Retailers today collect many pieces of data from all different touchpoints, but to what end? Capturing data is only a part of customer data management. The goal should be to take all the disparate data and incorporate it across one software platform that considers the buyer’s journey so you can make the best decisions for customers and the business. With this approach—closed-loop customer data management—you can increase retail brand loyalty.
Let’s talk about what data really is, what it means for your business, and why good customer data management has the power to increase brand loyalty.
Why customer data management is important to retail
So what exactly is customer data? It’s any data that tells you who your customers are and how they use your product or service.
Businesses collect data to understand the customer experience and improve marketing, products, or support. All of this helps companies better engage with customers and offer a personalized experience—something that’s crucial in today’s world. We know customers like to feel special, so it’s no surprise that 80 percent of customers want personalization from retailers.
Cool—but just how do you deliver that personalized experience? By using customer data!
With thoughtful customer data management via a customer data platform, retail businesses gain valuable insights. There are several types of customer data that each provide unique details, so let’s dive in.
The 4 main types of customer data
Customer data comes in four main types: personal, preferential, behavioral, and attitudinal. Consider each in turn.
What is personal data?
Personal data is just that—personal. It’s the “none-of-your-business” info you wouldn’t typically give out to just anyone, including:
- Socioeconomic status
- Education level
- Marital status
- Address or place of residence
Personal data is vital because it often influences behaviors and preferences. Once you can access this data, proper management can help you understand how your customers buy and what motivates them the most.
What is preferential data?
Preferential data is also essential because it comes straight from the customer. It’s information that they want you to know! This data comes from product or service ratings, social media likes, product clicks, and item rankings—any time a customer deliberately expresses what they like or don’t like.
Through preferential data, you can find out what customers value. You can even find out what brands they’re loyal to or whether they base their shopping on price.
What is behavioral data?
How do your customers interact with you? That’s what behavioral data measures. Unlike personal or preferential data, it’s not information that the customer is directly supplying. It’s about what, when, where, and how the customer shops and interacts with you.
Different bits of behavioral data might include:
- How often your customer shops with you
- How they shop (i.e., in-store or online)
- Whether or not they wait for sales before purchasing
- What they purchase most
You don’t need to do anything for this information other than track site metrics. With this information, you’ll learn details such as how long a customer spends on your website before purchasing.
What is attitudinal data?
The other types of data we’ve discussed seem self-explanatory, but attitudinal data can be more of a mystery. However, it’s actually super common. Consider for a second: Have you ever filled out a survey or left a product review? If so, you’ve left behind attitudinal data.
Although surveys and reviews are good starts to measure how customers feel, so are focus groups, general feedback, and complaints. Information that you act on can drive loyalty, help customers understand that you’re invested in them, and show that you’re responding and improving. Even when you’re responding to an issue, showing the customer you care about their experience will make them care a little more about your brand and keep them coming back.
Customer data management builds brand loyalty
Knowing your customers and responding in ways that provide them value helps build brand loyalty, making customer data essential to growing your retail business. In fact, you might go so far as to say that customer data is the cornerstone of brand loyalty.
In retail, data is collected by and stored in your point-of-sale (POS) systems, web platforms, branded apps, websites, and social platforms. Managing data collected from different resources is the best way to give customers what they want, demonstrating that you understand them and spend time where they are.
How does customer data improve targeting?
The more data you have about customers, the better you can target them. Knowing your customer means you can curate their shopping experience and bolster loyalty. Something as simple as sending personalized offers to encourage existing customers to keep buying from you can make a huge impact.
Initiatives like loyalty programs are popular for a reason. When you combine customer data with omnichannel strategies, you get LOYALTY! Customers love rewards, so even an occasional free submarine sandwich can go a long way. The Harvard Business Review even reports that a 5 percent increase in customer loyalty can increase sales to a staggering 95 percent!
Managing Customer Data is Key to Loyalty and Retail Business Growth
There’s no question about it: Customer data is the key to knowledge and growth for businesses. Just think about how customer data management can help with some of the most pressing issues today—such as forecasting and supply chain demands—with details about:
- Purchase preferences
- Purchase patterns and habits
- Payment methods
Retail companies can do so much with data and the right data platform and processes to bring it all together. Customer data management brings almost unlimited opportunities for personalization informed by demographic and psychographic customer profiles. This can help improve store performance, feeding directly into more customer loyalty and revenue opportunities.
That’s why it’s crucial to choose the right data management platform. That data is precious—choose wisely to make the best business decisions!
Want to know more about how to choose the right customer data management platform and processes? Keep your eyes on the Detroit Labs blog.