What kind of customer data should you collect?
When customers give you their email addresses, along with other personal and financial information to make purchases, they are putting a lot of trust in you – trust that you will not abuse this by repeatedly spamming them or, worse, selling any of their information to third parties. And, if you should violate that trust, you will likely lose any repeat business from that customer.
So mindful are customers of these violations that many are now choosing to install ad-blocker software in order to keep their inboxes and all other pages to which they navigate free and clean of hawking and re-targeting. The latest study suggests that up to 26% of desktop users are now using ab blockers.
VPN (virtual private networks) is also on the rise. While exact stats are not available on how many consumers currently use VPN’s, Anonymster estimated that, by the end of 2014, about 5% of PC users and 10% of mobile users had VPN’s in order to mask their information.
Finding The Balance
There are lots of potential pitfalls when a business collects customer data. But if you do it right, you can get the data you need and keep your customers happy. Happy customers mean more revenue.
So, before you request information from customers, think through what you are asking for, why you are asking for it, when you are asking for it, and how might you gather that data in the least “threatening” manner possible. Here are 10 questions for you.
How important is it to collect personal data?
It is extremely important for your ability to develop relationships with customers after an initial visit to your site or a first purchase. You want to make certain they are satisfied with their purchases; you want to know if they have any questions about the product or service they have been looking at on your site; you may want to drive them to your social media pages or to your blog with some enticing posts; you may want to offer discounts or contests. And you have the ability to personalize the content and offers you provide to fit their wants and needs.
All of these things lead to more sales, if you are mindful not to be a pest.
What types of information should you gather initially?
Begin with only the basics. If you ask for too much, your potential customers will back off. A name and an email address may be all you need in the beginning. Mailing addresses are unnecessary – they go to the payment processor anyway when purchases are made.
What you want initially is a method of contact and a name so that you can personalize any messages you send. These two pieces will let you market to them, ask for follow-up feedback, and handle any issues with an order.
Once you have developed trust, you can dig deeper, a little at a time. Through customer surveys and requests for feedback, you can gather more demographic information – age, gender, etc. This will allow you to personalize even more and improve CX.
Do you need to keep transactional data?
Absolutely. You need to know your customers’ past purchasing practices – what have they bought, when did they buy those things (e.g. holiday seasons only?), how often have they purchased? All of this gives you the information you need to personalize offers for products or services in the future.
Consider how Amazon does this. Once you make a purchase, the next time you are there, you are provided with other offers and recommendations related to your past purchases. This is a great marketing tool because you are:
- Not invading your customer’s “space.”
- You are demonstrating that you are suggesting other items that may fill their unique needs.
- You’re not asking them to give you more information
How should you be collecting customer data?
Every time you interact with a customer, you should be thinking about what information you can ask for without seeming intrusive. Of course, if they call you, your phone system now has their phone number too. If they email you, you have that address; and sometimes, in the course of communication, you can ask for more information in a non-threatening way – some of the demographic information, for example.
How will you organize customer data and store it properly?
Get a CRM solution that will work for where you are right now and that will scale as you do. This will allow you to do so many things with your information. You can aggregate customers by any of their demographic traits, by their common purchase histories, etc. You can segment out for very personalized messaging and marketing.
And you can serve your customers much better to boot. When you can pull up every piece of information you have about a customer on a single screen, your customer service reps can give far more effective service to each customer.
How will you protect customer data?
Of course, you first line of defense is to encrypt it all. And if you don’t use a third-party payment processor that kicks in when financial information is provided, you have a serious obligation to protect credit card information.
Make sure you have a strong cyber security system in place. A lot of small businesses have been remiss about this, and hackers know they are. Lots of cyber criminals are moving into small business markets, because it is so much easier to get in.
If you are using a third-party to store any customer data, find one with a great reputation and that is long-standing in the business.
Are you taking care of the legalities?
There are laws about raiding other sites, etc. for personal customer information. Just don’t do it.
- What type of information you collect anonymously and personally
- Who is collecting the information
- How the information is stored
- How the information may be shared
- Method by which a visitor or customer can opt out of receiving any marketing content from you
- Make sure you are aware of any niche-specific regs. Anyone in the healthcare sector, for example will be bound by HIPPA regulations.
Is it ever a good idea to sell customer information?
Some companies do this and make money in the process. However, customer generally frown upon this practice, and most who are offended b it will leave and never come back.
How can I make the most use of the data I collect?
The best benefit to data collection today is your ability to personalize communications and marketing.
You can also use the data to help modify and refine your customer persona. And once you do that, you can develop content and offers that will be most engaging for them.
What are the mistakes to be avoided?
There are a few, yes.
- The most common is to ask for too much information up front. Develop a relationship first before you begin to ask too many personal questions.
- Another mistake is not organizing your data so that it is actually useful to you. Decide what you want your data to give you and then find the system that will do just that.
- Using the data to become a pest is a big “no-no.” Be moderate in your marketing efforts. If you bug people daily, they will simply spam you.
These 10 questions may give you some thoughts on how you can improve both your customer data collection as well as how you organize and use it. The key is to be as least intrusive as possible, be careful about what information you request and when, and honor your customers’ need for privacy and non-harassment.