How to collect customer data
The more detailed a picture you have of your target customers,
the more effective and targeted your marketing can be. And if you
know which individual customers are the most valuable, you can go
that extra mile to encourage them to spend with your
business.
This guide introduces you to various techniques and guidelines for
collecting data on your customers.
What customer data to collect
You need to collect as much of the following as
possible:
- Name and contact details:
- Allows you to market directly to them.
- Also lets you make communications personalised.
- You may also need to contact them if an order is running
late.
- Transaction history:
- Indicates user preferences - which products they're most
inclined to buy, when and how often.
- Reveals how valuable a customer they are: how much they spend
and how often.
- Communications from you to customers and any response they
make:
- You need to keep records of this to make sure you space out
your communications correctly (i.e. not too often).
- It also lets you monitor how effective different types of
communication are and which the customer best respond best to. If
you compare their transaction history with the communications
record, you may find one method of communication encourage them to
buy more than others.
- Profile: age, gender, profession, income, hobbies, and so on:
- This information is harder to obtain (see advice below), but
can be useful for more advanced marketing strategy.
- Once you have the info for a number of customers, you can build
up clearer picture of who exactly your target customer is.
- It allows you to better focus your advertising and marketing
efforts, as well as affiliate opportunities and sponsorships. If
you know your target customer goes to the gym three times a week,
it opens up a new place to advertise, a new line of gym-related
products and an opportunity to do a deal with the local gym to
offer discounted membership if they shop with you X number of
times.
- Knowing their age and profession (and so an idea of their
income) helps with pricing strategy.
- The better and more detailed picture you have of your target
customer, the more you can tailor and develop products to please
them.
- Spending habits: how your customers shops - such as impulse
buys, considered purchases, comparing the prices from different
businesses, always with you on a regular basis, and so on:
- You can display goods and structure deals around consumers'
spending habits - think of how supermarkets put magazines and
chocolate bars at the checkout: impulse buys.
- Can be difficult to assess - you may need the help of a market
research agency or detailed surveys with trusted customers. Or you
can try out different strategies and see which work. You can also
take an educated guess based on your knowledge of the market.
- Birthdays:
- Sending out a birthday text or card can add a personal touch
and make a customer feel valued.
- Whether or not they pay on time:
- This is obviously important for cashflow reasons rather than
marketing ones, but it's worth adding to the list anyway if you're
thinking about data collection.
How to collect customer data
- First and foremost, do not harass customers for data. Endless
form filling is enough to put a consumer off a purchase. Data
collection has to be either unintrusive or incentivised. Collect it
bit by bit to build up a fuller picture of your customer gradually
and in a non-annoying way.
- From orders:
- Obtain contact details and name from orders and begin building
a transaction history, whether on or offline (although online makes
things even easier as data can automatically be entered into a
database).
- You can add in a birth date as optional.
- If the transaction is happening online, you can add in an
optional section requesting more information. Phrase it in a way
that appeals to the customer, such as: "So that we can learn more
about you and provide you with a service more suited to your
personal needs, please fill in...." You can also use this technique
if a customer has to register an account with you at any
point.
- Surveys:
- If you run a survey on your business, you can obtain a fair
amount of information by asking details about their profile
(gender, age, etc). While some respondents may be reluctant to give
their name, some will. For those that don't, you get a clearer
picture of your overall target customer anyway, which is the aim
here.
- Competitions:
- Run a competition asking for email address and a couple of
other details - customers will be more inclined to share personal
data when they have something to gain from it.
- Online:
- Online can help you track spending habits and user preferences,
though you may only be able to get an overall picture of your
target customer rather than profiles of specific users - use Google
Analytics.
- Research:
- Statistics and research already out there can help you build a
more detailed picture of your target customer (though of course
they won't provide information on individuals).
- Look at demographic-related reports and spot trends. There's
almost certainly other people targeting the same demographic as
you, which means you can simply look at the research they've done
and any statistics on the matter to find out more about your target
audience.
- A market research agency will be able to provide you with the
most detailed picture of your target customer and their habits, but
this is quite an expenditure. You probably only need to go into
this much depth when you're marketing techniques are very advanced
- and you'll recognise your need for an agency as and when that
happens.
- Noticing things when you see customers face-to-face can of
course also give you a very general idea about who the bulk of your
customer are and what demographic and age group they're part
of.
How to store customer data
- Initially, you can store things on Excel or similar spreadsheet
software.
- But as your data becomes more detailed, you'll need specific
database software to manage your customer data.
- Ask a software and computer shop or supplier to recommend you
some software, explaining your needs both present and future to
make sure they provide you with the right level of complexity. You
don't want to end up with something either far too complicated or
far too basic for your needs.
- Make sure your data collection spans all different departments
and members of staff. Everyone should be contributing to the same
document. Use CRM software to manage this.
Guidance and the law on storing customer data
- There are complex laws surrounding business' collection of
data.
- See our guide on the data protection act to find out more and to
make sure you don't accidentally break the law.
- Make sure you ask customers' preferences when you take their
contact details. Allow them to opt out of receiving marketing
material - you don't want to get on the wrong side of them, after
all.
Jargon buster
CRM software: customer relationship management
software. Software that allows different departments and members of
a company to contribute to individual data files of customers, and
track their orders and so on without having to ask other members of
the company. An up-to-date, shared database of all customer
communications and transactions and other details.
Resources
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