4 most important questions to consider when collecting customer data

4 most important questions to consider when collecting customer data

March 7, 2020 0 By CX REFRESH

Customers are the backbone to any business. Without them, there will be no reason to continue trading. Even more importantly, there will be no profit. But, when you acquire customer data regularly, it helps you understand what your customers need most.

Gathering customer data is notoriously challenging. Businesses now need to be extremely careful with how they acquire data, how they store it, and what they do with it. A business needs to be transparent during every step of the process.

Let’s explore the questions a business should ask to itself and its customer when gathering data.

How will you acquire data?

How a business acquires data is highly significant. Businesses are using an array of diversified sources to acquire and process customer data. You can collect customer data by:

  • Directly asking the customer
  • By appending other sources of customer data
  • By indirectly tracking customers

The most obvious places to pull data is from consumer activity on a business’ website. Location-based advertising is a more interesting method, however, as it utilizes an internet-connected device’s IP address so that it can build a data profile. Through this data profile, a company can use hyper-relevant advertising methods.

How will you protect the data?

Another question a business must ask itself when gathering customer data is: how will I protect the data?

It is of utmost importance that every piece of customer data is encrypted and stored securely. Data theft is a real threat to every business. Should it happen to your business, it could potentially close the doors on your company. Therefore, you need to ensure every piece of sensitive data is safeguarded.

However, it’s crucial to remember that safeguarding customer data starts in your office. Studies report that employees are one of the biggest threats to data breaches. Every employee needs to be well versed in the best practices of creating a strong password and ensuring they don’t give permission to view sensitive data to anyone who shouldn’t have access.

What data do you need to make the right decisions for your business?

This question will form the basis of your data collection. From gathering names, location and age to more personal information such as income status and lifestyle preferences, this data will enable a business to know who they are catering to. It will allow a business to know who they want to be targeting if they aren’t doing so already. Think about the following to understand what data to collect:

  • Name, age and family status: Single, married, widowed, divorced, and so on
  • Location
  • Lifestyle: Own a house, living situation, income status
  • Education status: High school, university graduate
  • Occupation status: Unemployed, in work, retired

Specific occupation: marketing, retail, IT, engineering, etc.

Why do you need to gather data?

A highly important question to consider; why are you gathering this data?

Is it something which will help you create tailored marketing campaigns? Will it show you which demographics respond most to your products? Is it for feedback on your current products and services? By answering this question, you will be able to gather the correct data.

However, this question will also enable you to know what benefit customer data will bring your business.

Above all, the data should paint a clear, defined picture of your customers. This information will be invaluable for the business as a whole moving forward, from marketing to product development.

Gathering customer data is a challenge. Not only do you need to know what data to collect, and how, but you also need to protect and safeguard every piece of data. Only by doing so can you ensure customers continue to trust your business with their data.