It’s a cliché but knowledge is power and that’s certainly the case when it comes to your customers.
In a survey by Econsultancy and Adobe, sixty-five percent of companies said that improving their data analysis was key to improving the quality of their customer experience.
In this article, we’ll look at 4 key types of customer data and how you can leverage them to provide a better customer experience and take advantage of new opportunities.
What Is Customer Data?
Customer data is any information that you have about customers.
It can be collected from multiple touchpoints and the goal is to produce actionable insights and ideas for experimentation.
At the highest level, data comes in two types:
Quantitative data – data sets comprised numerical values related to quantifiable metrics. An example would be the percentage of customers who have renewed their subscription this year.
Qualitative data – non-numerical data. Observed and recorded from sources such as reviews, interviews, focus groups and surveys. An example would be “great customer service.”
Much of the data you collect will be first-party data i.e. personalized data that you collect yourself. You can also purchase second or third-party data collected by other companies on your behalf.
With the advent of big data and AI, data collection is now becoming increasingly sophisticated with more granular insights.
People’s online activity is mapped into little data points ready to be drawn into your brand’s orbit. However, as we’ve seen with the implementation of GDPR in Europe, it’s important not to overstep the line here.
4 Types Of Customer Data
When it comes to data, the more the better. Regarding customers, there are four types of data you can collect.
1. Basic or Identity Data
As the name suggests basic or identity data is pretty meat-and-potatoes.
Name, phone number, email address, LinkedIn profile, as well as gender, income, and industry are all examples of basic data.
On its own it’s useful but, when enough basic data is collected, you can start to piece together the demographics of your customers. Demographic data is useful because you can use it for customer segmentation, or grouping customers based on shared attributes.
2. Engagement Data
Engagement data shows how your customers engage with your brand across the various touchpoints.
One example would be how customers are interacting with your e-commerce website. Another is how often they like/share your posts on social media.
This type of data is also called interaction data because, at its core, it measures how customers (and potential customers) interact with your brand.
Usually, this is applied at a macro level, zooming out to assess click-through rates or how many shares you’re getting on social media.
3. Behavioral Data
Many people lump engagement or interaction data and behavioral data together, and the differences between the two are very nuanced.
Behavioral data focuses more on the way the customer interacts with your service or product directly. It includes things like purchase history, abandoning shopping carts, and renewing subscriptions.
Who’s following through with making a purchase or signing up for a subscription service? Who isn’t? Why not? Looking at this data can help you figure all that out.
4. Attitudinal Data
While the previous types of data are more objective, attitudinal data is provided by customers as a first-hand opinion about what customers think about your brand, product, or service.
There are many ways to collect this data. Some you have a little more control over, like surveys or comments from interactions with customer service, while others, like online reviews, are completely out of your hands.
The main issue with this type of data is that it’s harder to assess. Why? Because not every customer shared their opinion in the same way at the same volume.
If you have multiple five-star reviews that are short but sweet, do they outweigh one lengthy, scathing one-star review from an angry customer? What about all the customers that don’t leave a review?
This is precisely why it’s so important to seek out all customers and encourage them to leave a review.
Putting Customer Data To Use
Now that you have a better idea about the types of customer data you can collect, you might still be wondering how you can wield it to your benefit.
Here is how you can use customer data to take your business to the next level.
Customer data can improve your marketing efforts considerably.
You can leverage your data to learn who your customers are and figure out the best way to reach them. By aggregating basic descriptive data, for example, marketers can create specific strategies to target these demographics.
Who is your ideal customer? Young, single people? Career-driven women or married men with families?
Once you know who your target audience is, you can start fine-tuning your marketing strategy accordingly. Simply, you’ll be able to hit the right people at the right time, lower your customer acquisition cost, and increase lifetime value.
Improve the Customer Experience
There are a few ways to use customer data to improve the customer experience. Dig deep into engagement data to figure out people are interacting with your website.
Are they looking at the first page and leaving quickly? Is there a particular section that doesn’t attract any traffic? By collecting data on customer behavior on your site, you can find ways to improve the customer journey.
Another approach is to examine attitudinal data you get from customer reviews, surveys, and social media to see where you can improve your product or customer experience.
Figure out where there are problems and take their advice about how to fix them. For example, maybe your product is amazing and your customers love it, but the website is difficult to navigate and they have a hard time knowing where to look for their favorite items.
Generating more sales is the ultimate goal, but how can you use customer data to do it?
The strategies we’ve already mentioned, when implemented correctly, are likely to increase sales.
If you target the right customers with ads or through email marketing, they’re more likely to make a purchase. If you improve the customer experience, more people will purchase and your retention rate will improve.
Your sales team can also put customer data to good use, using it to adjust the pricing or create new products personalized to customers.
Customer Data Management
Customer data, both quantitative and qualitative, is often stored in a customer relationship management application (CRM) where it can be utilized by multiple departments.
Data is often collected and stored by your web platform, email marketing provider, and social media platforms. As there is now so much data from multiple sources, customer data platforms have started to enter the market.
These are like souped-up CRMs that allow companies to more easily collate disparate consumer data and offer greater personalization off the back of it – for example which department should ‘own’ the customer, sales, or marketing?
Is Your Business Ready For Customer Data?
So there you go, if you didn’t already you now realize the awesome power of data.
Digital marketing relies heavily on data for optimization and reducing customer acquisition costs. You can also be utilized to improve your customer experience and boost sales.
To paraphrase Winston Churchill, think of data collection as your “geese that lay the golden eggs.”
Some further reading to help you collect these golden eggs: