How Your Business Can Thrive With A Data-Driven Customer Strategy

With an explosion in the quantity of data produced, the availability of analytical tools, and advancements in cloud storage, the past decade has firmly marked itself as one dominated by the data industry. Across the globe, businesses turn to the power of data-driven decision-making to shape, hone, and influence their strategies.

Of the various deployments that data offers in business strategy, one of the most impactful is within customer-facing strategy. The vast majority of companies, nearly 93% of US businesses, see their customer experience as a primary or partial competitive differentiator. Yet, building a winning customer experience goes beyond just giving the customers what they think they want.

On the contrary, the key to honing your UX and overall customer experience comes down to understanding the data that customers generate and putting it to use. In this article, we’ll explore various strategies that companies can use to develop a winning customer strategy by using data-driven decision-making.

Let’s dive right in.

Don’t Forget About First-Party Data

Before we explore the methods that businesses can use to hone their customer experiences, it’s important to remember that data can come from many sources. While one of the primary sources of customer data will be through interaction with your website, this isn’t the only resource you have available to you.

First-party data, the information you garner from directly asking your audience, can provide vital insight when developing a customer strategy. Using surveys that you trigger upon certain interactions – like buying a product – can bring in a whole new perspective that you can use in your strategy.

While other forms of data will be vital, don’t overlook how valuable first-person accounts can be.

Focus on Personalization

Over 70% of customers expect a high degree of personalization when shopping with a company. In this context, personalization means more than just using a customer’s name in emails. It refers to catering the customer experience to that person, including product recommendations and other small changes that directly relate to the individual.

Data has allowed personalization to become more effective than ever before over previous years. Companies can collect customer demographic and psychographic information like the following to hone the experience they offer:

• Customer location, name, and age
• Income and job role
• Buyer persona (sale buyer, impulse buyer, etc.)
• Gender identification

Across the board, the more information you gain about a customer, the more effective your customer strategy can become for that person. If all companies had unlimited resources, we could create deeply personalized experiences for every single customer. However, with limitations, most companies instead focus on segmentation.

By using psychographic and demographic factors like those listed above, you can create smaller user segments. For each of these segments, you can analyze the data to then create a more precise customer strategy for each group.

When you offer data-driven personalization, you can get closer to what every customer is looking for in your business. Over time, this will lead to more interactions, boosted sales, and a higher degree of customer satisfaction.

Democratize Access

A major issue that many businesses face when they attempt to scale their data infrastructure is encountering data silos that prevent employees from making the most of company data. Perhaps one department feeds its data into a different repository than another, or some teams simply don’t have complete access to necessary information.

Whatever the story is, businesses should endeavor to democratize access to data as quickly as possible. One method of doing this is to move toward more flexible and accommodating forms of data storage. For example, businesses could use a centralized cloud data warehouse or another form of large-scale data storage.

Many segments of data architecture offer a range of features that not only help to defeat data silos but also add a range of integrations that enrich your data. For example, businesses could use a federated query engine to increase the speed of self-service analytics. For example, when comparing Presto vs Athena, two popular options, we can see that both offer the ability to conduct detailed analytics, even if you’re only just getting started with data-first strategies.

While investing in data architecture may seem costly at first, a fundamental infrastructure will provide the base for all future data-first possibilities. Data democratization, in whichever form you choose, will help boost access and ensure that your entire business can utilize data to its full potential.

When your business has full access to all of its data without any impediment from silos, you’ll be able to collate and analyze customer data to extract insight with more efficiency.

Focus on Small Changes

An impactful change that the world of business has begun to experience over the last few years is the sheer speed with which customer sentiment can change. With direct access to a business at any time of day, companies need to be aware that their customers will interact with them at all times.

With this in mind, some companies start to collect customer interaction data to find larger changes that they can make to their business. For example, they may see that many customers aren’t interacting with a homepage to the extent they want. The first response to this may be to launch into a total redesign, which may take weeks or even months.

Yet, upon launch, they may notice exactly the same problem. This usage of data not only wastes time but can result in a less-than-effective improvement after development cycles have finished. On the contrary, businesses should use data in small sections. Instead of a complete redesign, focus on using A/B testing on different changes on your site to find small but powerful alterations you can make.

Focusing on small changes will allow your business to make purposeful modifications to your content or website that will lead to larger improvements over time.

Final Thoughts

Customers expect a flawless experience when they interact with a business. Now, by using the power of actionable insights from data, companies are in a position to give them one. Over time, businesses can shape every single aspect of customer engagement, constantly refining their offering to provide users with the best possible experience.

By using the strategies outlined on this list, businesses can more effectively manage their customer data, unite different sources, and craft a winning interaction strategy for 2024 and beyond. From improving the UX of your website to honing how you craft customer-facing materials, data will lead the way toward flawless interaction with your customers.