By Jenna Puckett, TechnologyAdvice
Imagine you’re shopping online and find the perfect book. When you click to order it, a message pops up to warn you that you’ve previously purchased the same book. It asks: “Are you sure you’d like to buy this book again?”
That’s exactly what happened to Don Peppers, a leading authority on customer-focused
business strategy, while shopping on Amazon:
“It wouldn’t have been untrustworthy for Amazon simply to sell me the book I was ready to order — it wasn’t Amazon’s mistake, it was my mistake.
But because of the data Amazon has access to, it was able to help me avoid making a mistake. Its database’s memory of our past transactions was obviously better than mine. Amazon used that to gain my trust, which is going to be worth a lifetime of goodwill, recommendations, and loyalty.”
This is just one example of how companies are responding to customers in the Information Age. Until businesses can literally get inside the heads of their buyers, accessing their behavioral data is the next best thing. Collecting, segmenting, analyzing, and leveraging customer data is instrumental to creating experiences — marketing or otherwise — that delight consumers. Having the data to personalize experiences for customers is a competitive advantage.
The Importance Of Customer Data
Data can help businesses understand their customers, meet their expectations, and better serve them. Unfortunately, the biggest issue generally isn’t a lack of data, but the inability to glean insights from current resources.
Customer loyalty programs are one of the most popular ways companies collect vast amounts of data.
However, if you don’t have one, there are still additional data streams available: Social media, website, point-of-sale, email, and more.
Once you have customer data to examine, here are some of the ways you can leverage it to make intelligent, fact-based marketing decisions.
1. Calculate the lifetime value of a customer: In the broadest terms, the customer lifetime value (CLV) is the monetary value of a customer relationship. Calculating the CLV of a customer can be a powerful way to assess marketing priorities.
It tells you the projected revenue that a customer will generate during their lifetime. This is important because it lets you determine where to allocate marketing resources. Additionally, once you know which customers are the most valuable, you can work on retaining their business. The goal is to focus on strategies that reward your loyal customers and turn average ones into loyal ones.
2. Send intelligent, personalized offers: One of the biggest benefits of having customer loyalty data is the ability for companies to deliver relevant, timely, and personalized marketing messages. Knowing what, when, where, and how much a customer spends allows companies to:
– Target customers based on their actual purchase patterns;
– Predict future actions based on previous consumer behaviors;
– Boost the open rate of email campaigns and increase revenue; and
– Offer rewards or discounts that come closest to matching customers’ tastes.
3. Retarget based on consumer trends: Personalized promotions based on customer data don’t always require discounts. For example, if your customer buys a red dress, then you can let them know about matching accessories that complement their previous purchase. One recent survey revealed that 80% of email customers find this strategy helpful.
4. Tailored communication: The proliferation of mobile devices makes real-time offers, rewards, and communication possible. Rather than receiving offers via email, your customer might walk into a retail store and get a push notification with a special discount. Thanks to customer data and mobile technology, this communication is possible.
5. Extend knowledge to move the rest of your customers: Once you’ve gained insight on who your best customers are, what their exit triggers are, and which tactics are converting, it’s time to put that knowledge to use. Let’s say you notice purchasing patterns or specific brand interactions that turn buyers into high value customers.
You could then couple this knowledge with marketing automation software to create a campaign that mimics or encourages those positive triggers, as well as one that combats the exit signs you’ve identified.
When used correctly, data is a tool that helps companies understand customers.
By learning about your customers, it’s possible to optimize your marketing efforts around one customer at a time, rather than around the average customer. Keep in mind there’s no award for just collecting customer data; you must take action on it. Leveraging behavioral and transactional data to create meaningful customer relationships is the key to building goodwill, recommendations, and loyalty.