September 17, 2021
10 benefits of collecting customer data
Did you know that 2.5 quintillion bytes of data are collected every single day? However, most retailers and brands are still missing out on the opportunity to collect customer data and make good use of it. Here are the top 10 benefits of collecting customer data in real time and across all sales and marketing channels.
Collecting customer information is vital in all industries.
This data helps you know the areas you need to work on to acquire new customers, grow the lifetime value of your existing customer base, and improve customer retention metrics across the board.
Even though 2.5 quintillion bytes may be more than your business could ever feasibly collect, you still have to ensure you collect as much customer data as you can to seize the many opportunities that data presents. Keep reading to discover the ten benefits of collecting customer data.
10 benefits of collecting customer data
1. Know your customer.
Customer data helps you understand who your customers are. Instead of relying on gut feelings about who you think your customers are, you can use data to access true and up-to-date information about how your customers shop and what they expect from your brand.
When you know your customers, you are in a better position to make adjustments to meet your customers' needs, improve loyalty, and ultimately grow the lifetime value of each customer through increased engagement. Thus, customer data also helps you improve how you communicate with your market, modify the shopping experiences you offer to better serve your customers, and inform product development for the future.
2. Identify high-value audiences.
A high-value audience is a group within your target market that is most likely to become long-term, repeat buyers of your product or services. A high-value audience consists of individuals who share certain characteristics, such as demographics, product interests, and channel preferences, which ultimately lead to higher-value sales.
Customer data helps you identify high-value customers so your targeting can be more impactful. By using your customer data to build high-value lookalike audiences based on these customers, you can implement more efficient and impactful acquisition strategies.
3. Turn one-time buyers into repeat customers.
Every business wants to increase profits by increasing the number of orders from each individual customer. However, achieving this is not a walk in the park, especially if you have little or no customer information. In fact, most businesses find that 50–80% of their customers purchase once and never again.
Thanks to customer data, you can now formulate strategies to turn one-time buyers into loyal, repeat purchasers. By digging into your data, you can identify the products that first-time customers are most likely to purchase next, the time frame during which they’re likely to make their second purchase, and the best messages and channels to use to target them for upsells.
4. Improve and personalize the in-store experience.
Consistent, personalized, positive customer experiences are critical for the success of any business. This is because a happy customer will most likely become a loyal customer who ultimately helps improve word-of-mouth marketing and boost your total revenue.
One way of ensuring your customers’ happiness is by improving and personalizing their in-store experience. Customer data helps you personalize your customers’ in-store experiences because it provides you with all the crucial information you need to understand who your customers are and how they want to engage with your brand.
There are numerous ways of improving the customer experience in retail stores. These include:
- Embracing retail clienteling technology.
- Offering personalized product recommendations.
- Streamlining checkout with proactive outreach.
- Providing access to exclusive content or events.
A personalized in-store experience helps the customer feel better about shopping with your brand and leads to more, higher-value purchases.
5. Prevent customer churn.
Customer churn (sometimes called customer attrition) is a term used to refer to the percentage of customers that have stopped shopping with your brand for a certain time period.
Before customers churn, they often go through a “cool down” period in which they’re demonstrating signals that they’re about to churn. If you can identify and track these signals, then you can take action and re-engage customers before they’re fully lost.
Customer data helps you do so. By collecting customer data and using predictive analytics within tools like Customer Data Platforms (CDPs), you can predict and ultimately prevent customer churn. This helps you improve your retention rates and increases overall profits.
6. Improve digital advertising (without violating privacy regulations).
Digital advertising has taken the business world by storm, and every business seeks to be part of this phenomenon.
However, for effective ads, you need to know your target audience so you can engage them with the right offers, messaging, and creative. Quality digital ads are those that are:
Fortunately, with the customer data at your disposal, you can create engaging digital ads that increase acquisition, growth, and retention rates.
And by using tools like CDPs to collect first-party and zero-party customer data, you can personalize these ads and retarget customers in ways that do not violate consumer privacy and trust.
7. Improve cross-functional collaboration.
Effective cross-functional collaboration is critical for business innovation, customer satisfaction, and overall efficiency and effectiveness—and it’s one of the main benefits of CDPs.
For example, collecting customer data allows the executive, marketing, sales, retail, and service departments to all work together harmoniously over a mutual understanding of the customer.
This shared and consistent understanding of the customer helps every team to execute their respective duties with a customer-first mindset, ultimately improving the customer experience across every channel and touchpoint.
8. Keep track of your marketing performance.
Marketers always have the pressure of showing a return on investment for all their engagement strategies. Marketing performance metrics help you gauge the degree to which this time, budget, and effort on marketing contributes to the business’s core objectives and KPIs.
Collecting and measuring real-time customer data helps you track your marketing performance against customers' actual behavior and core business objectives such as acquisition, growth, and retention. This can help you make strategic decisions to improve the overall customer experience and retain a competitive edge against competitors.
9. Save costs.
Businesses always have the pressure of decreasing expenses. By reducing expenses, companies increase their profit margin and net profit. Therefore, decreasing costs is one of the most effective ways of increasing your overall revenue and business growth.
However, you shouldn’t reduce costs at the expense of your actual impact. Customer data helps you save costs by helping you understand the areas and customer segments that need your attention and those that don't. Instead of wasting the company's expenditure on marketing activities that may not yield fruit, customer data helps you know what exactly can work—and helps you increase the impact of those activities through improved personalization and insight.
Additionally, easy-to-use tools like Lexer’s CDP can help business users independently gain customer insights and activate data-driven retail marketing campaigns, eliminating the need for expensive customer analytics teams or outsourced agencies.
10. Offer seamless customer experiences.
In today’s hyper-competitive retail world, customers have a greater voice and power than the sellers. Thus, you have to seriously consider their needs to maintain a good relationship with them. A good customer experience enhances customer loyalty, encourages brand loyalty, and ultimately improves profits.
However, today’s consumers have come to expect these personalized experiences across every channel and touchpoint. Combined customer data helps you develop an incredible customer experience that translates seamlessly across every engagement channel and sets your brand apart from your competitors.
In other words, customer data is a must-have for retail and ecommerce success
Now that you know all the benefits of customer data, do you know how exactly to utilize this data to your advantage? CDPs can help you manage, analyze, unify, and activate customer data from any customer touchpoint or channel. Click here to learn the 7 key considerations you need to make in order to choose the best CDP vendor for you.
At Lexer, we help leading brands like Igloo, Nine West, and Supergoop! collect, combine, enrich, and activate their customer data to improve engagement and drive incremental sales growth. Click here to discover the 15 reasons why our customers choose Lexer as their CDP partner, again and again.