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Monday, April 15, 2024

How Customer Data will Help Shape the Year Ahead

For every type of business, regardless of what industry it is in or what products & services are offered, the most crucial aspect is always the customer. The customer is always the soul of a business and has the ability to determine the success or failure of a company. As such, businesses realise that it is imperative to truly understand their customers – their likes, their dislikes, their preferences, their behavior – in order to stay on track and make good business decisions. One of the best ways to truly understand your customer is by taking advantage of customer data. This article takes a look at the importance of customer data for businesses and what emerging customer data trends we can expect to see over the next year.

What is Customer Data and Why is it Important?

Customer data typically refers to information collected about your customer that provide you better insights about themselves as well as how they are using your products and services. This includes behavioral, demographic and personal information that is collected in various ways – directly from customers, by indirectly tracking customers or by appending other sources of customer data. How you collect customer data requires a robust strategy, in order to ensure that you are getting the information that you really require.

Customer data is beneficial to businesses in numerous ways:

  • It helps in offering a truly personal experience: Customer data helps integrate personalisation into the services that you offer. For example, knowing a customer’s browsing history can help you provide personalised recommendations of more products that the customer might be interested in. Additionally, personalisation can also leave a lasting impact on your customer; a report released by Infosys states that 59% of shoppers agree that personalisation has the power to influence their purchase decisions. Source
  • Helps provide excellent customer service: Customer data provides a good look at your customer’s likes, dislikes and interests – which can help you enhance the customer service that you provide. For example, having access to their purchase history or previous complaints can help you engage with them in a more meaningful manner, allowing you to serve them quicker and better.
  • More effective marketing: Acquiring customers is expensive and without having adequate data, you could be wasting a lot of money. Having access to customer data helps you understand who they are and where they can be found, providing you valuable insights that you can integrate into your marketing strategy. These insights can help you determine what type of content you should be pushing, which channels your consumers can be found on and figure out the most effective way to communicate with them. Customer data also helps you better target individuals based on their likes and dislikes, to ensure your marketing budget is spent in the most efficient way possible.
  • Helps make better business decisions: It is crucial that businesses take customer perspectives into consideration when making important decisions. There is no better way to gauge the customer’s standpoint than with the help of customer data – which provide an objective and impartial look at the customer as a whole.

What are the Types of Customer Data?

There are different types of customer data that can be used by businesses. These include:

  • Identity Data: This is information that can be used to uniquely identify individuals – such as their name, address, telephone numbers, etc. Using this data can help personalise your communication.
  • Descriptive Data: This is any additional data that can help understand your customer and their habits better – such as family details, lifestyle patterns, career information, etc.
  • Behavioural Data: This information is gathered when customers interact with your business – helping you understand how they engage with your brand. This data can include the website pages visited, emails opened, etc.
  • Qualitative Data: This is additional information that indicate the customer’s overall attitude towards your brand, products and services and how satisfied they are. This data is generally gathered via means of online surveys or customer feedback forms.

What is Data-Driven Marketing?

Data-driven marketing is an approach utilised by businesses that uses customer information to optimise their brand communications. This strategy is a great way to help identify what works and what doesn’t – enabling faster decision-making and also providing better insights into consumer behavior.

Customer Data Trends to Expect in the Upcoming Year

A report by GlobalDMA states that 49% of marketers use data to enhance customer experience [Source] and that 64% of marketing executives “strongly agree” that data-driven marketing is crucial in the economy. However as the business landscape keeps evolving, there are a number of trends that can be expected over the course of the next year:

  • First-Party Data Will Be Used More by Marketers: As data privacy laws become stricter, we can expect to see marketers moving away from third-party data collection and instead tap into first-party data – collected on their own accord.

Higher Expectations for Personalisation from Customers: As more and more services are utilising customer data to personalise their services, customer expectations for personalisation are now higher than ever before. Data released by Epsilon’s Digital Transformation Team state that 80% of customers are more likely to purchase a product or service from a brand that provides personalised experiences. Source

  • Utilisation of AI and Marketing Automation: With rapid developments in technology, marketers are increasingly relying on AI and marketing automation to aid them with managing customer data. Ranging from capturing customer data to audience targeting to personalising website experiences to optimised ad bidding – investing in technology is becoming extremely popular.

What Should Marketers Focus on in the Future?

So this brings us to the question – what should marketers really keep an eye on, in terms of customer data? Below are a few tips and best practices for marketers to help improve their data-driven strategies in the future:

  • Use All Available Data Sources for Ad Targeting: Marketers need to ensure that they are targeting customers as accurately as possible. A great way to do this is by capturing all your customer data in a centralised location such as a CRM that lets you target them at every touchpoint in the funnel.
  • Segment Your Email List: Based on your end objectives, it is extremely important that you segment your audience – in order to effectively implement your email marketing in a cost-efficient manner. Segmentation can be done in numerous ways using customer data; based on their past purchases, their identification and so on.
  • Use Past Interactions to Personalise Website Experience: With customer expectations for personalisation growing, it is imperative to offer a dynamic website experience that is customised to the needs and past interactions of your customers. Take advantage of optimisation tools and adjust your website content to align with the interests of customers.
  • Ensure Other Teams are Updated: Make sure all relevant teams in the company have access to important customer data – as this is a great way to improve collaboration and better your problem solving capabilities. Though usually this data is managed by marketing teams – sharing it with sales teams, customer service teams and other personnel can greatly enhance your overall customer experience and in turn, your brand image.

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