Collecting customer data is an essential part of any successful marketing strategy but as privacy regulations are tightened, and customers become more cautious of giving out their personal information, we need to come up with more innovative ways to collect customer data.

We’ve collated all the relevant information about how to collect customer data whilst overcoming this hurdle to put your business in the best position possible. 

So, what is customer data? 

Any information that you collect about your customers is customer data. This can include personal information, behavioural preferences, demographic information, and buying or browsing habits. 

Having customer data forms a positive feedback cycle. The more customer data that you have the more you can tailor the content that reaches your customers. The more personalised your content is to each customer’s interests, the more likely they are to return to your business and become a loyal customer. 

There are a variety of methods for collecting customer data

  • Third parties
  • Social media
  • Website analytics
  • Customer surveys
  • Loyalty programs

What are the different types of customer data?

There are four different types of customer data that can be collected. They range from trustworthy and direct to large-scale and less specific. 

1. First-party data

First-party data is all data collected by the brand about its customers from its customers. This is the most important segment of customer data that a business can collect because of how reliable it is at predicting behaviours.

Customers are often happy to share information with brands that they are passionate about and so long as the business has a good policy of data protection. 

Here are some ways that you can collect first-party information: 

  • Newsletter sign up lists
  • Website analytics (what terms are most searched for, what products are added to the basket most) 
  • Product recommendation success. When you recommend products to your existing subscribers, how successful are these recommendations at getting purchases.

Second- party data

Second-party data is collected through brand partnerships. This is where two businesses with mutual interests share information on a group of customers to benefit both parties. This data is reliable as it is a trusted source (first-party data from another business). 

For example a hotel could share its customer data with an airline. The hotel benefits from flight data and is able to suggest relevant hotels to customers who have a regular travel destination. In turn, the airlines can see patterns in hotel bookings and suggest offers for certain flights to those locations. 

Third party data

Third-party data has been collected by a third entity and has no direct connection to your business or to your customer. The data tends to be about large quantities of customers in general such as age groups, gender, or geographic location. This means it is a lot less personalised. 

Third party data is declining in popularity as privacy laws tighten and customers are becoming more apprehensive about how companies know information about them that they have not offered up directly. 

Zero party data

Zero party data is information directly shared with the business by customers. This can be the tick-boxes for how your brand can contact the individual, or what purchases the customers have made.

Sometimes called explicit data, zero-party data is an authoritative, and trustworthy form of customer data. 

‍Why is this important for my business?

Customer data provides your business with up-to-date information about your ideal customer and your current customer base. This allows you to: 

  1. Making informed decisions about the types of products and services you offer.
  2. Plan future marketing strategy that suits the preferences of current customers and your ideal customer profile alike.
  3. Manage expectations for pipeline products and make adjustments to predicted sales.
  4. Understand your customers better. You’ll know whether you are providing a service that is interesting and relevant to your audience and get insights into the direction that you could take your brand in. 

It is important to gather as much zero and first-party data about your ideal customer, and current customer base as possible. This is because cookies are declining in popularity and you will need to rely on customer data to make informed decisions about your products and services. 

With customer data you can rebrand products so that they are more appealing to your ideal customers, expanding your current customer base and reliably generating more revenue for your business. Without customer data, you are relying on sheer luck, which will run out in the long term. 

Important times of year 

There are certain times of year that you need to capitalise on. During the holiday season and on days such as Black Friday or Cyber Monday, customers are more likely to purchase your products. 

With more customers shopping, you should be collecting more customer data. Encourage online quizzes to see the purpose of your shoppers’ visits, use pop-ups to offer email marketing services, or add a ‘do you like this product’ button beneath general suggested products. Then you can store this information to create personalised email marketing or analytic data.

The busy seasons are also when you should be using the customer data that you have already collected to offer customised product choices and exclusive deals to your subscribers. This can be via email marketing or tailored social media adverts.

Remember, the information about sales during the holiday season is not going to be applicable to the rest of the year if you are including certain dates in sales analysis and trends.

