GDPR puts me in a tailspin and the thought of analytics makes me want to walk away from my desk and have a cup of tea instead!
Sounds like you?
Don’t worry – you’re not alone!
The thought of collecting customer data has a lot of people biting their nails and panicking about GDPR. For some, it’s enough to put them off entirely.
But, believe it or not, there are simple solutions for how to collect customer data (the easiest, by far, is to let Ketchup do it for you!). However, it’s just a matter of understanding a few tactics and some basic dos and don’ts.
Why do I need to know about collecting customer data?
“Data-driven organizations are 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times as likely to be profitable as a result.”
Gosh. It’s hard to argue with those kind of statistics. Why does collecting customer data have such an impact?
In short, data allows us to know the demographics, habits, preferences, and annoyances of our target market. It also gives us the means to get in touch with relevant audiences and take our focus away from people who aren’t interested in what we have to offer.
In this post, we’ll explore the uses of customer data, the best practices for data collection, and how to be compliant with the new GDPR standards.
Why should I be collecting customer data? How is it used?
OK, so customer insight can help my business grow. But how do I get it and how can I apply it to my business?
First of all, there are many ways we can use customer data to streamline and improve a business. Through our data collection, we can identify trends and patterns, know who is and isn’t engaging with our content, and find gaps in the market we can use to innovate and stand out from the competition.
So, what are some of the ways I can use my customer data
1. To better understand your audience
John has been posting his social media updates every morning at 7am because he thinks that’s the best time to engage with his target audience: teenagers. However, when John looks at his engagement data, he finds that he’s getting no readers at all.
He decides to change his approach and starts posting at midday. A little better, but still not the uptake he hoped for. The optimum time, perhaps, would be later in the afternoon or early evening for his particular target audience.
After looking at his competitors’ content and browsing some of the sites he knows his target audience will read, he begins to adapt the way he’s writing his posts. Suddenly, he’s getting results. Everybody’s reading.
Without analysing the data, John could have continued to go down the wrong path. He may have even believed it was his products or services that were the problem, when, in reality, it was his marketing approach.
By understanding our audience, we can implement a better marketing strategy.
2. To identify issues
John has had three complaints in the space of two months about his hard-shell laptop cover range. Several unhappy customers have taken to the net to complain about how fragile they are, posting pictures of the damage.
What does John do? He eliminates the hard-shell case from his range. Who knows how many other customers had problems but didn’t follow up?
Customers complain
We’ve all read negative Yelp reviews, seen the moaning social media posts, and heard the disappointing feedback. It can be discouraging.
However, there is value in those complaints. Every negative comment is a piece of data that can help you raise the standards of your business and meet your customers’ expectations.
Many customers will never complain and simply not buy from a company again when they experience a poor-quality product or service, so those that do take to the net – although they might really frustrate us at the time – are actually helping us to improve customer experience for other customers.
Those complaints helped John to resolve a problem he wouldn’t have known about if he hadn’t looked into them and seen the emerging pattern.
3. To find gaps in the market
John puts out a survey about his new Android phone cases to customers. Anyone who responds will be entered into a competition to win a £25 voucher for his store. The survey includes star ratings and spaces for comments.
Several of the respondents stated that they loved the durability of the case, but it was a bit chunky.
And so, the new Indestructible Slimline case was born. John promoted his new product, making sure to advertise that it was only 3mm thick. He had an immediate influx of orders.
They say that necessity is the mother of invention. When your customers point out what’s missing from their product or service, it gives you the opportunity to up your game and meet demand. This might help you stand out from competitors or simply boost your own sales.
4. To forecast sales
It’s time for John to place his next order with his manufacturers. But what should he get in this time? He really likes the comedy phone cases, and they’re cheapest for models X, Y, and Z. Maybe he should order a pallet?
He decides to review the sales data to give him some guidance.
He’s surprised to find that the comedy cases are his lowest-selling stock—even his favourite emo giraffe design! What’s more, he hasn’t sold a single model X case in the last three months. However, the model DX is up by 240%.
It’s a good thing he didn’t place an order based on his best guess. After all, data doesn’t lie.
We’re as shocked as you that the emo giraffe design wasn’t a best seller (or we would be if John and his phone case business wasn’t imaginary). The point is, even the most experienced sellers can be surprised by customer trends.
