What Is Customer Data?

By Indeed Editorial Team

Published April 20, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Customer data is a key element in improving a business. It acts as a continuous supply of reasons to improve a marketing campaign, edit an advertisement or create a new product. Learning what customer data is and why analyzing it can help your business is one of the first steps to a better customer experience. In this article, we explain what customer data is, the three types of customer data and why analyzing this data can help you improve your business.

Related: 10 Marketing Strategies To Grow Your Business

What is customer data?

Customer data is the information you receive when customers interact with your business media pages. These pages can be websites, mobile apps, social media pages, survey pages, campaigns and other online or offline renditions of your business's marketing efforts. Business strategies rely heavily on customer data. Organizations that are more reliant on data, such as media-based businesses like streaming services, understand that collecting customer data enables them to adjust both their business strategies and customer experiences simultaneously.

Why is customer data important?

Customer data is important because it allows businesses to optimize platforms through understanding various aspects of a customer's interactions. Using customer data, businesses can not only streamline websites that they own and show to customers, but they can also optimize advertisements and product suggestions for specific customers using their data. With customer data, businesses can learn things such as:

  • What devices a customer uses and how often

  • What products a customer buys

  • Reviews for products that a customer writes

  • Surveys and feedback that a customer leaves

  • What advertisements a customer reacts to, or ignores

  • Customer hobbies, interests and goals

With customer data, a business has almost everything it needs to improve customer experience, optimize the businesses media and improve sales and audience retention continuously.

Related: Promoting Products: A How-To Guide

Types of customer data

Customer data is divided into three general types. Each type is determined by what interactions produce the data, how much data is stored and for what purpose each data piece is collected. Depending on business type, businesses may use some or all of the data types. Customer data within a business is willingly entered upon contractual agreement or gathered through customer reaction to business media.

Basic data

Basic data refers to the data that is collected without customer interaction. Instead, basic data is a collection of information about a customer designed almost only for advertising. Customer profiles are created, initially, off of basic data alone. Without basic data, much of advertising, even with the other two data types, would be challenging. Examples of basic data include:

  • Current name

  • Occupation

  • Location

  • Gender

  • Income

  • Annual revenue

  • Industry

  • Phone number

  • Job title

  • Email address

CRM programs or Customer Relationship Management programs often use basic data to categorize large volumes of customers into groups collected by commonly shared attributes. It can segment easily audiences into categories as a first step into the improvement of a business' customer experience.

Related: What Is a Customer Relationship Management (CRM) System?

Reactionary data

Reactionary data, often referred to as behavioral or engagement data, is data that is based on interactions between a business media and the customer. Skipping an advertisement, or watching it are both reactions that can be gathered into a customer's profile with reactionary data. Examples of reactionary data include:

  • Page views

  • Downloads

  • Social media sharing

  • Emails

  • Account logins

  • Free trail sign ups

  • Documented feature usage

  • Account or license deactivation

  • Account upgrades or downgrades

Understanding a customer is what reactionary data aspires to accomplish. By documenting various reactions of customers, the media they interact with can transform to suit common customers' preferences, and grow the interaction rate consistently. Reactionary data helps businesses observe a buyers' path from discovery to purchase. Reactionary data is best equipped to raise ROAS, or return on advertising spending, by optimizing business media in favor of customer purchase.

Reactionary data also has an opportunistic use in technology businesses, using free software installed in products to collect almost infinite reactionary data for every single customer. Reactionary data is one of the most commonly sought after types of customer data to be collected, simply because of its candid and natural nature.

Opinion data

Opinion data is the data that is gathered from customer opinions regarding a service or product. It helps gauge what customers think about the business and solutions a company provides. Opinion data is the only type of data that presents a first-hand account of the customer's view, representing a purposeful, presented answer to specific questions or scenarios. Examples of opinion data include:

  • Product reviews

  • Product comments

  • Surveys

Opinion data allows for the customer to articulate a response to specific products, experiences or other aspects of a business. While more specific than reactionary data, opinion data requires a conscious interaction and time from the customer. However, customer feedback is essential for specific detail and provides valuable insight into the customer's experience. The more specific a piece of customer data becomes, the more precisely the data can be used.

Related: 26 of the Best Survey Software

Benefits of analyzing customer data

Analyzing customer data and creating customer profiles benefits a business in more ways than one. Analyzing just even one type of customer data can help manage and categorize customer needs. If customer needs are categorized properly, a business can advertise a product more desirably or raise a product price under new justification that is determined by customer data.

The major benefit that comes from analyzing customer data is present in the long-term goals of the business rather than in short-term goals. Understanding customers can streamline the current marketing campaign and a future one. However, as data continues to accumulate, marketing campaigns can be further adjusted and optimized for even more impressive efficiency.

Customer data allows for an insight into a business's better future where advertisements return better value and customers stay engaged for longer. By using customer data, the efforts a business takes today can be used to further advance efforts taken tomorrow.

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