media marketing campaigns than in email campaigns.
In addition to campaigns, you gain more customer insight with which to tailor an individual customer’s experience. If you see that an individual customer is browsing your site for a specific type of product, you can direct emails, texts, or other ads regarding that product to them.
Descriptive data is additional data about an individual that expands your understanding of who that person is. It includes the following:
- Family information
- Lifestyle information
- Career information
Like quantitative data, descriptive data further your insight into your target customer, as well as into individual customers. It helps you understand what your customer is like outside their transactions with your business. You may determine that many of your customers have children. In that case, you could use that as leverage for marketing campaigns or, at an individual level, deliver advertisements for products that parents would be interested in.
Qualitative data is further information regarding the thoughts of your customers. It includes
- the customer’s attitude toward your business,
- customer opinions, and
- customers’ motivation for interacting with your business.
This type of information is invaluable to the customer experience as well as to marketing. Insights on customer attitude toward a new campaign can allow you to adjust in real-time. It can also help you to address customer satisfaction issues as they arise to ensure your customers are satisfied with your service.
What Customer Data Collection Methods Are There?
The first step to having a data-driven marketing strategy and personalizing your customer journey is actually collecting the consumer data. You have many collection methods to choose from, depending on which type of information you need.
Surveys, interviews, and focus groups
The first method is perhaps the most obvious: ask your customer for the data you need. Some ways to ask for data are surveys, interviews, or focus groups. When you’re using these methods, it’s important that you’ve identified what information you need and the best questions to ask to get honest responses from your customers. Reaching out directly to consumers for their opinions makes them feel as though you care about them. This can improve customer engagement, brand awareness, and loyalty while also improving your data.
In addition to asking your customers for data, you can also track your customer behavior and attitudes.
Tracking customer behavior has become very popular. It provides critical insights that improve marketing campaigns, the customer journey, and overall business performance. Online tracking is a perfect tool for data collection. When customers interact with your website, you have the opportunity to gain behavioral data.
When someone visits your website, you can ask whether they want to subscribe to emails or texts. This is where you can collect customer identity data even before having gained the individual as a customer. You now have a name, email address, phone number, and (potentially) other valuable customer data just by giving customers the option to provide it.
As the customer navigates your site, you can continue to track the items they view, what they add to their cart, what they purchase, and so on. All this transactional data can be analyzed to understand the consumer. It can be used simply to let the customer know they left something in their cart. Or purchase history can be used more broadly to understand what the customer is interested in and what they may purchase in the future. You can track the entire journey of the customer, which gives you insights into their preferences.
A review request is another way to solicit customer information. Once your customer has received their product or service, you can ask that they provide a review. This will give you qualitative data about a customer’s attitude and opinions about your service.
Online tracking is a tool that will provide invaluable insights, allowing for advanced customer data analytics, automation, and personalization. Using online tracking, you can identify customer preferences and build customer profiles to enhance the customer experience.
Monitoring social media
Monitoring social media is a great data collection method for gathering qualitative data, and it’s only growing in popularity. Consumers tend to be more forthcoming on social media and have more casual interactions with individuals and businesses. Social media monitoring gives you access to all information that customers have made public, including identifying information, descriptive information, and how they interact with your brand informally.
First of all, social media gives you a view of your customers’ lives. You may be able to identify information about their hobbies or followers that can be used to build their customer profile.
Additionally, by monitoring social media, you can identify how often your business is mentioned or searched for and what sentiments are expressed when people mention it. This gives you data on how customers feel about your brand, which can help you pinpoint areas of improvement or address customer satisfaction issues in real-time.
Many social media platforms provide you with analytics about how your posts perform. This third-party data can be used to inform your marketing campaigns across multiple channels.
When you launch marketing campaigns, you’re able to collect data on how consumers react to the campaign. Tools like Google Analytics let you track information such as who clicks on your ad, how many times they click on your ad, and more. These tools can also show you which devices people use when clicking on your ads. You can even track how often interaction with an ad contributes to a purchase. Data analytics on ad performance is valuable in understanding which ads your customers received well. The data can be used to tweak your ads, to identify which channels are most successful or even to redesign your campaign if need be.
Customer relationship management systems
Customer relationship management systems (CRMs) are types of software that, as the name suggests, help you manage your relationship with your customers. These systems focus on boosting customer retention, driving sales, and leveraging contacts.
CRMs function as ways to store, manage, and use your customer data to improve your business. To learn more about the benefits of ecommerce CRMs, read Sixteen Stats That Prove the Benefits of Ecommerce CRMs on The Ecomm Manager’s site.
What To Consider When Tracking Customers’ Data
As the saying goes, with great power comes great responsibility. When you collect all this data from your customers, you have the power to create personalized experiences for them, improve user journeys, and increase your return on investment. However, you will have the responsibility of protecting this data as well.
Regulations vary across the globe, which means that international businesses will likely need to consider alignment with a number of different regulatory bodies (for example, the General Data Protection Regulation, or GDPR, in the EU).
Your policy should include what personal data you collect and how you use it. It should also include who you share the data with if you share it with any third party. Your customer must have the option to opt-out of further marketing.
The general rule with privacy policies is to be transparent and ask for permission from your customer.
Tips and best practices
As regulations evolve, maintaining compliance can become overwhelming. Here are some things you can do to make sure you’re keeping your customer data safe.
- Data mapping categorizes data points into types that can be stored and used differently depending on how sensitive the information is or what it’s used for.
- Infrastructure best practices include storing data in a limited number of systems.
- Privacy by design can be built into customer applications with features that protect security, such as automatic logout and requirements for strong passwords.
Using customer data
The data you need to improve your business’s marketing and customer experience is right at your fingertips.
Data is the new oil, as they say. If you're eager to harness its power, you won't want to miss our definitive list of the best ecommerce CRM software available on the market today.
If you're excited to learn more, you should check this out: A Guide To Choosing Your Ecommerce Platform
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