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How to Use Data to Create a Better Customer Experience

Loyal customers spend more with you. Learn how to collect and use their data to earn a dedicated customer-base.

August 14th, 2017

1053

Elena Lockett



Your customer's Spotify account can suggest songs they might like, and their Netflix account advises them on which series they should binge on next.  You can collect and use this kind of data to delight your customers yourself. But how can your business do this? Here's our guide to what customer data is and how it can positively affect your business.

What is customer data?

Simply put, customer data is the information trail customers leave behind during their internet use, as well as feedback they actively provide to you (usually via surveys and questionnaires). You know those little cookie disclaimers that pop up whenever you use a website for the first time? Whilst we wish that the sites were offering us free food, those cookies are actually pieces of data. Any forms filled in, any buttons or links clicked, or any product pages viewed, they all create cookies that browsers store, and that you can use to optimise your customer experience.

Of course, there are certain limitations to what data you can and can't use. If you wish to collect data from your customers, you need to create a customer information privacy policy and give your customers access to it. Inside this policy, you should state who is collecting the specific types of data, how it will be used, and who it might be shared with (if at all).

Once you've sorted out all the legalities, you could just go barrelling in and collect any type of data you think could be useful. Or you could spend time thinking it over and selecting the right types of customer data that will best help you to assess and improve the service you provide.

The Types of Customer Data

Identity Data

This is data that helps you identify who individual customers are. You can find out where they're from, how old they are, or even what social platforms they use. It’s the kind of information that allows you to uniquely identify your customers so they’re not just ID numbers.

Descriptive Data

Once you know the basics about a customer’s identity, build up more details about them. This can be things like what they studied at school, the car they drive, or their marital status. You need this information to better predict your customers' spending habits. What will they buy? Where did they discover it? What else might they want with it? Armed with information like this, advertising is easier. 

Descriptive data helps predict spending habits

By segmenting your customer base - using your descriptive data - you can target specific groups of customers with adverts you know they'll be receptive to.

Qualitative Data

Qualitative data is typically gathered through questionnaires. It's information that isn't necessarily personal data but is useful nonetheless.  Examples of questions used to gain this type of data are:

  • “what was the reason for purchasing?"
  • "why do you prefer tea to coffee?"
  • "why do you prefer shopping online to in store?"

Qualitative data is almost better than descriptive data because it tells you more. It's the difference between knowing you have a lot of customers who drink coffee and knowing why they drink coffee. 

How to collect customer data

Real-Time Behaviour

Real-time data allows you to see how your customers browse your website and can be easily tracked by software like Google Analytics. You can use this data to provide suggested pages to customers based on their browsing behaviour. Have they spent a lot of time looking at jeans? Sending them an advert for summer dresses might not be the best move. Businesses who gather and use real-time data can quickly pick up on buying patterns, and predict customers' future needs before even they do.

You can also send emails to any logged-in customers if they do navigate away without making a purchase. These emails can be used to remind them of any products they were about to buy and even offer further incentives to complete their purchases, such as a free delivery or a voucher code.

Customer Service Operators

If a customer contacts you via one of your CS channels, they're providing you with the perfect opportunity to dig a little deeper into what they think of your business. Get your operators to conduct surveys about your products and services, and the rewards will be plentiful.

Asking operators to gather data can be beneficial in measuring customer satisfaction as well as other key performance indicators your business should be focusing on. If an operator solves the customer's query without asking for any feedback, you'll need to follow up with the customer at a later date to try and gather the data you need. Using this opportunity to get the data now avoids pestering customers later.

Use operators to gather data on your customers' opinions

Referral Source

Sometimes, businesses can get too caught up in tracking how people use their website and they forget to consider how they got there in the first place. If you understand which referral sources are working well, you can then work on improving traffic from other sources, or even just making those referral sources even better. For example, if most of your customers are coming to your website from Facebook, you should focus on improving your image on that platform. You could even invest in some paid advertising or focus more of your social efforts there.