Customer data trends

Information released by Statista.com in June 2021 revealed that 61% of UK customers and 32% of US customers tend to accept cookies when visiting a new website. In a world of tighter privacy regulations, customers refusing to accept cookies are forcing new trends in customer data collection. 

No more cookies

Apple browsers already automatically block third party cookies and with Chrome announced in 2021 that it will block third-party blocking in 2023, a marketing world without cookies is coming. Brands who want to weather the change should start making adjustments now. 

A wise word from us to you: brands who focus on collecting first- and zero- party will be the ones that arrive in the cookieless world leagues ahead of their competition. 

How do we get around this?

There are a few innovative ways that businesses and brands are trying to gather the same customer data without third party data and cookies. Here are three of the best ideas we’ve seen: 

  1. Fill the space left by third-party data. Not only is this data more reliable but customers know where you have got the information from and feel heard by your brand. 
  2. Create interactive quizzes, ‘do you like this product’ buttons, or a tinder-style swiping section on your app for your products and services. These can help you make direct recommendations by more formal methods such as tailored emails.
  3. Transparency about how the data customers give you is used. This encourages trust in your company in the hopes that customers feel more comfortable sharing information with you. 

Collecting customer data

Here are a few things to bear in mind when collecting customer data.

  1. Incentivise customers to share
  • Say thank you to customers for giving you personal information with a short message and a discount code. 
  1. Create authentic, pertinent content
  • The content that you send to customers with the data they have given you should be relevant to them particularly (or at least as relevant as you can make it). Any information about their demographic should be used to create personalised content. Remember the data is valuable to you so you should provide value in return. 
  1. Trust is essential 
  • Customers need to feel that they are giving their information to people who are not going to sell their email addresses to third parties for profit. Be honest with how their information will be used and only use data as you say you will.
  1. Lean into loyalty
  • Whatever information you can gather about your customer, use it to create segmented email lists. Build on this with personalised quizzes and other forms of data collection to form communities within your email segments. Create personalised content for these communities and plug these on your social media channels. 
  1. Ask for feedback 
  • Surveys, reviews, and questionnaires can provide your brand with some of the most relevant first-party data. This information will highlight areas for improvement, informing your brand why you might not be selling a particular product, or why purchases are not converted into loyal customers.
  1. Use web analytics
  • Track user behaviour on your website to see which products are added to the basket, which images are paused over most, what is most searched on your website, and which pages are popular. 

Validating customer data

So after you have collected all of this data, how do you know it is real and worth including in your analytics? After all, you can spend thousands of pounds on marketing campaigns that are unsuccessful because the data collected is incorrect and inaccurate. 

  • Quality control 
  • It is difficult to filter the good data from the bad because ultimately people can submit incorrect information and there is very little you can do about it. 
  • Some brands have a filter that nullifies lower quality data such as accounts created with the same email address 
  • Validate the data you have 
  • Code check. 

This check makes sure the inputted data is valid (phone numbers/postcodes)

  • Uniqueness check.

This check makes sure data only appears once in a data set.

  • Data type check.

This check makes sure the type of information is in a valid format. If the field requires letters, then all numerical entries are voided. 

Analysing customer data

This is the final step in transforming your hard work into increased profit. Here are four top tips on analysing customer data. 

  1. Segment your data

All customers were not created equal. Segment your data to better transfer your mini communities of customers. This allows you to send tailored email marketing, which is in turn more likely to transform interested individuals into loyal customers. 

  1. Use data warehouses

Data warehouses store all data from a multitude of sources. You can then use this data at a later date. Make sure you keep coming back to your data warehouse over time as your customer base can shift and looking at the larger picture of customer trends over a longer period of time, can improve your predictions and help you better pitch future products to customers. 

  1. Determine customer cohorts

Customer data can be used to look at the differences in purchasing habits between certain demographics, age groups, or product preferences. (Is there a certain service that seems to appeal to all ages while only 45-55 year olds look at the rest of your range?)

  1. Act on customer data

Make sure your campaigns are always relevant to the customers who have trusted you with their data. Refresh your marketing campaigns regularly to ensure new content reaches the people who care about it. 

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Nathan Hoare

Digital expert with extensive global marketing experience