Customer data is invaluable to your business: It can inform your marketing, sales, customer service, and product development. However, accessing that data, extracting usable insights, and leveraging those insights takes effort. Here’s how to be strategic about finding and using your customer data to support your business.
Start with first-party data
There are three different types of data: first-, second-, and third-party data. First-party data is that which you collect directly from your customers, website visitors, and social media followers.
First-party data is perhaps the most valuable type of data as it relates directly to your target audience and existing customers. “According to Think With Google and Boston Consulting Group, brands that leverage first-party data in their marketing functions achieved a 2.9X revenue lift and a 1.5X increase in cost savings,” reported Salesforce.
First-party data can be extracted from your website analytics, customer relationship management system, loyalty program, and social media channels. Use tools like Google Analytics and the analytics built into Facebook, Twitter, and Instagram to learn more about user behavior. Track comments, mentions, and brand sentiment to understand customer perception and engage directly.
[Read more: Need Some Feedback? How to Conduct Customer Interviews and Focus Groups]
Your customer data can provide a North Star for sales, customer service, product development, and even recruiting.
Complement first-party data with second-party sources
Second-party data is that which you obtain from a source other than your company’s direct data collection. When used in combination with first-party data, you can start to build a more complete picture of your target customers.
“The difference is that second-party data can offer you a new perspective on your customers. You may uncover trends or patterns you overlooked or didn’t include in your own search, helping you spot customer needs or interests that you can further incorporate into your business processes and products,” wrote HubSpot.
Second-party data can come from one of your partners. For instance, a media publisher may sell second-party data to its advertisers. Or a grocery store may sell its customer loyalty data to a credit card company. Make sure any second-party data you obtain is compliant with privacy regulations.
[Read more: 3 Ways Amazon Ads Can Help Grow Your Business]
Third-party data is much broader: It refers to industry trends and consumer reports. While this information is interesting, it should play less of a role in your business strategy. Integrate third-party data if you’re a new business that hasn’t generated enough insights about its audience yet.
Create a data product
The data you collect from your website, social media, customer feedback, and other sources can help you design better marketing campaigns, customer service experiences, and sales outreach.
The experts at Harvard Business Review recommend bringing all of these data points together to create what’s known as a “data product.” This is a ready-to-use set of data that different teams in your organization can easily access and apply to their daily work. Think of it as a high-quality customer persona that can guide and sync the work of all your teams.
“It might, for example, provide 360-degree views of customers, including all the details that a company’s business units and systems collect about them: online and in-store purchasing behavior, demographic information, payment methods, their interactions with customer service, and more,” wrote Harvard Business Review.
Bringing together your data in one profile allows all the parts of your organization to apply their skills in service to one business goal. Your customer data can provide a North Star for sales, customer service, product development, and even recruiting.
Putting your data to work
In practice, here are a few key activities that your customer data can help improve:
- Segmentation and targeting: Divide your audience into groups based on shared characteristics for personalized marketing and offers.
- Personalization: Tailor website content, email campaigns, and product recommendations to individual customer preferences.
- Predictive analytics: Leverage data to anticipate customer needs and churn risk, proactively offering relevant support or incentives.
- Marketing optimization: Analyze campaign performance, identify winning strategies, and refine future efforts for better results.
- Product innovation: Use customer feedback and usage data to inform product improvements and new features.
As you continue to grow your business, make sure you store customer data securely and always get consent to collect the information you need. Be transparent about data collection and usage purposes to avoid any reputational risk.
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