Over 90 percent of companies think they could do more with their customer data – and they’d be right! Most companies have more data than they know what to do with – and no plan in place for how to use it. But this blog post will show you how. In it, you’ll find ten ways you can use customer data the right way.
Our first four tips concern the proper “care and keeping” of your data. The rest will show you how to use that data.
1) Establish clear guidelines and procedures for data management
This is called “data governance” and should be the first thing every company does before starting customer data collection. Think of it like a playbook for how your team handles customer data, from when it’s collected to when you delete it. It includes things like:
- Making sure your data is accurate and reliable across all systems, apps, and programs
- Keeping sensitive data safe and private by complying with laws like GDPR, HIPAA, and more
- Setting up “data lifecycle” rules so you know how your data is created, collected, stored, used, and eventually deleted.
- Assigning specific people – or teams – to oversee specific data sets.
- Creating guidelines for managing data, like who can access it and how long it should be kept.
By implementing these practices, you can trust your data more, make better decisions, build trust with your customers, and reduce the risk of breaches or other data-related issues.
86 percent of highly mature organizations use data governance to ensure everyone has access to the appropriate data so they can do their jobs even better!
2) Explain to your customers how you’re planning on using their data
Customers know how valuable their personal data is, and according to Salesforce, 79 percent are more protective of it than ever before. After all, over half of modern consumers don’t trust companies to protect it well or use it wisely.
So, how do you start to rebuild that trust? The answer’s simple: clear communication. Don’t write it in legalese and bury it on page six of a user agreement. Tell your customers how you plan on collecting and using their data upfront in plain language.
Because consumers know you’re already doing it. They just want you to be straightforward and use their data to be used to their benefit – not just yours. You must also ask for their permission before you give that data to other companies. If you don’t get it, 71 percent of customers said they’d leave and never look back.
More than 70 percent of consumers are more likely to trust a company with their personal data if the company clearly explains its intended use.
3) Prioritize the highest levels of data security on all platforms
Trust isn’t just built by transparent communication; it’s also by top-tier security measures. Think about it – would you give your personal information to someone who couldn’t guarantee its safety? Absolutely not. Your customers feel the same way.
In fact, according to a McKinsey study, 87 percent of respondents said they wouldn’t do business with a company if they had doubts about their data security. That’s almost nine out of ten potential customers lost before you even get started.
The bottom line? Making data security a priority is more than just avoiding fines or bad publicity. It’s about preserving customer trust at all costs and is essential for your business’s survival and success.
Here are a few quick ways you can keep your customer data collection – and maintenance – secure:
- Use robust encryption protocols and multifactor authentication
- Educate staff on best practices to prevent human error
- Deploy firewalls and intrusion detection on your network
- Evaluate your partner’s security measures
- Conduct frequent security audits and updates
Security inspires loyalty! Approximately 76 percent of consumers said they would stay loyal to companies with excellent data security.
4) Anonymize the data you have as much as possible
In many cases, you may not need the customer’s name, phone number, or other personally identifiable information (PII) to identify trends and patterns. So, anonymize it! Some standard techniques include:
- Aggregation: Grouping data together to hide who it belongs to while still seeing overall trends
- Pseudonymization or Tokenization: Replacing personal information with codes that only make sense with additional data
- Generalization: Removing specific details and replacing them with broader categories
- Masking: Making minor, controlled changes to the data to keep it private but still useful
Using any—or even all—of these methods helps companies learn from customer data collection while keeping that data as private as possible.
Once you’ve taken these steps to protect and inform your customers, it’s time to put their data to work. The rest of our tips will deal with how to do it without invading their privacy:
5) Use customer data to understand their preferences both now and in the future
Customer preferences evolve over time and 65 percent expect businesses like yours to keep up. And, by digging into customer data, you can get valuable insights into those preferences, like:
- Which products and services they prefer
- How they prefer to be contacted and assisted
- Which types of content do they engage with the most
- What upgrades they might need in the future
All these data points will help you make smarter decisions instead of relying on guesswork. They will also lead to more effective product development, marketing strategies, and customer service initiatives. Customers will feel understood, and when they feel understood, they’ll continue doing business with you.
If you understand customer preferences, you’ll build a loyal customer base and gain a competitive edge over competitors that aren’t data-driven.
6) Use customer data to personalize their experiences
Knowing customer preferences is one thing. Personalizing your service to fit those preferences is another thing. Personalization is about creating meaningful connections with your customers by anticipating their needs and desires before they articulate them.
You can use what you know about your customers – their behavior, preferences, and needs – in every customer-facing touchpoint. Here are a few examples of how you can do it:
- Daily communication: Segment contacts based on their preferences so you can send emails that are relevant to their needs
- General marketing: Create content that aligns with customer interests and hyper-targeted adds to increase engagement, sales, and overall ROI
- Customer support: Instantly access past interactions, tickets, and emails so you can greet each customer by name and provide assistance tailored to their specific needs.
- Recommendations: Suggest relevant product features, upgrades, and add-ons based on usage history and AI-driven predictions.
7) Use customer data to identify who’s a churn risk
Have you ever felt like customers are slipping through your fingers for no good reason? Customer data collection can help you find out why they’re switching to your competitors. And it starts by paying attention to what they’re saying and how they’re acting.
Customers lodging multiple complaints, spending less time engaging with your platform, or downgrading their subscription plans are all typical warning signs that they might be ready to switch.
Getting ahead of these signs will give your team the time they need to build the right incentives to keep customers from churning.
8) Use customer data to improve their experiences
When customers turn their data over to you, most expect you to provide a better experience in return. Especially because they know you collect a lot of it. But where do you start? How can you turn raw data into better CX? We’ll show you:
Begin by pinpointing friction points. These are all moments customers encounter obstacles or difficulties when interacting with you. Once these are identified, you can take the proper steps to smooth those points out.
For example, you see that customers are abandoning their carts at checkout more than usual. After investigating, you discover that the page is too complicated, and the shipping is far too high. With this information, you can redesign the checkout process to be more user-friendly and offer incentives to people who complete their purchases on time.
This practice meets customer expectations and helps draw in new ones since over 70 percent of consumers make purchasing decisions based on CX alone.
9) Use customer data to stay up to date on their needs
One of the fastest ways to fall behind your competitors is not to keep your customer knowledge up to date. By reviewing your customer data collection regularly, you’ll be able to stay in tune with what your customers want and need. There are a few ways to do it, but here are the most popular:
- Review your data to design and send out surveys to customers asking questions about their experiences, preferences, and any changes they would like to see.
- Monitor your social media channels to see how your customers are feeling. What are they talking about? What questions are they asking? Adjust accordingly.
- Track their behavior both in and around your products. Are they using certain features more than others? Are they showing interest in other services? That data will help you determine what they might need from you now and in the future.
It will keep your business agile, responsive, and ready to deliver the value your customers expect and deserve.
10) Use customer data to build out your roadmap
With all this data at your fingertips – customer feedback, feature preferences, and more – you’ll be able to know what updates to make to your products and which ones you should consider adding to your arsenal. Are your current customers asking about text messaging? Does your support team keep getting complaints about the lack of texting on your platform? Then maybe you should add business texting to your product list.
The result? Happier customers and better bottom lines. By following these 10 tips, you’ll build trust, improve loyalty, and set yourself—and your customers—up for success.
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