Importance of Data | Why is Collecting Customer Data Important for Business?
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There are many technologies that businesses of all sizes can use to collect and analyze data to improve customer revenue and experience. Not only do these technologies help automate the part of the business that stays long, but they also help bridge skill gaps because not all business owners are skilled data analysts.
The more technology a company uses for key processes, the more data it collects. Analyzing this data can reveal key patterns and trends that you can take action to increase customer retention, increase sales, and profits.
When it comes to data insights, the opportunities are endless, depending on your strategic obligations and the results your business demands. Here are some data analysis tips to keep in mind.
Understand the customer
Data gives businesses a complete picture of their customers. What to buy, why to buy, how to shop, why to choose a different brand, and what to buy next. Understanding the above will allow you to better interact with your customers while staying one step ahead of them and their purchasing behaviour.
There are three main types of data that businesses can collect with varying degrees of usability.
It is collected when customers interact with your business, including personally identifiable information, demographics, locations, and shopping preferences. They need to be accessible from a customer management system (CMS) and require some basic analysis to generate valuable insights.
Engagement and behavioral data:
They are collected when customers interact with your website, newsletters and digital touchpoints, including paid advertising. It allows you to analyze how they move around your site and the time spent doing so. The above can be done for free via Google Analytics but can be further analyzed using a paid platform.
This is another layer of information gained by attracting customers and requesting information, such as specific brand surveys or product and service reviews by the Net Promoter Score (NPS). This score measures a customer’s willingness to recommend your product or service to others (-100 to 100). To enjoy the benefits listed above, you need to be actively involved with your customers through direct contact or a customer experience program.
Entrepreneurs can do much with the data they collect without the need for the skills and knowledge of a qualified data scientist. One option is to identify and monitor changes and behavior patterns. By analyzing how demand for products and services changes over time, you are more likely to understand the causes of these changes and predict them in the future.
By overlaying this customer behavior data with external trend data from platforms like Google Trends and associating it with simple things like times, economic conditions, and even weather conditions, businesses can summarize the details of potential customers.
Data can also optimize business processes and day-to-day operations. Business processes that generate data, such as production lines, delivery systems, and sales orders, can use it to increase efficiency.
For example, retailers can optimize inventory levels based on the forecast model described in the previous point, allowing the most relevant inventory to be stored on the shelves at the right time to increase sales and improved customer loyalty.
The data shouldn’t just be your acquaintance, it should also be the basis for any major or minor business decision you make. If you use it right and keep it safe, your customers will keep coming back!
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