What is customer information? More importantly, what can we do with customer information that has positive effects on the bottom line?
Managing Customer Information is in practice collecting bits of information about individual or groups of customers and utilising that within your organisation to inform the decision making process regarding interactions with that customer/customer group in future. This paper looks at the necessities of storing accurate customer information, the technology available to capture and store customer information, and what do with that information that can significantly influence your organisation.
Customer Information – what information do I need and why?
At the basic level, you need the name of the organisation, a contact name and address and a telephone number. From this information you can talk to your customer at any time about anything. The problem is they don’t all want you to talk to them about anything at anytime. So, you need more information on the customer such as:
- Job titles/roles
- Email addresses
- How a customer found you (what marketing is working for you?)
- Products purchased
- Products they didn’t purchase
- When they purchased
- Why they purchased
- Why they didn’t purchase more
- When are they likely to purchase again
- How much can they afford to spend
- Where are they spending if it’s not with you – competitors!
Why collect and use customer information?
Assuming your database has been populated correctly, you can identify segments of your customer base that require specific attention such as groups that could be sold an advanced model of a basic product they purchased from you. Good segmentation will allow you to identify any missed revenue that your customer might be spending with a competitor, and undertaking activity into that segment can you help you learn why that is, positively influencing your proposition for this group of customers.
Every segment of your customer database is attracted (or not) to your products for a different reason. For some it might be price, for others it might be location. The range of reasons a customer choose you is vast and therefore it is vital that you secure this customer information so that you can communicate with your target audience effectively, providing them with a message about your products that appeals to them.
Developing your customer effectively can only be accomplished if you have the necessary facts about the individual customer. Every customer should be on a journey with your organisation. You may have a range of products that compliment each other. The perfect customer will have bought them all, but even then you still need to manage the customer to ensure they continue to purchase from you, and you can only do that if you know why they bought from you. Having that customer information can help you ensure that not only can you continue to offer a proposition that appeals to them, but that you can offer that same proposition to similar customers who haven’t fully bought into your offering.
Winning back lost customers
Why is a customer no longer your customer? If you can’t answer that, how will you ever win them back? Knowing the why helps you to change the how, so it is imperative you provide as many opportunities as you can for a customer to leave feedback. The information you take away from this feedback can help you spot common themes and objections, and thus you can implement new policies and practices that overcome the problems customer feedback has identified.
When to collect Customer Information
When is it most important to capture customer information? More and more, businesses are realising that the most important time to ask a customer what they think is whilst they are carrying out the activity you want them to provide feedback for. You can’t rely on doing it before hand, as all you can measure is customer expectation. There is obvious value in measuring whether expectation levels are being reached, but often a customer will have unrealistic beliefs in what the outcome will be. Capturing customer information after the event also has merit.
You can gain good levels of quantitative data such as demographic groups or insights into what a customer has actually purchased. But there are flaws to the information garnered after a customer has left the activity. For instance, they have had time to forget certain aspects of their experience or they may be influenced by other factors.
Capturing your customer’s feedback at the point of experience is imperative if you want to gain information on your customer’s behaviour when they are actually interacting with your business. The activity is fresh in their mind, so if you provide methods of engagement that a customer feels comfortable with to provide honest answers, you will get far greater information about your customers that you can use to influence business operations.
Customer Information Technology
There are two core reasons for implementing technological solutions as part of your Customer Information system:
To capture and store customer information in a safe and accurate way
To provide a platform for extracting relevant customer information in an efficient way that can be used for effective customer communications.
Capturing customer information is vital. It’s not enough to simply know whether customers have bought your products or not. You need to find out why so that you can utilise any insights that you gain to increase your customer acquisition or average customer spend. Innovative technologies such as Touch Screen Customer Surveys or online questionnaires provide you with methods of customer engagement that truly allow you to find out what the customer thinks.
Of course you need to ask the right questions, but the answers can have significant impact on your operational policies. There are examples of retailers who have altered their stock management because they were able to gaps in their portfolio or specific times of the day when shelves were empty.
Customer Relationship Management (CRM) Software
There are some excellent CRM solutions in the market that are extremely valuable in storing relevant and accurate customer information that can be mined and extracted to reveal patterns of behaviour, purchasing history, value of the customer to your organisation, potential opportunities. The quality of your data has a direct impact on the quality of your Customer CRM activities. It is not enough to invest in a CRM software package; you must ensure that the information that is used to populate the system can be used effectively.
The fundamental principles of Data Protection Act 1998 specify that personal data must:
– be processed fairly and lawfully
– be obtained only for lawful purposes and not processed in any manner incompatible with those purposes
– be adequate, relevant and not excessive
– be accurate and current
– not be retained for longer than necessary
– be processed in accordance with the rights and freedoms of data subjects
– be protected against unauthorised or unlawful processing and against accidental loss, destruction or damage
– not be transferred to a country or territory outside the European Economic Area unless that country or territory protects the rights and freedoms of the data subjects.
The Information Commissioner’s Office is the UK’s independent authority set up to promote access to official information and to protect personal information
Measurement, Analysis and Intelligence
Once you’ve collected you customer information, what next? It’s absolutely vital that the data you collect on your customers is analysed to identify trends and look for common themes in the information you have. Are there are times of the week when the same set of customers visit you store? Do they all want to buy the same thing, only half can and half can’t because you haven’t stocked your shelves to meet demand?
Between your customer feedback capture activity and the information about your customers saved in your CRM system, you will be able to identify any number of circumstances such as this, giving you evidence to support any process or policy changes that need to be implemented to improve your company.
If you don’t collect and store customer information correctly, how can you possibly make informed decisions as to the type and style of communications that can really impact on your customers? The quality of your customer information has direct influence on the quality of your customer communications. It helps you send out the right signals and message to the right people. It helps you identify where there are potential revenue opportunities. It helps you identify where and how your competitors are moving into your market space.
More often than not it’s the organisation that is strategically proactive that wins new customers or who has the better reputation in the market place. Capturing accurate and relevant customer information that you analyse and use effectively will put you ahead of the organisation that is reactionary, rather than customer focused.
This page was prepared for The Institute by Customer Research Technology Ltd