Data helps us make smart business decisions. When we identify patterns and preferences, we know how to move forward with our target market. This can help us make more financially-sound choices resulting in better outcomes.
5. To use promotions effectively
John’s been maintaining good sales rates on his website. The problem is, once a customer has made a purchase, they disappear. He has no idea which purchases are from repeat customers and which are from new.
He doesn’t know how often people are replacing their phone and laptop cases. Everyone checks out as a guest, and their details are lost.
He gets in touch with his web developer and asks that customers be required to make an account to purchase. Now he has the transaction history of his customers.
He monitors it for a year.
From this, he gets a list of his best customers, what they’re buying and how often. It gives him a better idea of how to market his products.
He finds that his repeat customers tend to buy a new case every 4-6 months. It gives him the idea to send out personalised promotions to customers four months after their last purchase with a discount code to use against a new case.
The number of previous customers making second purchases rises by 30% with the discount.
By knowing how his customers behave, John was able to predict their activity and encourage them to purchase with a cleverly timed promotion.
Data allows us to target specific demographics or consumer types at key times. It also provides guidance on which types of offers and promotions will convert to the highest volume of sales.
6. To guide our interactions with customers
John regularly sends out emails to his customer base. About 30% of the customers he sends emails to never open a message.
Data can be used to decide how to interact with our customers. For example, John has identified that 30% of those on his mailing list never open messages from his company. He could use this information to find new ways to approach this section of his client base; by using discounts or changing the method of marketing, for example.
7. To optimise our performance
A year ago, John changed his website. It happened to be at about the same time he lost a supplier for a popular product. Since then, sales on his site have dropped but he can’t determine if it’s due to the product change or the new website.
Certain data types can be used to improve the effectiveness or quality of our services and customer experience. In John’s case, he could use A/B testing (split testing) to have either his old or new website appearing at random to browsers.
By monitoring the activity of people on each of the sites, he can determine if there’s a preference for one or the other. If there was much more activity on his old site, he might be able to determine that it was the website change that caused the loss of sales. However, if the activity is the same or the new site is performing better, he’s more likely to put the drop in sales down to the loss of one of his product lines.
You should be collecting customer data
John’s fictional casing shop gives us several examples as to why collecting customer data is so important. These insights are invaluable to marketers, product developers, and business developers alike. They allow us to create targeted and purposeful consumer-driven campaigns. This helps us stay relevant and interesting to our audience.
All together, everything you could collect comes under the umbrella term of ‘big data’. Using lots of information to create better and more personalised customer experiences of your brand.
Huge brands, famously Tesco, create a single source of customer data. They do this using CRM software, or Customer Relationship Management. You don’t need to go that far, but there are many steps you can take in the right direction.
How can I collect customer data?
The important question! There are many methods of data collection, both qualitative and quantitative. Qualitative data gives personal insight from your consumers, such as complaints, suggestions, feedback, and praise. Quantitative data is usually numerical, such as site traffic statistics, transaction data, and sales records.
Some of the simplest ways to collect data are through:
- Surveys
- Newsletter and blog subscriptions
- Promotions, competitions, and offers
- Customer orders
- Transaction history
- Web-tracking
- Marketing analytics
- Social media
- Referral source.
Surveys
Surveys are an excellent way of gathering customer data in a way that’s transparent and direct.
Surveys can be introduced to customers at varied times …
- After a purchase
- As part of a competition
- When creating an account
- When signing up to a newsletter
- Through social channels
- During networking or at exhibitions.
Customers are more likely to engage with surveys when they see the benefit of responding. For example, when signing up for a new account, customers know they will receive more relevant news and offers if they give their personal preferences. Or a cheeky discount to encourage a response never goes amiss!
Newsletter and blog subscriptions
When customers sign up to a newsletter or blog subscription, it’s common for businesses to take the opportunity to take contact details as a minimum, including name and email address. They may also ask for information about preferences and interests.
This is beneficial to both the business and the customer. The business is able to create a more personalised service for their customer and the customer is able to avoid marketing and updates that aren’t of interest to them.
Promotions, competitions, and offers
The incredible power of a freebie! Many companies will run promotions, competitions and offers that require certain details to be submitted before a person can join in.
