Five reasons why customer data is important to your business.
The reality is that many small business owners do not fully understand the importance of customer data when they first start out and some realise its importance when it is too late.
The term customer data includes customer contact details, their historical sales transactions with your business as well as their buying habits and specific products or services that they are interested in.
It is not only important to correctly capture your customer data when you start contracting with them, but it is also important to ensure their data is maintained so that you are able to use that information for future campaigns and promotions.
Five reasons why you should maintain your customer data:
1) Maximise opportunities.
The contact details you have for an existing customer can be used to maintain communication with them. If you have out of date or incorrect contact details you lose the opportunity of maintaining contact with them. Keeping in contact with a customer means that they keep you in mind the next time they require a product or service that you offer.
2) Reduces chance of customer delaying payment.
The invoices that you send to your customers must have the correct customer details reflected otherwise your customer may request the documentation to be corrected. If you continuously have to correct invoices this will lead to your employees wasting time on non-value added activities and some customers may even refuse to pay until their invoices reflect the correct details. Delays in customer payments can have a negative impact on business cash flow and so should be avoided.
3) Better customer service & brand loyalty.
Incorrect or missing customer details on invoices can be viewed as being sloppy or disinterested in good customer service. This doesn’t help to promote brand loyalty and can result in customers looking for a new supplier.
4) More effective campaign and marketing activities.
The more information you have regarding the customer’s interests in your products or services the more you can utilise this for future promotions and campaigns. Customers tend to appreciate targeted marketing campaigns rather than being bombarded with marketing material that is of no interest to them.
5) Better lead generation.
Having good quality customer data can provide you with an insight into the buying patterns of customers as well as what motivates and drives them. This insight can help enable better lead generation.
There are various tools that can be used to collate this information. Most small businesses may start out using an excel template to track the information as it is more cost effective. This will work when a business is still small but as it grows the number of entries will increase and so tracking and analysing this data using excel will no longer be efficient. There are also various software programs that can be used to track and analyse this data. The cost can vary depending upon the level of analytics that you would want to do. Bigger companies may look to purchase CRM specific software but my suggestion for small to medium businesses is to consider an ERP(Enterprise Resource Planning) system which includes customer data management and customer relationship management within it. An example of a good ERP system is Uniconta. It has recently been released in South Africa and it offers really good customer data management as well as a customer relationship management module for creating email lists and campaigns. If an ERP system is not possible in your current budget then an excel CRM template can be used. You can request a free excel template from us by clicking on this link.
I have had a lot of small businesses question the importance of customer data and those that do not understand the importance have generally kept messy records where the data is either missing or incorrect. The fact is regardless of your budget and size of business this is an important area not to ignore. No customer will want to do business with someone who can’t be bothered to maintain their details accurately and securely or even treat them personally by reaching out to them for the specific items that interest them. The extra attention to detail and personalised service that can be provided by maintaining good customer data is invaluable and will be appreciated by your customers.
If you are interested in a free demo of the Uniconta software please contact Somerset Squared using this link.