How to Collect, Manage and Extract Value from Your Customer Data
For a business of any size and operating in any industry, customer data is of top priority.
In today’s highly competitive world, businesses are required to be customer-centric, which in turn requires you to be able to collect, manage and extract useful insights from customer data and use the same to provide them with better products and services, and also improve their whole user experience.
Collecting Customer Data
A company can collect customer data from a wide range of sources. While most of these customer data collection methods involve the use of software, some of those processes tend to be really technical and others not so much.
In general, there are three different ways to collect customer data and a strong business strategy will include all of these: by asking them directly, by tracking their activities indirectly, and by adding customer data from other sources to your own.
One of the most obvious and straightforward ways to collect customer data is by monitoring their activities on your website and social media pages and extracting data from the same.
But, your options don’t end there; you can also use advertising techniques like location-based advertising (LBA), with which you can create personalized data profiles for your customers using the IP address of any of their internet-connected device, like smartphone, tablet, etc. The data you collect using this technique can then be used to provide location-specific ads.
In addition, you can also use some conventional and simple techniques like conducting online polls, putting down the comment cards, and obtaining feedback from your customers. But, remember to not take too much of their time during any of these processes.
Furthermore, you can also choose to purchase customer data from third parties and use them to benefit your business.
Managing Customer Data
Once you have collected your customers’ data, you should know to manage them properly, and here are a few effective ways you can follow:
✓ Collect Only What You Need
In most cases, companies tend to collect more customer data than they will ever need or use. Also referred to as data saturation, too much customer data can actually hamper your decision-making process by overwhelming you with a whole lot of information that you need.
In fact, it has been found that between 60% and 73% of all user data collected by a company goes unused. Also, cutting down on your data collection can help you cut costs and also protects the privacy of your customers.
✓ Use a CRM Tool
Using a reliable Customer Relationship Management (CRM) tool to manage all your customer data is now the most preferred method among businesses.
These tools make it easy for you to organize valuable customer data, while also keeping them safe, which is of utmost importance.
In addition, they offer features with which you can obtain different opportunities to improve your offerings, which they do by providing insights based on your customer data.
✓ Keep Data Up-to-Date
It is easy for customer data to become outdated, making the information you have inaccurate, thus affecting costs and more importantly, customer confidence.
Therefore, make sure that you always keep the data updated, and clean up data as and when required. This will leave you with accurate and high quality information about your customers.
✓ Back Up
Is your company prepared for data loss? If your business is an SMB, know that the chances of your business shutting down within just six months of losing valuable customer data is really high.
To avoid such instances, always back up the data you collect and have a data recovery plan in place as well.
Extracting Value from Customer Data
Following are a few strategies you can use to extract value from your customer data:
→ Personalized Interactions is Key
If you know that the frequency of potential repurchases is high in your business, you should focus on customizing your products or personalizing your services.
This is because this high level of customization or personalization gives you the opportunity to interact with individual returning customers repeatedly, as a result of which you will be able to collect significant amount of data from them.
You can use this data to differentiate your products or services, while also revising your business operations.
→ Offer Loyalty Rewards
Having a proper loyalty rewards strategy in place is another effective way to extract value from your customer data.
If the products or services you offer are quite uniform and cannot be heavily personalized or customized to meet individual needs of customers, or your products or services are purchased frequently, this is an excellent value extraction strategy you can use.
You can reward customers by analyzing their individual profitability, and this in turn will help increase customer loyalty as well.
→ Analyze Patterns
For any customer-oriented business, there are always some data that can be readily and easily extracted.
General patterns like the length of time your visitors linger on your website, the products or services purchased by them, the number of times an individual customer contacts your customer service, etc. can give you valuable insights on people’s buying preferences and habits.
Yes, many businesses do collect these data, but where they miss out is by not combining them together to be used for different purposes.
→ Use Social Media
With social media being widely used by almost everyone, you cannot ignore the fact that you can collect and extract value from huge amounts of data available on social media platforms.
From images to videos to documents, and a lot more, everything that gets posted on social media are all data you can use to find out where the market for your product or service is and what your potential customers are looking for.