If you’re new to the world of customer data, you’ll be excited to learn there are many different sources and methods of collection.
A lot of data collection occurs automatically from point of sale systems or marketing software. But, with the advent of big data and AI, methods of collecting consumer data are becoming increasingly sophisticated.
In this article, I’ll take a closer look at customer data and some strategies for obtaining it.
Why Collect Customer Data?
Data is useful. Actually, scratch that, data is crucial!
Customer data will likely form the basis of your marketing strategy and is instrumental for refining your customer experience.
Types of data include qualitative data, such as customer reviews, and quantitative data such as bounce rate on a landing page.
With the right analytics tools, you can drill down into demographics, customer behavior on your website, and gauge sentiment towards your brand.
Here's how collecting customer intelligence data is the key to success:
It tells you where your weaknesses are
You can use customer data to learn where you need to improve as a business. Sometimes, this data is pretty straightforward. For example, if you launch a new product and all of your customer feedback is negative, you know you have to make some changes.
Other times, though, this data is less obvious and you can only determine the root of the problem by diligently collecting data and digging into it. For example, if your website isn't converting after you drive traffic to it, using metrics like 'bounce rate' and 'time spent on page' can give you vital clues to help you calibrate your user experience.
It helps you identify your audience
Data is needed to help you identify who your customers are. For example, amassing enough personal data e.g. location, age, gender, from customers eventually allows for segmentation. From here you can adapt your marketing strategy to target specific demographics with more personalized messaging, helping to attract new customers and increasing the customer lifetime value thereafter.
Your competitors are using it
If you want to stay competitive, you have to collect customer data and put it to use. Odds are your competitors are aware of the power of data and are using it to make informed business decisions. The success of ecommerce giant Amazon is in no small part down to their use of data for to fine-tune their product recommendation engine.
GDPR Compliance Tips
Now for some fine print. If you work with customer data, understanding and complying with the General Data Protection Regulation (GDPR) when collecting sensitive information is non-negotiable. Here's what you need to know before you start collecting customer information:
- You need explicit consent: Under GDPR, you need to get explicit consent from customers before collecting, processing, or storing their personal data—meaning the customer has been given the option to agree or disagree, and has agreed orally or in writing.
- Be transparent: You must be transparent with customers about the data you collect, how you use it, and how long you will store it. You must also provide customers with a way to access, modify, or delete their data.
- Use secure storage: Personal data must be stored securely to prevent bad actors to get unauthorized access or data breaches. You should ensure that the data you collect is stored using technologies and processes that meet the highest security standards.
- Have a data protection officer (DPO): If your organization processes a large amount of personal data, it is mandatory to appoint a Data Protection Officer (DPO) to ensure compliance with GDPR.
- Report data breaches: You will be responsible to report any data breaches to the relevant authorities within 72 hours. You also need to inform customers of the breach if it is likely to result in a "high risk to their rights and freedoms"—in other words, something that could lead to damages like identity fraud, theft, or damage to their reputation.
- Conduct regular reviews: You need to conduct regular reviews of your data collection and processing practices to ensure that they are still compliant with GDPR.
Apart from being the ethical thing to do, taking GDPR compliance seriously is essential for building customer trust and ensuring the protection of personal data. As a customer experience professional, it is important to work closely with your organization's legal and compliance teams and stay informed on any changes to the regulations.
6 Ways To Collect Customer Data
Now that you know why you should collect customer data and how to do it legally, let’s take a look at how to go about it.
Remember, the more customer data you collect, the better the insights you’ll be able to squeeze out of it. So, while you don’t have to use all of these methods, you should consider using as many as apply to you.
1. Web Tracking
If you have a website you already have an excellent way to collect all kinds of data.
Every time a customer visits your website, they leave behind dozens of juicy data points that you can use. For example:
- What directed your customers there? Was there a particular ad they followed, or a mention on social media that garnered a lot of attention?
- Once they arrived, how long did they stay for and how many pages did they visit?
- Did they sign up for your mailing list?
Your website host or provider will likely already collect some of the information. Other useful tools are Google Analytics, Google Search Console, and customer journey analytics tools like FoxMetrics.
