“Why Is Customer Information Important?” 14 Examples to Collect

Why collect customer information at your business? Knowing your “customer avatar” (buyer profile) is maybe one of the most important aspects of marketing your small business. It allows you to put the right products and services in front of the right customers.

In order to understand your customer avatars, you’re going to need demographic and personal information about them. You could speculate, of course. Which is what you probably had to do in the start-up stages of your business. But, if you’re established, hopefully, you have some of this information already.

Maybe you are collecting customer information but, you don’t know what to do with it? Customer information can come from purchases, feedback, social media, or rewards programs. In order to market effectively, you’re going to have to get your hands on this information. It will allow you to give your customers what they actually want.

Customers want to be catered to

Your customers might balk at the idea of your businesses collecting data on them. Many of those same customers also want to feel like they’re the center of your attention. Like your business was made exclusively for them.

Privacy is a very important issue. You do not want to violate your customers’ trust. However, you still want them to feel like they’re the center of your business’s universe.

Customers also tend to think that they don’t want to be marketed to. The truth is, probably, that they don’t want to be marketed to – for the wrong products and services. Everybody wants to know about products and services that will solve their problems, give them pleasure, or help them avoid pain.

Collecting customer information that will help you serve them better

Collecting information on your customers will allow you to market to them only when it’s appropriate to do so. It’s a win-win.

As I said, customers don’t want to be sold on things they don’t need. On the same token, you don’t want to spend your valuable time and money marketing to customers that would never buy. Wasted money only drives up your costs and their prices.

Collecting information from all customers might be overwhelming. Stick to your best, and most frequent, customers. Try enticing them with an incentive such as a coupon, discount, or other special promotion. The insight you can gain will be exceedingly valuable.

Meet your customers where they’re at

If your marketing reaches out across a multitude of different channels, there’s a possibility that’s your throwing away time and money.

Your customer avatars aren’t on every channel. Some might be reached via one channel but not another. The same audience that responds to email marketing probably isn’t the same one that responds to social media marketing.

The better you understand your customer avatars, the easier it will be to communicate genuinely with existing customers and to find new ones.

Your competition is probably gathering customer information

Do you think gathering customer information sounds like a big inconvenience? Fair enough. But, there’s a good chance that you have a competitor who doesn’t share that opinion.

However, if you embrace the ethical gathering and use of customer information, then you’ll have a leg up on the competition who sees it as too much trouble. Every day you spend weighing the pros and cons of gathering customer information is one you’re potentially losing market share to your competitors

Customers are Dynamic

Maybe, at some point, your business has gathered some customer information? But, maybe that was years ago? Customer avatars shift. Everybody ages. What was valuable years ago might not be valuable now.

As a business owner, you know that it takes way more time and money to find new customers then it does to take care of the existing ones. Make sure you still understand your existing customers. Make sure you can still give them solutions to their problems.

If you have collected the customer information in the past (and stopped) then it’s time to start doing so again.

Collecting customer information is only half the battle

It might be that you’ve accumulated a decent amount of customer information through your normal course of business. Information that’s necessary in order to serve your customers. if you have this information, then put it to use.

Get it into a spreadsheet and start analyzing it. Look for reoccurring themes and patterns in your customers’ demographics, spending habits, and feedback. Doing so will hopefully allow you to understand them that much better and to deliver a higher level of customer service.

What about B2B customers?

Collecting data on customers it isn’t just for businesses that sell to consumers (B2C). Business-to-business (B2B) companies need to collect customer information for the same reasons.

So what information to collect?

Of course, you want to know the name of the company, its size (typically in terms of revenue), and the industry it operates in. Additionally, you’ll want the name of your contact at the business along with an email and phone number. You’ll probably also want to know the contact’s position within the business.

It may not be your contact that makes the buying decisions, though. It may be their boss or someone in a different role. Perhaps it’s an executive who you can never seem to talk to directly. Don’t market to your contact if it’s someone else who’s making the buying decisions.

Hopefully, you know what your unique selling proposition (USP) is. Though, it may not be the reason that every business purchases from you, it should hopefully serve as a good starting point.

How did this company find out about you? Sometimes they’ll volunteer this information freely. Obviously, knowing this is valuable because it tells you which of your marketing channels is reaching your business customers.

Word-of-mouth advertising among B2B businesses is not as powerful as it is among B2C customers. However, even if the decision-maker wouldn’t technically recommend your product and services, knowing that they would theoretically put their reputation on the line for you is valuable information. People tend to regard their professional reputation higher than their personal. So, it would mean a lot. The only way to find out is to ask.

Safeguarding customer information

Collecting customer information is important. Being a good steward of that information is even more important. You don’t want your personal information compromised by any businesses that you patronize. So, make sure you protect your customers’ information as diligently as you would want yours protected.

Obviously, beyond the ethical obligation, there are legal and financial reasons for doing so. Yes, there will likely be expenses involved in collecting and keeping customer information. The protection from downside risk should make these expenses justifiable. Don’t forget about the indirect risks either. Risks such as damage to your small business’s reputation.

This is an area where you can’t be reactive. You have to be proactive. Remember that if you have customer information, you are a target. Keep your security software up-to-date. Require the use of strong passwords. Be mindful of third-party access to customer information. And, last but not least, test your vulnerabilities.

What customer information to collect?

Here’s an idea of where to start with your customer data collection efforts.

This list is by no means exhaustive. Nor will all of this information be necessary for every business. But, it can serve as a starting point.

Ultimately, you need to find a balance between what your small business needs, what your customers are comfortable with giving, what you can protect, and what’s legal to collect.