Great customer experiences start with great customer data. According to Blake Morgan, CX expert and futurist, the customer experience has the greatest impact on your company’s growth and success. It’s what can boost revenue and give your organization a competitive edge. And let’s face it, given today’s demanding climate, everyone is looking for ways to get ahead.
To level set, customer experience (CX) is the sum of all interactions a customer or prospect has with your business over time. And your customers and prospects are making buying decisions based on those experiences, as well as the experiences of others that are shared on social media sites and in reviews. These experiences are captured in your data and within the systems and applications you use to run your business. And to consistently deliver great experiences across locations, channels and other interactions, you need to have great data.
If you know your customer’s products, relationships, preferences, habits and interests, and you make that information actionable across your organization, you can provide better customer experience. So, this begs the question — what exactly is customer data?
What Is Customer Data?
At its core, customer data is the information created when customers interact with your brand. Customer data can help you better understand your stakeholders so you can improve how you communicate and engage with them. This includes existing customers and potential customers.
While there is a significant amount of customer data that can be captured, not all may be equally valuable to move your business forward. The four most critical types of customer data are personal data, behavioral data, engagement data and attitudinal data. Let’s review how each can be used.
- Personal Data
This includes information like customer name, birthday, phone number, email address and payment details. This data can be used for contacting customers, sending marketing offers and determining household relationships.
- Behavioral Data
This includes information that is captured during the customer lifecycle. Some examples are product usage, average order value, cart abandonment data, consents given and frequency or recency of interactions. This data can be used to determine preferences, cadence of marketing offers and behavioral trends. It can also be used to measure customer lifetime value.
- Engagement Data
This includes how customers interact on various channels. Some examples include your website (i.e., what pages they visit), email (i.e., what emails they open) and social media (i.e., what posts they like or share). A physical bricks and mortar store is another channel where information can be captured. This data can be used to understand interests, analyze for journey mapping and help with the timing of sales offers.
- Attitudinal Data
This includes the attitude and perceptions about the experience the customer received from you. This data is usually captured in surveys, but can also be extracted from call center notes, chatbots, social media and other customer notes or communications. This data can be used to derive insights about sentiment, special events and lifecycle events. This information can also help with service or sales strategies, personalization and outreach.
Where and How Is Customer Data Collected?
Customer data can be found in many different places and collected in a variety of ways. Some examples include your website, mobile applications, product reviews, surveys, social media, marketing campaigns and third-party data providers. Other sources include:
Interactions with customers via customer service calls, sales visits or event
- Email newsletters and blog subscriptions
- Product transactions and purchase history
- Website tracking tools and form fills
- Customer relationship management (CRM) software
- Operational systems including billing, shipping and ordering applications
Customer data can be collected in real time and used in workflows or synchronized across the applications and teams that need access to it. Customer data can also be collected in batch for data that changes less frequently or may be less critical to operational activities that involve customer interaction.
Customer data is the foundation to a successful business strategy. Advanced organizations, especially in today’s demanding, digital-first landscape, understand that collecting and mining this intel can help provide better service, more relevant marketing communications and improved sales conversations.
How to Use Customer Data Analytics
Leveraging customer data analytics can help you gain the insights necessary to grow your business. Common uses of customer data include:
- Complying with new and existing regulations by analyzing your activities with customers
- Detecting fraud
- Improving customer experience by identifying where friction occurs in internal and external processes
- Determining the best location for an office, store, service center or warehouse • Identifying market trends early to create a strategy or tactic that can differentiate your organization, product or service
- Measuring and gaining insights into how your product is performing or being used
- Understanding behaviors and why market baskets might be abandoned
- Determining key metrics such as recency, frequency and monetary spend
- Optimizing your website based on clicks, pages visited, search activity, etc.
- Inferring attributes about customers and where they are in their lifecycle to align the optimal product or service to their lifestyle (e.g., you want to offer renters insurance versus homeowners’ insurance to a customer who doesn’t own their home.)
Departments that rely heavily on customer data include marketing, sales and service. These groups use data for predictive insights that can inform seamless cross channel experiences, guide next-best actions and report on what’s working and what isn’t.