2. Transactional Data
Every time a customer makes a purchase you collect transactional data. A customer's transaction history is usually recorded automatically through your point-of-sale system or the platform you use to manage your website.
Transactional data includes things like purchases, returns, and payments, but it goes a bit beyond that. You can also collect data to track the keywords customers used to find the product they ultimately ended up purchasing, whether or not they went back and forth between products before deciding which one they wanted, whether they used a coupon code, and, if so, where they got it.
This information can be useful on a micro level to target customers when you think they might be ready for a rebuy, but also aggregating it and looking at the big picture stuff can be very useful in making decisions about products and sales.
Surveys are one of the most effective ways to collect explicit data directly from your customers.
One of the best things about surveys, for example customer satisfaction surveys is that there are so many ways to conduct them. You can ask people questions in person or over the phone, send a text, or email a link to a form. Some websites even use pop-up surveys for people who spend a certain amount of time browsing.
The downside to surveys is that there’s no guarantee that customers will respond to them. They’re easy to ignore. But, there are some things you can do to encourage people to give you feedback in this way.
First, timing is everything. Don’t send them too early. Give customers a chance to get familiar with your product or service first before you ask them for feedback. But, you can’t send them too late, either, because they might not have the same enthusiasm as they once did.
The sweet spot for timing a survey depends on what you’re selling. For example, if you’re selling a service, waiting two weeks after the service appointment to ask the customer to give feedback is probably too long. They aren’t likely to remember the little details.
On the other hand, two weeks is probably not long enough for most products since the customer will not have had a lot of time to experience them.
When customers respond, follow up with more questions if you can, especially when customers aren't satisfied. What could you do differently? Is one of your competitors doing something effective that you’re not? You won’t know for sure unless you ask.
4. Social Media
It’s probably no surprise that you can gather a lot of data (legally) from social media platforms.
Start by looking at your follower list. Who is drawn to your brand? The people liking, commenting, and following your socials are your target audience. Seek out more people like them to grow your customer base.
You can also collect information from your mentions. Set up alerts so you know when someone tags you or comments on something you posted. Look at the analytics about where and when your posts perform well. Does your brand do better on Facebook than Instagram? Are people starting to engage more with your YouTube channel? Where should you spend time creating content?
Most social media platforms provide this type of information for business accounts or ads. There are also plenty of third-party software options out there if you’re looking for more insights, for example sentiment analysis.
5. Marketing Analytics
One of the best things about tools many of the tools you use for your email marketing and advertising is that they collect so much information for you.
Depending on the platform you advertise on, and the software you use to manage your business, you typically have access to a wide range of information. For example, you can see who is responding to your ads, what time of day they’re clicking, what they did when they got to your website, and whether they were using a computer or smartphone.
The customer data you get from marketing analytics is so important because, when used appropriately, it can guide your entire online marketing campaign. And, the only way to work out where and when to spend your ad budget is to continue collecting data and making adjustments as needed.
Related Read: How To Remove Friction From Your User Journey
6. Subscription and Registration
You can often invite customers to share information with you by offering them something in return. If you want to get people to sign up for your newsletter, offer them an incentive to do so, something like a coupon code or special content that they won’t see otherwise.
Having a reward program is a great way to go about collecting data from customers. They have to provide you with basic information, like a name, phone number, and email address, and in return, they receive perks.
One of the best things about this method of collecting customer data is that it’s likely to lead to conversions. People who are willing to sign up for email lists and loyalty programs likely have a genuine interest in your brand.
The key here is to not overreach. Don’t ask for too much information because this can discourage people from signing up. On the other hand, if you don’t ask for enough information, you aren’t getting as much information as you could, which means it won’t be as useful to you.
Customer data is the key to continuous innovation. As you start to collect more, it will almost certainly be worth investing in customer relationship management software (CRM), or better yet, a customer data platform. These are indispensable tools that help you to manage customer data and make it easily accessible across your organization.
Data collection is a learning curve but one that must be taken by business owners who want to find ways to improve their bottom line. Have we missed anything? What strategies for collecting customer data have worked for you? Have your say in the comments below.