Understanding Customer Data and How to Collect It

What’s in this guide?

• Identifying key data points to collect
• Methods for customer data collection
• Ensuring data quality and accuracy in CRM
• Importance of data privacy and compliance

Identifying key data points to collect

Before you begin collecting customer data, you need to identify the information you want to collect in the first place. The data you collect should be relevant to your business and sales goals and should help get you closer to achieving those goals.

There are four main customer data types to consider when beginning the process of customer data collection:

• Demographic data: Demographic data includes basic information gathered from clients and customers like name, address, gender, age, email, occupation, and other contact information.
• Purchase and buying behavior: This data refers to customer interactions with your company like recent purchases, customer loyalty data, purchase history, and trends in purchase behavior.
• Communication preferences: Your customers all have different preferences on how they want your company to connect with them. Whether it’s through email, SMS, or phone call, it’s important to know and remember each of your customers’ communication preferences.
• Engagement with digital channels: How your customers interact with different digital channels can say a lot about them and help you understand how they interact with your brand. Engagement data points to collect include social media likes, shares, comments, and follows.

Methods for customer data collection

There are a few different methods of customer data collection, and each method yields different advantages and disadvantages when it comes to the type and quality of customer data being collected.

• Interviews: Interviews allow for face-to-face interactions with customers and make for a great way to get to know your customer in a more personal setting. 
• Online analytics: Online analytics deals with customer data collected from your website and social media channels. Social media sites like Facebook and Instagram feature business account pages that collect and organize this data, and search engines like Google offer in-depth analytics pages.
• Transactional data: Transactional data is pulled directly from your business, and goes beyond basic invoices. Here, you can gain insight into customers’ purchasing habits, product or service preferences, and shopping behavior.
• Customer feedback: Customer feedback can be collected through surveys and online forms, or even in person (if you have a physical storefront). Customer feedback is a great way to earn unfiltered feedback related to your products, services, and business as a whole.
• Observation: Observation is unstructured and, like interviews and customer feedback, is a fantastic way to collect raw data about customers’ shopping and buying behaviors in real-time.
• Public records: Public records hold valuable information related to local demographics, income, and other characteristics of specific areas.

Ensuring data quality and accuracy in CRM

Customer data is used to help businesses gain valuable insights into their customer base and make data-driven sales predictions. The accuracy of these predictions rides on the quality of data being taken in. Through data quality and accuracy strategies, you can do just that.

Ensuring customer data quality and accuracy in a CRM starts with customer data collection that is timely, accurate, reliable, and consistent. Not only does high-quality data help businesses make accurate sales forecasts, but it also helps them create targeted, data-driven marketing campaigns and supports sales representatives in delivering great customer service.

There are three major processes that can help you ensure you’re collecting and maintaining customer data that is timely, accurate, reliable, and consistent:

• Data validation: Data validation involves reviewing the customer data stored within your CRM to confirm it meets the standards and rules set forth by your business and industry. With data validation, you can ensure your data is error-free and easily interpreted.
• CRM data cleaning: Data cleaning, also known as data scrubbing, is the process of modifying or removing customer data that isn’t needed. This includes data that is inaccurate, outdated, duplicated, corrupted, or inconsistently formatted.
• Data governance: Data governance is the process of setting up internal standards and policies concerning customer data collection and storage. These standards help you manage how the data in your CRM is collected, stored, analyzed, and deleted.

Importance of data privacy and compliance

No one wants their personal data out in the open for all to see, especially your customers. Customer data privacy and compliance are important facets of customer data collection and storage because they protect your customer data against potential security breaches, and protect your business from potential fines and lawsuits.

Data privacy laws help regulate the collection, storage, and use of customer data that could be considered private or sensitive. The following are three major data privacy regulations businesses should be aware of:

• General Data Protection Regulation (GDPR): GDPR gives citizens in the European Union the right to access, rectify, or remove their data and grants them the right to data portability. If your business operates within the EU, or services customers in the EU, you must comply with GDPR.
• California Consumer Privacy Act (CCPA): The CCPA requires businesses in California to disclose the data collection practices they employ and allows their customers to opt out of the sale of their data to third parties.
• Health Insurance Portability and Accountability Act (HIPAA): HIPAA protects the personal health information of patients from being disclosed. Any businesses within the healthcare industry must comply with this regulation.