Referral sources can also help you understand why an individual customer has come to your site. If you're a fashion retailer, and a customer has entered your site from a link on a fitness blog, it's likely they'll be interested in new exercise attire. By storing a referral source cookie you'll be able to show them recommended items from your active wear line, in tandem with any other recommended items from other cookies they've generated.

Run Focus Groups

Focus groups are a fantastic way of really getting into the why's and how's of your customers' experiences. Getting even a small sample of your customers in a room together can be invaluable. You can fire all of your burning questions at them, but – more importantly – you can encourage discussion. This can provide in depth insights about the CX you're providing and can sometimes bring up issues that no one had previously acknowledged.

Not only that, it's also a fantastic way of getting to know your customers. By running different focus groups with different segments of your customer base, you can probe into other topics that might link them. Talking with your top spenders? What kind of products are they buying? What after-care support did they need? Are the answers the same for your customers with a lower average spend per purchase?

It's important to remember that focus groups can be tricky to get right. And they can be expensive. Customers aren't going to walk through your door for nothing. Consider travel costs, refreshments, maybe even hotel costs. And that doesn't even cover the potential cost of incentivising people to volunteer. No one says you have to pay for these things, but it certainly wouldn't hurt. And that makes getting your focus group right all the more important. Make sure your participants are relaxed and happy, but that you're ultimately in control of the conversation. Remember: you're here for answers.

How does customer data improve your customer experience?

Identify customer pain points

Businesses who assume what their customers' pain points are could be leading themselves into failure. Customers use websites very differently to the businesses who design them, and will notice issues you've likely missed. Gathering information about their browsing habits and how they navigate your website can help you fix any issues in the sales funnel and improve their experience.

For example, recent studies have shown that cart abandonment lies between 60-80%, depending on the industry. Customers are getting as far as putting products in their basket, only to decide against ordering. That means a lot of money and resource spent getting them to that point in the sales funnel has been wasted.

Collecting data on why those customers aren’t completing their orders means you can do something to fix those issues. If you remove those hurdles, customers may become motivated to complete that purchase and buy from you again in the future. And, if the problem is technical, you can go a long way toward improving your CX. Less problems and bugs with your website equals less frustration on the customer's part.

Anticipate increases in product demand

recognise situations that could affect customer spending in real-time

Understanding your data can prevent a stock shortage that would cause potential customers to go elsewhere for a product they'd usually buy from you.

Making sure you have plenty of stock for your customers to buy means your customers won't get upset and their experience won't be tarnished. 

The beauty of understanding demand data is that you can see the geographic areas that the interest has spiked from, meaning you can move stock to locations that need it more.

Even just being aware of any real-time situations that may affect customers' spending can save a lot of money, and customer loyalty, in the long run. Say, for instance, a heatwave is forecast for the next week. By analysing historical buying patterns from when the weather has been similar, you can anticipate which of your products are going to be in higher demand. This can then be used to make increases on your normal stock orders, preparing for an influx of interest and preventing any loss of customers to other brands who were better prepared.

Personalise CX and get customers excited

It’s not enough these days to just provide a blanket app or website. Customers want to see that you’re trying to personalise their CX to meet their own needs and preferences. With 43% of customers sharing their information with businesses to receive deals, now is the time to make sure that information is being properly used.

Many platforms now allow customers to input their data to personalise their experience. A great example is the app MyFitnessPal. MyFitnessPal allows people to not only record the number of calories they consume, but also understand their nutrient intake better; it helps users become more incentivized.

And Asos are now allowing regular shoppers to input information about their height, weight, and how they like their clothes to fit. This allows them to offer future products that have their measurements in stock. Genius, right?

Techniques like this provide the personal shopping experience without the price tag, and can be replicated across a flurry of different retail sectors. Not only is this kind of data sharing beneficial to customers, it can also lead to those customers logging on more frequently, helping make them into loyal customers and brand advocates.

It’s one thing to run customer focus groups and create personas for what you expect customers to want and act like, but understanding what makes them tick is a different thing entirely. Data can help you understand your customers on a whole new level, one that makes them feel appreciated and gives you an upper hand on your competitors. Want to learn more about how we use our client’s data to improve their CX? Look at the many different types of reporting we currently do or send a message today for more information.

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