Customer data is your eCommerce store’s gold mine. Running an online company means you’re capturing lots of data from your customers by default, during transactions and delivery. When you collect and manage customer data responsibly and efficiently, the benefits that you unlock have a positive impact on all aspects of your business. 

Let’s see what customer data is, why it’s important for your online store, and what benefits it brings when you’re using it with a customer-centric approach in mind.

What is Customer Data?

Customer data represents the information you capture from your customers during their interaction with your brand on various channels. Customer data includes personal, demographic, and behavioral data that helps you better understand your audience, improving the way you communicate and engage with your potential and existing customers.

Online businesses capture plenty of customer data by default, but not all leverage interaction data’s potential to generate sustainable growth. Data management can be challenging without the right processes in place and without a customer data platform that offers a unified view of the customer profile.

The most important types of customer data are personal data, behavioral data, engagement data, and attitudinal data.

Personal data includes information like the customer’s name, birthday, phone number, email address, credit card details, and login details.

Behavioral data reflects information that is captured during the customer journey, such as product usage, average order value, cart abandonment data, and customer lifetime value. 

Engagement date reflects how your customers interact on various channels (website, email, social media), including information gathered from various data sources like website visits, social media post shares, and email open rate.

Attitudinal data includes customers’ emotions and perceptions about the experience they received from you, and this information is captured through feedback surveys, interviews, customer complaints, and reviews. 

Whether you collect customer data through website analytics, transactional information, customer feedback surveys, or another way, make sure you comply with the regulations that apply in the regions where your company operates and where your target audience is.

customer data

Importance of customer data

With so many competitors fighting for your ideal customers’ attention, one of the few differentiators is represented by the customer experiences you build around your products and services.

It’s tough to bring to the market a product or a service that is entirely new or to maintain a competitive price and still be profitable. In this context, customer data becomes extremely important for how you’re going to set your brand apart from the rest and create memorable experiences for your customers.

There are many alternatives for what you have to offer your clients, and customers have high expectations. The only way you can thrive in this customer experience economy is to leverage the potential brought by customer data.

One of the greatest things about collecting, analyzing, and leveraging customer data is that you can predict future customer behaviors and make better decisions based on what you already know about your customers. Your customer data is the fuel for creating smarter acquisition and retention strategies.

Benefits of customer data

Effective usage of customer data helps you improve the online shopping experience for your customers and fine-tune various processes in your company, generating a positive impact on your profitability and customer lifetime value.

1. Identify your most important customer segments

Your customer data allows you to segment your customer base and identify the most important customer segments for your company.

While demographic, psychographic, and geographic segmentation allows you to fine-tune your marketing campaigns, behavioral segmentation is one of the most reliable types for eCommerce businesses that want to achieve customer-centricity and focus on smarter acquisition and retention.

Many online companies use RFM segmentation to identify the most valuable customer segments, by looking at recency, frequency, and monetary value. You can identify the value for each variable by looking at the transactional data. You have to gather the RFM data, set a score for each value, and create customer segments based on their RFM scores. 

RFM segmentation will show you how many high-value customers you have and who these customers are. Then, you can dig deeper and perform qualitative analysis, create the ideal customer profile, and use it to inform all your eCommerce strategies.

> You can learn more about leveraging customer data for segmentation purposes by reading our simple but comprehensive guide on RFM segmentation.

2. Attract and retain more high-value customers

Once you know your most important customer segments, you’ll be more effective in attracting and retaining the right-fit customers. Recurring high-value customers are essential for sustainable growth, and you want to build your marketing and sales strategies around this type of customer.

Based on what you know about your existing top customers, you can create better custom and lookalike audiences for your paid ad campaigns and email marketing initiatives. Creating better target audiences allows you to use your budget wisely with a positive impact on ad performance and design better email campaigns for your marketing and sales goals.

If you want to improve customer acquisition, create lookalike audiences based on your best customers to increase your chances to attract new customers that are more likely to become repeat, high-valued customers. If you want to improve customer retention, you can create various custom audiences to fine-tune your onboarding, reactivation, and churn prevention campaigns. 

> Learn more about how to acquire and retain customers profitably

3. Improve onboarding to encourage the second purchase

After you have invested all the resources in attracting new high-potential customers, you need to nail the onboarding campaigns and make your effort worthwhile.

If you want to generate the second purchase, you have to ensure that the first customer experience is as high as you promised and as your newly acquired customers expect.

Your onboarding campaign must-haves are:

  • Thank you and email confirmation
  • Welcome to the community
  • Pre-delivery NPS
  • Educational content 
  • Shipping confirmation
  • Post-delivery NPS a couple of days after experiencing the product/service

In this phase, your focus is on preventing buyer’s remorse, generating positive emotions, and nurturing trust. All these elements increase the chances of receiving a second purchase from your first-time buyers. 

> Learn how to tackle onboarding campaigns from Valentin Radu.