It’s indisputable: customer data is just about everywhere. With fast-changing customer interests and behaviors, you can gain powerful customer insights that can help you with:
- Creating marketing campaigns and activities that improve marketing outcomes and conversions
- Prioritizing sales and offers with customers most likely to convert
- Discovering the best channels and touchpoints for conversion
- Resolving customer service issues and conducting proactive outreach to help reduce churn and boost loyalty
- Aligning corporate strategies changes in customer behaviors
So now that we know how to use customer data for a competitive edge, let’s discuss some of its common challenges.
Common Challenges with Customer Data
According to a recent Accenture survey, 95% of both B2C and B2B executives reported they believe their customers are changing faster than they can change their businesses. Simultaneously, many organizations face data issues that can slow down their business. This can include:
- Inconsistent, inaccurate or incomplete data. Unreliable data can create disruption within an organization. Some examples: Items are shipped to incorrect addresses; offers are delivered to former employees; and sales cannot reach the targeted person due to an incorrect job title or phone number. Plus, you can be creating strategies or making decisions based on bad data.
- Fragmented or siloed data. Many organizations struggle to understand where all their data exists. This can be exacerbated by the growing number of fit-for-purpose applications that have been introduced into the technology landscape. For example, a B2B marketing team may have 65+ applications within their marketing technology stack. And all may contain bits and fragments of customer data that should be stitched together. This can lead to missed opportunities, short-sighted decisions and increased storage costs.
- A lack of standardized processes. A lack of uniform protocols for customer data management can cause headaches. For example, date formats can cause confusion. Not knowing if 2/5 is February 5 or May 2 can be a real struggle when reporting results in a meaningful way. Not ideal in a fast-paced, demanding market.
What can help you overcome these challenges? Having a single customer view to support your analytics and operations. This can help you make decisions that can help you get, grow and keep loyal customers. Plus, having a single customer view at your disposal can be the difference of winning or getting left behind. Let’s find out why.
Why a 360-Degree View of Customer Data Is Important
To compete on customer experience and gain value from growing data volumes, organizations that want to stand out are creating an actionable 360-degree view of customer data. This will help empower marketing, sales, service and other teams that impact customer processes to:
- Quickly onboard customers and streamline information collection and sharing across channels, teams and lines of business
- Increase customer engagement by delivering personalized, targeted communications that are relevant to current customer needs
- Accelerate merger and acquisition benefits through better insights into customers and opportunities across combined businesses
- Build customer trust by acting on and complying with customers’ privacy concerns, preferences and consents across channels
- Ensure compliance with internal data protection policies and regulatory requirements, including those outlined in the Sunshine Act, KYC, GDPR, PIPEDA and more
- Positively impact business goals by understanding customers’ relationships and networks of people, places and things
It’s clear having a trusted, 360-degree view of your customers can help you optimize the customer experience, grow mindshare and build loyalty. And Informatica can help.
How Informatica Customer 360 Optimizes the Customer Experience
Understanding your customers and their evolving expectations requires a single, actionable, 360-degree view. Having an enterprise customer data strategy supported by an intelligent data management cloud — one that begins with acquisition and extends from successful onboarding to relevant ongoing engagement — can give you that winning edge.
A service of Intelligent Data Management Cloud (IDMC), Customer 360 empowers teams with a trusted customer profile: a consistent, complete and current single view of customers. It pulls together customer data, including their preferences, products, households, channels and relationships. It centralizes the availability and management of data and publishes trustworthy data to the applications, processes and teams that rely on it.
Customer 360 is a modern, all-in-one application that fixes, masters and manages customer data on a cloud-native master data management foundation. Customer 360 helps fuel your business and analytical applications with clean, consistent and complete information. This 360-degree view of customers can be easily accessed and used by business analysts and data scientists for reporting, analytics and AI models. This means your organization is on the same page about your customers so you can provide the ultimate customer experience.
Ready to learn how your teams can use customer data to help enhance experiences? Learn more about Customer 360 and check out the below resources:
- Find out how to create customer experiences that matter with trusted data insights.
- Get the definitive guide to creating and using great customer data to deliver great customer experiences.
- Build a successful business case for enterprise customer data management.
- Create and manage a successful CX data strategy.
- Master business transformation with multidomain MDM SaaS.