What you need to know about collecting customer data
Know your audience.
That’s time-proven advice whether you’re a writer, actor, politician or business owner. The more clearly you can define your audience – or the customers who will buy your products or use your services – the greater success you’re likely to have in all aspects of your business.
The best way to get the goods: data collection.
According to an article in The Economist, consumer data has replaced oil as the world’s most valuable resource. What you learn about your current and potential customers can help you target your marketing, improve your inventory process and even help you expand your business.
Every business, large or small, generates data. If a business has a website, a social media presence or accepts any kind of electronic payment, it has customer data. It’s what a business chooses to do with the data that creates a competitive edge.
Here are some ways you can make the most of the data your business collects.
Set goals. What do you hope to achieve through the data you acquire? The information you need to develop an email list differs from data to help you upsell well-heeled customers. Many businesses collect more data than they need, creating wariness in their audience and headaches for the people who have to analyze all that data. It also creates the need for extra security for data you may not even need. Don’t collect data just because you can.
Create a central database . You will paint a better picture of your customers if all the information you gather is in one central location, rather than siloed off into different sections or departments. Consider investing in a customer relationship management (CRM) tool – software that keeps your data organized and in one place, lets you track customer interactions, and presents a unified view of your customers that all divisions of your business can access.
Keep it clean. Data is a valuable tool for understanding your clients and the market, but not if it’s out of date or inaccurate. Make cleansing your data a regular routine and check for changes in contact information, customer preferences, and those who have unsubscribed from an email list. Remove duplicate information and make sure the format for all data remains consistent. Automated data validation tools can be integrated with your CRM, making it easier to keep your information clean.
Back it up. Your data will not be valuable if you lose it. According to Washington D.C.-based research firm Clutch, 58 per cent of small to medium businesses are not prepared for a data loss. Further, the firm found that 60 per cent of SMBs that lose their data shut down within six months. If you collect data, you need a well-guarded back up and recovery plan – not only for your own wellbeing, but to ensure your customers’ information is safe, and they view your organization as reliable and trustworthy.
Secure it. As a number of recent high profile data breaches have underscored (here’s looking at you, Facebook ), security is everything. Security means you don’t lose data and you don’t get hacked or fall for scams that put your customers’ information at risk. A solid security plan includes:
- Maintaining several separate backups;
- Using protected passwords, encryption and biometric systems to restrict access to sensitive information; and
- Regularly auditing information to catch any data leaks or anything out of the ordinary.
Managed properly, data can be a business owner’s best friend. Treat it carefully and you can build a strong client base and a world of opportunity for your business. Play it fast and loose with private information and you will lose customers, your good reputation and, quite possibly, your business.