For example, if the business goal is to spread awareness of the brand, they may ask players to ‘like’, ‘share’, and ‘follow’ a post on Facebook or Instagram to be in with a chance of winning. If they are trying to gather your information, they may ask for a name and email as a condition of entry.
Customer orders
A certain amount of customer data is collected as standard when someone places an order. A full name, email address, phone number, and delivery address are the usual fields that are completed so a company can make a delivery. It also means they can contact the customer if any problems arise with their order.
Transaction history
A customer’s transaction history is a record of their personal spending habits and product or service choices. Transaction history data is useful in personalising marketing to individuals.
For example, you may offer better discounts to your best customers in order to maintain their loyalty. Or, you might send them an email reminder if it’s been a while since their last purchase.
Web-tracking
Web tracking is when a website stores information about site visitors, such as the pages they visited, and any purchases made. Some websites will use cookies to store customer preferences and browsing history.
Data gained from web-tracking can be useful in analysing consumer preferences and browsing habits. This can help you to improve your website function and streamline your marketing strategy.
Marketing analytics
Marketing analytics follows the online activity of site visitors. The point of marketing analytics is to determine whether your marketing strategies are effective. This is important to ensure your business is spending money in the right areas and achieving a high ROI. After all, you don’t want to spend a fortune on a marketing strategy that just isn’t working.
There are a host of marketing analytics tools you can use online.
Some of the most popular are:
Social media
Social media is a hotspot of consumer activity for both qualitative and quantitative data. It seems like everybody and their grandma has an account these days!
Qualitative data includes post content and reviews. For example, a customer might use your brand’s hashtag to praise your product online. #KetchupIsAwesome
Quantitative data includes figures such as the number of shares, likes, follows, or click-throughs you generate through your social content.
This information is low-cost and high-value. It can give a real insight into the type of content and promotions that engage your target market.
Referral source
‘Where did you hear about us?’
This is one of the most common questions asked when subscribing to anything online. Knowing how someone made it to your landing page gives a good insight into which of your marketing tactics are working. Perhaps it’s a high-quality backlink from another site; perhaps a particular post was really engaging. Maybe your previous customers are spreading the word.
Whatever the referral source, it’s good for businesses to know what is driving traffic to their site so they can invest more time and resources into this method.
GDPR
With big data comes big responsibility!
The sheer terror of compliance can have us backing off from important learning opportunities and customer insights. It’s true that no business can collect personal customer data without complying with the rules of GDPR.
It’s crucial you understand your responsibilities as a business and make sure you are handling your customers’ data with care.
However, GDPR isn’t as complicated as it seems. In fact, for all the jargon and complexity, it boils down to five simple rules.
What is GDPR?
The General Data Protection Regulation is an EU-wide regulation that came into effect on 25 May 2018. It prohibits businesses from using customer data in unlawful or insecure ways. In order to be compliant with GDPR regulations, there are certain guidelines all businesses must follow when collecting consumer data.
What are the GDPR rules?
There are five articles within The General Data Protection Regulation that comprise how a business must act in relation to data collection.
These are:
- Collection of data must be lawful, fair, and transparent.
- Data collection must be adequate, relevant, and limited to what is necessary.
- Data collected must be accurate and kept up-to-date.
- Data should not be stored longer than for the period it is required.
- Data should be kept secure and confidential.
How do I ensure I am compliant with GDPR?
To ensure you are compliant with GDPR, you must follow all the guidelines set out in The Guide to the General Data Protection Regulation (GDPR). It’s a long document, but it contains simple checklists for your business to monitor your own compliance and make any necessary changes.
The full document can be viewed here. You can also read our guide: Preparing for GDPR – 7 key steps for employers.
Let Ketchup help
Ketchup is home to a number of specialist marketing strategists. The key to being a successful strategist is having the ability to target the right audiences and review the success or failures of marketing efforts. We know how to safely and effectively collect customer data, and use it to drive sales.
We know our way around customer relationship management, and can help you to collect customer information in a way that is GDPR-compliant. What’s more, we’ll feed that data into our marketing strategy to get you the best results.
Let our team of expert web and print designers, copywriters, SEO specialists, PR Marketers, and branding professionals help you work more effectively with your consumer data.
If you’d like to find out more about outsourced marketing services, give us a call on 0115 671 3868
