As a merchant, you have probably had to make a lot of guesses in the course of establishing your business.
You had to guess the type of person that would most likely make up your target audience. You then had to think about what kind of product that this target audience would respond best to. You had to guess the prices they might find most agreeable, and you had to assume what time of the year, month, week, and hour your store might be the busiest.
While not very scientific, this level of guesswork is your only recourse when you're just starting. Starting a business is taking a risk — a calculated risk, but a risk nonetheless.
Once you start to become more established by regularly making sales, surviving, and perhaps even dominating the competitive landscape, guesswork becomes a lot less trustworthy, and a new approach has to be taken to ensure continued growth.
This is where the collection of Customer Data comes in. It takes you from guessing to knowing. And knowing reduces the risks of running a business.
What Is 'Customer Data'?
Customer data essentially refers to data points relating to the customer experience.
It is a broad category that can feature a near-limitless number of metrics ranging from time spent in-store, average spend per trip, demographic profile, and more.
With the level of individuality in various merchants' business models, Customer Data can be customised and invented according to the particular operation context.
The usefulness of Customer Data increases with the amount of that data available to you, as you can then cross-examine multiple data points to discover highly relevant 'stories' of the customer experience that could have significant consequences in the management of the store.
For example, a sneaker store might collect data relating to the demographic profile of its customers – age, gender, socio-economic situation, etc. A coffee store alternatively might gather data relating to the average spend per customer per visit.
While demographic information may be more relevant to the sneaker store, and average spend more relevant to the coffee store, if both businesses collect both examples of customer data, they then have a more valuable 'pool' of information to make better future decisions. In other words, being part of a collective pool of businesses that gather data will benefit all companies in the network.
It might be revealed that, contrary to expectations, younger customers spend less in the sneaker store on average per-visit than older customers, despite the intended target audience of the store being a younger generation.
This insight could only be gathered by covering a broader base of customer data points.
Ok, so you've discovered some unique information about the customer experience in your store. What now?
Why Collect Customer Data?
Applying the newly gathered information into your management strategy is where the question of 'why even gather this data in the first place?' can be answered.
As we indicated earlier, the collection of Customer Data is an invaluable tool for making the best possible decisions regarding the store's management.
Essentially, informed decisions = better outcomes = increased profitability.
In the sneaker store example, the discovery that younger customers spend less in an average visit than older customers has countless implications in key business areas including Operations (inventory management, brand catalogue, retail locations), Marketing (brand positioning, promotional channels, campaign targeting), and Human Resources (staff recruitment, training requirements).
Thus, the value of Customer Data easily has the potential to pay for itself in the gains a merchant can make from highly informed decision making.
One of the most stunning examples of the benefits of the collection and application of Customer Data, however, relates to its effect on loyalty initiatives and outcomes.
Customer Data and the Creation of Loyal Customers
In the past 20 or so years, we have witnessed a monumental shift in customer relationship practices. Acquisition has taken a back seat to the more effective Customer Retention strategy.
We spoke a little more extensively about this in a previous blog, but the key takeaway is this. In today's business climate, the cost associated with consistently gaining new customers is often not worth the value created by getting them. Instead, focussing your resources on keeping the customers you already have (Retention) by employing loyalty initiatives, will allow you to compete more effectively and radically increase each customer's profitability, and therefore the business itself.
And a fantastic way to devise effective loyalty strategies is through the collection of Customer Data.
Customers these days are looking for more than just high-quality products or services. The market is overwhelmed with such offerings. What every merchant cannot offer though, is a sense of personalised value. Customers expect that by continuing to do business with you, they should benefit from tailor-made offers and incentives as a reward for their loyalty.
And Customer Data gives merchants the power to offer this degree of personalisation at scale, often with the use of automated systems that easily identify and sort a store's most loyal customers, subsequently directing highly relevant offers and communications, which are sure to keep them coming for more.
Additionally, besides the obvious value incentive that Customer Data can offer, it also enables identifying weaknesses in elements of the customer journey, which can then be fixed.
Research shows that behind being surprised with offers or gifts, making the shopping process more convenient is the second most important way for a brand to interact with its customers.
Bottom line – Customer Data empowers merchants to make the smartest decisions about running the business and radically redefine and sharpen its loyalty efforts.
The Essential Customer Data Weekly Checklist
Ok, Customer Data is a must-have for stores operating in today's business environment. But as we already mentioned, the type and extent of data a business can collect is incredibly broad-ranging.
Which begs the question, if you're just starting with your data collection strategy, where's the best place to begin? What are a few of the most essential data points a business should be collecting weekly to experience all the benefits it can offer?
Here's our essential list, sorted into three master categories.
- Demographic Data
- Gender identity
- Race and/or ethnicity
- Occupational details
- Engagement Data
- Ad campaign engagement (impressions, click-through rate, bounce rate)
- Social media engagement (likes, comments, shares)
- Email engagement (sign-ups, open rate, click-through rate)
- Website engagement (visits, sources)
- Behavioural Data
- Transactions (purchases, frequency, spend)
- Usage (time spent, feature/product time allocation)
When collected weekly and regularly tracked and assessed, this selection of data points will provide a perfect jumping-off point to establish the best path to enhance your store's loyalty outcomes.
Knowing and tracking those data points regularly will make your business more profitable and resistant to economic downturns thanks to your loyal customers.
Data Collection in the Digital Age
You might understandably be thinking that while you can see the potential that rich customer datasets may provide, there are certain barriers that make collecting such data difficult or seemingly impossible.
It sounds like it could be expensive, and probably requires significant systems architecture and a sophisticated skill set to collecting all that customer data.
This is the problem that we at OMG have been busy trying to solve.
And the result? We are happy to offer a bespoke platform designed to make the logging, assessment, and strategic outcomes of Customer Data collection incredibly easy-to-use and straightforward.
By signing up, you can begin automatically recording an array of data that can be easily accessed on a simple to use platform.
You will gain valuable insight into every detail of your customer's experience with your store and then create highly complementary loyalty programmes, discount campaigns, and other retention strategies to enhance the value of each customer to your business.
It is as simple as it sounds.
If you're interested, head over to our signup page, and we'll be in touch with you to get started.