Why customer data is so important to your business

Why customer data is so important to your business

What’s the first thing that comes to mind when you hear the word “island”? Holidays? Sun, beach and sea? Or maybe – islands of data and customer data? Unfortunately, the islands don’t have such a good reputation when it comes to handling customer data. Those affected even have real island fever.

Why? Imagine the following situation: A customer complains your hotline in the event of a defective product. Your support correctly records the process in their ticketing system. Shortly after, your sales force is standing on the mat with said customer and wants to sell something. The problem: Lack of visibility into important customer data. The co-worker didn’t notice the ongoing complaint and made an avoidable mistake.

What is customer data?

Customer data is all the information about a customer that a company collects. Often personal data is usually generated during the interaction with the person. For example, the e-mail address when registering for the newsletter, the address when shopping online or the interest in certain products when a user puts them in his shopping cart.

Why companies collect customer data

There are many reasons companies benefit from collecting customer data:

Optimization of marketing and sales activities

Based on the collected customer and prospect information, marketing and sales can gain important insights into the needs and characteristics of the target group. Based on customer data, you can plan targeted measures.

loyalty of the clientele

With personalized measures that specifically meet the needs and wishes of your customers, you strengthen their loyalty.

process improvement

How long does the customer journey take? Where are there hurdles where interested parties often jump and don’t become buyers? You can use customer data to discover optimization potential here.

increase customer satisfaction

With the collected data, you can improve your service and thus increase the satisfaction of your customers.

product development

Complaints and complaints pile up for a certain product? Take the opportunity to further improve your products.

What types of customer data are there?

customer master data

Customer master data is socio-demographic customer data. This personal data is collected from every company that has customer contact, both online and in traditional retail. Here are examples of customer master data:

  • Company information (in the B2B space)
  • Last name
  • address
  • E-mail address
  • phone number
  • Date of Birth
  • genre

Behavioral and tracking data

Customer behavior data informs not only about a customer’s buying behavior, but also about their preferences (preferred products, communication), interests and price sensitivity. They are easily measurable and can be collected when interacting with customers. Examples are:

  • revenue per purchase
  • number of products
  • preferred payment method
  • frequency of purchases

While behavioral data may also be collected in-store, tracking data is collected when using apps or websites. This online behavioral data can be used to build highly accurate customer and user profiles and improve the user experience and customer journey.

  • sessions
  • session duration
  • pages viewed
  • wanted products
  • clicks
  • Products added to cart but not purchased

Psychographic data

Psychographic customer data provides information about what your customer is thinking and feeling. They must be derived from qualitative surveys and surveys. Including:

  • personality and values
  • emotions
  • Reactions to messages and content
  • Belong to a certain social group

How do companies collect customer data?

Every business has different customer touchpoints where they can collect customer data. For instance:

  • Purchases in a retail store in connection with customer cards or loyalty points schemes
  • Sales talks at trade shows
  • Buy in the online store
  • Newsletter Sign-Up
  • Requests via the website or by phone
  • Upload content to the site
  • Registration for events or contests
  • service requests

Do you remember the example from the beginning? Here, the sales department did not have access to the service’s customer data. Conversely, the sales data is probably not connected to the customer service system either.

Almost all companies now collect customer data digitally. However, these data silos remain a major challenge in managing customer data. More and more companies are replacing their Excel lists of customer data with professional CRM systems. All data is stored centrally in a CRM and customer analyzes are performed.

What customer data is important?

How are companies supposed to best advise and understand their customers if they never see customer data holistically and therefore cannot use customer insights? A CRM system for all users is the ideal solution. So everyone gets the much-vaunted 360-degree view of the customer. But companies are not green fields. Typically, there are various legacy systems that have developed over the years and cannot be replaced without a lot of effort.

According to the study conducted by IDG Research Services and ADITO 2019, only 21% of companies surveyed have access to data from other systems important to customer service. For example from ERP, marketing automation tools or other solutions.

The good news: all customer data can be deeply integrated despite existing islands. As often, you first need a clear strategy. Define the information you absolutely need in your daily work with the customer – whether in sales, service, marketing or purchasing. Follow the Pareto principle.

To decide what customer data should be collected, ask yourself: what data from which systems should your employees have one-click access? Which customer analytics are relevant to you and what data do you need for them? And what information is only of secondary importance?

Which platform is best for collecting customer data?

As the next step, you need a platform that supports all modern technologies and gives you convenient, integrated access to the most important data. For example from your ERP, DMS or ticket systems. An xRM – i.e. any relationship management system – is best suited for this.

The advantages of an xRM are obvious:

  • The software displays detailed customer profiles with information merged from other specialized applications.
  • Employees can access data from all departments.
  • Customers receive the desired information as quickly as possible.
  • Employees work comfortably with a single interface.
  • The entire contact history can be recorded and documented without interruption.
  • The corresponding customer data is neatly integrated via an interface.
  • If further research is required, the solution provides direct access to the specialized application with the click of a mouse.
The example of Vallox, which uses CRM for better customer management, shows how these advantages work in practice.

Conclusion: Customer data is important to your business

The island frenzy in customer management can be successfully overcome with a pragmatic, user-friendly and proven integration solution. Don’t be put off by the amount of scattered data. Prepare a clear strategy based on the Pareto principle and find the right system solution to make all relevant customer data quickly and easily accessible to your employees on a single platform. Modern CRM systems can be used to perform customer analyzes and identify potential for optimization in your business. This ensures greater customer satisfaction and loyalty, which also increases sales for your business in the long run.

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