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How Small Businesses Turn Data Into Better Customer Experiences

“Big Data” is a bit of a misnomer. It conjures images of server rooms and teams of data scientists. For a lot of small business owners, these images indicate that big data is too much (and too expensive) for their companies.

But that’s far from the truth. Businesses of any size and scope can tap into data to achieve real business goals — from improving operations to getting ahead of consumer trends. One such goal that most companies have: Making the experience of doing business better for the customer.

Your customer data can help you better understand the needs of your customers and it can show you what steps you can take to meet those demands more fully, writes Megan Totka, Marketing and Editorial Director at ChamberofCommerce.com. With that kind of data, you can glean insights into your sales process (like which aspects are confusing customers), your customer service (which support requests crop up frequently), and your overall product (like the most requested features).

Then, you can begin to use that information to create impactful customer experiences.

How Data Improves the Customer Experience

Your customers’ experiences with your business are among the most important factors in your ability to stay competitive. Customers want to feel understood, and that understanding must drive how you conduct business with them.

To do that, you have to learn more about your customers.

That’s where customer data comes in. It gives you real-time insights into what is going on in the minds of your customers, says Daniel Newman, Principal Analyst of Futurum Research. That higher level of listening, Newman notes, translates into better engagement with your customers.

Gathering Your Customer Data

The first steps on this journey include identifying your customer data sources and consolidating that information. The information you need on your customers exists; you just have to figure out how to pull that information together into practical intelligence. So, where is that information? It gets generated during every interaction a customer has with your company. Ryan Kh, CEO of Catalyst for Business, notes some of the most common sources of data for businesses:

  • Transactional data This data includes what customers purchased and what promotions or coupons they used during purchases.
  • Digital analytics Website and social media traffic data — Google Analytics is a powerful tool for collecting this type of data.
  • Loyalty programs Delivers data on customer browsing and shopping habits. Customer loyalty programs are insightful because they allow businesses to collect both transactional and non-transactional data from one source, as the team at CrowdTwist explains.
  • Customer service data Data that can be tracked in support tickets and inbound help requests. It can tell you what customer issues crop up most frequently, how satisfied your customers are with you, and also how quickly your support team is responding to customers.

Even services-based businesses can tap into these data sources. A financial advisor, for example, could have a website with social media presence on Facebook, LinkedIn, and Twitter. A tool like Google Analytics would reveal what proportion of website traffic arrived via those social sources. If the majority of visitors were arriving via LinkedIn, that would be a cue to devote more time and energy there instead of Facebook or Twitter.

A crucial point: Don’t try to gather every single piece of information from every data source. This will quickly overwhelm you and lead to what is known as “data paralysis,” warns Chris Stephenson, cofounder and CEO of analytics company Topos Labs. Stephenson says to give context to data by asking questions and setting goals, which helps you focus your data-gathering efforts.

For example, a goal might be to improve customer support response times. To do this, you could analyze where your customer support requests are coming from (e.g. phone, in-person, social media) and what your average response time is for each of those.

Once you know where to get your data and what you want to learn from it, you’ll need to consolidate it in a way that makes it actionable. Spreadsheets are a good way to organize some data, but only at a very small scale. As your cache of customer data grows, spreadsheets will become too complicated to manage. This is often the point when businesses begin to explore customer relationship management (CRM) software as a more robust way to capture and manage data.

Finding Opportunities in Your Data

As you settle into a habit of collecting and analyzing the data you capture, keep an eye out for patterns that may emerge, as researcher and industry analyst Luke Fitzpatrick describes at Business.com. Purchase patterns, website browsing patterns, and even foot traffic patterns in a physical store can highlight specific trends about your customers.

Once you recognize customer patterns, you can anticipate customer behaviors. Imagine you look over five years of sales data and notice a slight seasonal rhythm of ups and downs. This knowledge will help you prepare for future seasonal swings. When it’s time for a surge of business, you can ensure your customer support team is ready. During the downswings, when business cools off, you can then prepare to focus on your marketing and outreach.

In each phase of that cycle, then, your energies and your team’s focus will be more in harmony with your customers’ needs.

Personalizing the Customer Experience

Given the choice, customers will almost always choose to do business with a company that personalizes the experience. Data-driven personalization may sound like a daunting task, but it can be done even with limited resources. The key is to start small — going one small step at a time lets you measure and see what works, then adjust course accordingly.

A good starting point would be milestones “like birthdays, membership anniversaries or a customer’s last visit,” says Cassandra Schwartz, now the VP of Strategy at marketing company Partnerd. A warm greeting plus a timely promotional offer has long been a winning formula for a welcoming customer experience.

Don’t be afraid to roll your strategies out one touchpoint at a time, either. If your customers rely heavily on phone-based support, focus your efforts there. You could start by cutting your response times, then experimenting with staffing levels to make sure someone is by the phone during the hours that customers are most likely to call.

These are the little gestures that build big relationships with customers. It’s the same work that big corporations do at scale with big budgets, but with the narrow focus and personal touch that gives small businesses an important advantage.

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