At the heart of every business lies a customer database, the holy grail that ties so many other parts of the business together. Every outbound activity of the business relies on it, and that’s merely contact information. There’s much more beneath the accustomed tip of the iceberg that represents customer data.
Many businesses neglect the importance of utilizing available customer data. The amazing opportunities to use it simply gather dust on the shelf, waiting for better days to come.
Or even worse, some businesses don’t collect data at all. While filling out a form with more than four fields is a drag (and increasingly so with every additional field), collecting the data is essential. Thinking outside of the box can be key to gathering it — perhaps you can do it with conversational marketing? Or perhaps with a well-placed survey? The possibilities are many, but more on that below.
How are you managing your customer data?
In a not-so-good scenario, the data structuring process starts with a spreadsheet. While Excel is a fantastic tool that keeps us all organized, using it to store (and operate) a database of clients is a very bad idea.
Unless you’re a guru of tidiness and data storage optimization, your spreadsheet will be messy, hard to navigate and update, and full of gaps.
This might be sufficient for super small-scale operations, but once you decide to scale up, the problem will grow exponentially. As soon as multiple people start using it daily, things will get out of hand really quickly.
Data security is another big concern. When a customer database is maintained in a single Excel file, it’s waiting for a disaster to happen as it's nearly impossible to implement all the proper safeguards for data privacy and security.
Yet even if the data is not stolen, there is always a chance that the database will become corrupted, and this problem will be even worse if you don't have a backup.
Just like with clunkiness, a good answer to both of these problems would be an introduction of a CRM system.
Keeping data organized is simple with a CRM
The first real step to making good use of your data is using a specialized tool to work with it. A customer relationship management system is specifically designed for that, and there are so many of these on the market now, so you’re sure to find one that fits your needs.
For example, Salesforce is a top choice for large enterprises, HubSpot is fantastic for growing businesses, and if you’re oriented toward messenger-based sales, you can check out amoCRM.
Not only is a CRM system suitable for managing the customers and the sales process, but it also connects other cloud services a business might be using (and if it doesn’t, there’s always PieSync to connect data between your apps).
With a CRM, your customer database is presented in a much more user-friendly format. Instead of columns and rows, you have a customer profile which makes reading the data on each particular deal or prospect much easier for your team. Accessibility to the database also becomes much more versatile.
On top of that, a CRM is available from any device. Security is less of a concern because of the ability to assign rights to every user of the system, effectively preventing database theft by restricting export roles.
The best way to capitalize on customer data with a CRM, however, is with automation. Automated email campaigns, integrated forms, automated chat conversations via chatbots… you name it. All of that can be used to gather data and use it effectively for other campaigns or activities.
A chatbot, for instance, can ask the customers questions before the sales representative takes over and automatically add the entered information to related customer data fields. Couple that with system actions like task creation for the sales reps, tagging, or automatic emailing, and you’ll have a well-oiled machine to drive the business forward.
Three ways to access the true value of customer data
Now that we know how to organize customer data efficiently (it’s more than half of the battle!), let’s push it to the limit. What can we do to make the most of the data we’ve gathered?
Here are three best practices to help you get the highest value from every piece of customer data in your CRM.
Every customer is different – from their preferences to buying habits, price range and much more. But what matters is the fact that everyone would like to be treated as a person, not a walking moneybag.
Customers generally like to do business with brands that make the shopping experience more relevant and personal. It plays a big role in the purchasing decision. And why shouldn’t it? When you find what you’re looking for much faster, it’s convenient!
Even addressing the customer by their name during outreach is already a step forward. It's a small step, but an important one to make the customer feel welcome. And that’s just using the most basic data you have: their contact information.
Each customer can be treated individually, and it’s up to you to decide what information to use from your database for that. Could it be a geographical area, or age, or maybe other trends or preferences? For instance, if you’re running an ecommerce website, showing product recommendations similar to what a customer is looking for is a nearly faultless method to increase revenue.
The more data you have, the more accurate your analytics can become. With the precision of data comes precision of marketing, sales and support. Your marketers will be able to pinpoint the ideal customer, run efficient lead nurture campaigns and convert better.
Your sales team, meanwhile, will know more about the customer they’re engaged with and be able to sell better. Ultimately, even your account managers will benefit from better knowledge of your customer and be able to upsell more effectively. Plus, by recognizing the habits of your customers, you can learn what works best and how purchasing habits are formed.
2. Customer analysis
With this information, you can identify the top customers of your company and concentrate your efforts on getting more of these.
The best customers that you have usually form around 20% of the total customer base, and those are the customers you’d like to focus on. Again, your customer data will come in handy here — if you know them well, personalize the content delivery and make their life easier — they’ll stick around. It’s surprising how rare a well-made personalized approach is used.
The worst customers are also there, and you can also identify them. Sometimes allocating resources to attracting the wrong customers will not have a worthwhile return on investment, even if they purchase. Weed them out, don’t prospect where they come from, and save the best seats for your best guests. Running a loyalty program might be a good way to determine whether your not-so-good customers can actually be upsold.
3. Strategy and analytics
Making efficient use of customer data is not merely a tactical move. It plays a big role in forming long term planning for customer acquisition, retention, upselling, and other crucial areas of your customer lifetime value cycle.
The broader the data set, the better metrics you can introduce for your business, and all the more precision you can get. With the ever-shifting balance of forces, new metrics now prove the effectiveness of your sales campaigns.
With conversational marketing, for instance, a new metric is now gaining importance — cost-per-conversation. With chats being a much more efficient communication channel cost-wise, wouldn’t it be nice to have this kind of metrics on your dashboard?
For a sales manager or an executive, it will be very handy to see the data on a dashboard, with all the important metrics in play. Limited only by your imagination and business goals, additional data about your customers can help you form a better strategy and have quick insights on the current progress of your business.
Just like the old Viking laws dictate: use the best weapons, keep your camp in order and use varying methods of attack. Simple as that. Managing your customer data well by using it in conjunction with good tools is pretty much using the best weapons.