4. Personalize the online shopping experience

Customer data, first and zero-party data, in particular, help you create personalized user and customer experiences on various channels. If you collect customer data and have the tech to create dynamic and timely content and recommendations, your customer experience level will increase, and you’ll see that people become more engaged with your brand.

Think of ways to collect customer data besides the information you capture naturally during a transaction. Find what they like and what they don’t, their needs and expectations, what they value most in a brand, etc. 

Try to create a standardized way to collect customer data and incorporate it into your tactics to improve personalization. Make it easy to collect for your team and integrate it naturally into how you communicate with your audience. 

Personalization is a strong tactic that you can use for your subscribers and potential customers to generate the first purchase, but also a vital element in the retention campaigns. You can’t think of VIP treatment without elements of personalization. 

5. Keep customers engaged between purchases to prevent churn

Customers don’t churn overnight. Before they leave you for good, there are a series of signals or red flags that you can observe in the customer behavioral data. Think about the customer satisfaction surveys, like NPS surveys. 

The answers that you capture from your customers represent authentic feedback about their experience and are a valuable resource for your churn prevention campaigns. Real-time response from your customer support team plays a vital role in preventing churn.

Another metric you should monitor is the average days between transactions or ADBT. The more days pass without a new purchase, the smaller the chances of receiving a new order from your existing customers. 

If you use RFM segmentation, it will be easier to track the dynamics of your segments and make sure you have as few at-risk customers as possible. Churn is, after all, natural for any company, but it becomes problematic when churn could have been avoided.

> Are your customers silently leaving your brand? Find what causes customer churn and how to stop it.

6. Have a unified view of customer data

A unified view of customer data helps your teams create seamless experiences with better interactions that keep the customers satisfied. From purchase to latest calls or conversations on chat, a centralized view helps your teams deliver the personalized interactions customers expect.

Data unification can significantly change the way your teams interact with your customers. The data that you capture in your customer data platform can be used by other solutions that you’re using for your eCommerce, like website personalization or email marketing automated flows. 

Creating dynamic customer experiences is extremely important for an online business, helping you differentiate through meaningful communication and recommendations when the customers need your help the most. Don’t let all that data go to waste when you have the tools to leverage its immense potential.

7. Improve real-time response based on customer data

When you sync your customers’ responses with your follow-up flows, you are more likely to generate a positive impact on satisfaction levels and retention rates. You need clean and updated data to make the most of those micro-moments and generate interactive experiences.

Think about the real-time response for your customer support team. If you act proactively on customer satisfaction feedback, you can avoid unpleasant situations that could ruin your relationship and lead to negative word-of-mouth.

If you identify the problems early, you have a higher chance of keeping that customer close and happy, although you just received a low satisfaction score. If you act in real-time, you can quickly change customers’ perception, by showing that you’re sorry for the poor experience, you really care about how they feel, and are committed to keeping up to their expectations.  

8. Leverage a unique set of data accessible only to your company

Building better customer relationships starts at the intersection of data management and marketing automation. You have more than a customer base – it’s a data set unique for your business.

The fact that third-party data has become less and less reliable isn’t necessarily a bad thing. What you know about your customers and is revealed by your first and zero-party data is way more valuable than third-party data. It’s a resource that your competitors can’t access, and only you can leverage to set your online business apart from the rest. 

Analyze customer data and identify the things that your customers have in common. Use this information not only to build exceptional experiences but also to create a strong community around your brand, a community that shares the same values and focuses on the same things. As Guido X Jansen said, “creating a community is one of the few unique things that competitors can’t copy.”

> Learn from Guido X Jansen how to use customer data to stay on top of competition and customers’ minds.

Wrap up

Many companies search for a customer data platform to improve their view and usage of customer data so they can create more effective marketing and sales strategies. 

Looking at all the benefits of using customer data, there’s no surprise that customer data platforms are so popular amongst eCommerce companies that want to become more customer-centric. 

Discover the benefits of using a customer data platform designed for eCommerce businesses.

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Frequently asked questions about customer data

What is the use of a customer database and its benefits?

Your customer database includes customer information that you’ve collected from your customers. By analyzing your customer database, you can identify who your best customers are, create better campaigns to attract more customers like them, and retain the existing top customers. The way you leverage customer data reflects in your profit margins, retention rates, and customer lifetime value.

What is the value of customer data?

The value of customer data lies in the optimizations you can generate for your marketing and sales efforts based on your better understanding of customers’ needs, motivations, preferences, and expectancies. What you know about your customers is accessible only to your business and you can use this as an advantage by creating unique customer experiences.

How can I collect customer data?

Customer data can be collected through various methods, including surveys, feedback forms, customer interactions, and social media monitoring. Surveys can be conducted online or in person, providing valuable insights into customer preferences and behavior. Feedback forms, such as those found on websites or in email communications, can also help businesses gather important data about customer experiences. Interactions with customers, whether in person or through customer service channels, can provide valuable information about their needs and preferences.