In order to grow your business successfully, you have to understand your customers. This can help you to formulate new product ideas, and come up with effective new ways of increasing sales.
Marketing data is the information that helps you to build a sound knowledge of your customers and competitors. It can be collected and used in a range of different ways – as long as you comply with data protection legislation.
The data you collect will depend, to a great extent, on the nature of your business, and at what stage you are operating. For example, start-ups that are yet to launch should be collecting a wide range of data for market research purposes. This might include potential customers’ buying habits, average incomes, preferred mode of transport, rates of computer ownership – in fact anything that has an impact on your ability to fulfil your customers’ needs.
Firms with existing customers may already have a range of marketing data. You might already know, for example, where most of your customers are based, and what their preferred payment method is. But you might also want to find out how they view your service, whether they also use any of your competitors’ offerings, and so on. This information can help you to build a more rounded picture of your customer base.
It’s also useful to keep records of every contact with a customer, from a phone call to a marketing email. In this way you can usefully build an effective communication strategy that is tailored to your customers.
Marketing data helps you to understand your customers better. Building a comprehensive knowledge of your existing and potential customers is essential if you are to provide them with the best possible product or service.
For example, if you are a restaurant owner, information about how much importance your customers place on organic or free range standards could be very useful. If you found that lots of customers cared about organic meat, you could change your menu accordingly. If you found that they did not, you could buy non-organic meat and your bottom line would benefit.
So, marketing data can help you to develop products and services – but it can also help you to sell them. For example, determining which social networks your customers and potential customers frequent will help you to decide where to focus your online marketing efforts. If you are a local retailer, knowing where else your customers shop or whether they read the local newspaper will enable you to focus your marketing efforts better, and spend your budget more effectively.
Personalisation is also important for marketing, and the more data you hold on each of your customers, the better the experience you can offer them. From just using their name on communications to sending tailored discounts and vouchers, in-depth marketing data can make a real impact.
Marketing data can be split into two categories: primary and secondary. Primary data is information that is being collected for the first time, while secondary data is information that already exists but which you might buy or license.
Primary marketing data could be collected in a range of different ways. Interviews and questionnaires are particularly effective if you want to gather a range of different information; asking customers to fill out a quick questionnaire or comment card as they leave can be a great way of finding out what they really think of your business.
Giving your customers ‘free rein’ to talk about whatever they want might not, however, be the best way of gathering the data you need. The most effective data gathering operations are often those that focus on a very specific piece of information; for example, whether or not footfall in your shop fluctuates over the course of a week.
There is a range of firms offering paid access to secondary marketing data, and this can often represent the most cost effective way of finding the information you need. It is worth remembering, though, that some of this data can actually be accessed for free, for example from government or trade publications, Companies House data, and so on.
You will also need a marketing database to record all the data you collect. A good one will allow you to record lots of information against a customer record and then use it to segment your data when you want to use it for a marketing campaign. There are many types of software you can use to create a database. Just type ‘CRM software’ into a search engine.
If you store personal information about your customers or employees, you are obliged to comply with the Data Protection Act. You must comply if you store any data about a living person, and that person is identified or identifiable.
The Data Protection Act sets out eight principles to which ‘data controllers’ (that is, parties that store personal information) must adhere. The principles require, amongst other things, that the data must be processed fairly and lawfully; that it is accurate and not excessive; that it is kept for no longer than is necessary; and that it is kept secure. There are severe penalties for firms that fail to comply with these principles, or with the rest of the Act. You may wish to read our article on data protection for businesses for more information.
Marketing data can help your business to develop products and services that your customers need, and help you identify the best way to sell them. This data can be collected in a range of ways, many of which are simple and low-cost. If you can come up with an effective way of collecting and acting on marketing data, and you remain compliant with data protection legislation, it can help to ensure your business remains successful.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
12 March 2020 • 2-minute read
Chancellor Rishi Sunak announced the first UK Budget since October 2018 amid continuing political and economic uncertainty. Here’s the key…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2020 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.