Why Customer Data Matters So Much for Your Business

Superior customer experience, better business decisions and all and all more effective marketing. Reasons why customer data is crucial for your business

Shane Barker
January 14 2019

It’s been over a year since the Trump administration repealed the FCC privacy rules – which had required internet service providers to ask permission before collecting personal information.

A CMO survey found that between 2016 and 2019, spending on marketing analytics is expected to increase by 66%. The same study also found that almost 44% of companies use consumer data to make marketing decisions about customer acquisition.

All this clearly goes to show the value of customer data for businesses. Let’s take a closer look at some of the reasons why customer data really matters.

Customer Data = Superior Customer Experience

It’s not rocket science – in order to provide customers with a great experience, you need to know their preferences and interests. When you know your customers, you can make every interaction meaningful.

That means you need to serve them what they really want. This goes for every product or service you offer – and includes the kind of messaging you use to communicate with them.

80% of consumers say that customer experience is just as important as the products or services a company offers. As such, customers expect businesses to care about them as individuals. 76% of people would like companies to be aware of their expectations and needs, and that is only possible through customer data.

In a market where 54% of people believe that businesses don’t have their best interests in mind, you need to offer something really special – a personalized experience that “wows” them.

Most consumers today would prefer an “Amazon-like” buying experience – one that clearly shows the customer that the company cares about them, by providing the following:

1. A Truly Personal Experience

Based on the items you have browsed or previously purchased, Amazon offers personalized recommendations of products you might like.
Image via Amazon

Not only do they display these products every time you visit their website, but they’re also highlighted in emails that offer discounts on previously viewed or similar products. And some of these emails just want to make sure you’re taking full advantage of your existing subscriptions.

Image via Amazon

59% of shoppers agree that personalization has the power to influence purchase decisions. No wonder Amazon is the biggest ecommerce company in the US, with a net revenue of over $177 billion.

2. Excellent Customer Service

In 2017, 54% of consumers stopped making purchases from businesses that provided poor customer service. If you don’t want to lose half your customers to the competition, you might need to step up your CS. Digging into your customer data allows you to do that.

Amazon leverages their customer data to provide fast and effective resolutions to customer queries. They save your phone number and provide a callback option so that you don’t need to spend hours on hold. Their customer service team has all your order-related and account information at their fingertips, which minimizes any hassles.Image via Amazon

3. Social Proof

Social proof matters in consumer purchase decisions. Almost 60% of consumers have reported that they check out social media and blog reviews before buying a product.

Using customer data, Amazon displays social proof in the form of product ratings and reviews, not only to encourage people to buy, but as a way of showing they care that customers have access to the objective feedback of their peers.Image via Amazon

4. Easy Checkout

Almost 70% of online shoppers abandon their carts just before checking out. 23% abandon carts because they can’t see the total costs up front, and 28% of consumers do so because the checkout process is too long or complicated.

Amazon combats both these issues head-on. They allow you to resume your shopping where you left off, so any products that were in your cart are still there. Plus, they notify you of any price changes to those items – and credit card information only needs to be entered once.

Make customer data the foundation of your customer experience. If you can show how you’ll use their information to provide a better experience, your customers will be more than willing to share it.

Customer Data = Better Business Decisions

Data is at the heart of every impactful strategic decision. Without implementing data-driven policies, you’ll be playing a guessing game and you’ll lose more than you gain. Relevant customer data can help answer questions like:

  • Which segment of customers brings in the most revenue?
  • What are their common characteristics? Do they belong to the same geographical region, income group, educational background, or age group?
  • Which segment of customers buys a particular product the most?
  • Which products are particular segments more inclined to buy next?
  • Which of your customers churned and why?
  • How should you price an upcoming product and which segment should you focus your marketing on?

The answers to these questions can help you make key strategic decisions that will push your brand forward. Whether you want to study the feasibility of launching a new product, enter a new market, or build better relationships with your customers – you need customer data.

Customer Data = More Effective Marketing

Did you know that it’s five times more expensive to acquire new customers than to retain your existing ones?

The simplest and easiest way to keep your customers happy is through knowing who they are and where they can be found.

Which social media channels, for example, do they frequent? What kind of content do they prefer to consume, and in which formats? Knowledge of such information will help you focus your marketing efforts.

It will help you decide what kind of content to produce and which marketing channels you should use. If your customers are mainly baby boomers, should you focus on Facebook, or Instagram? Or are emails a more effective communication channel?

The better you know your customers, the easier it is to retain them. A study found that consumers are 1.3 times more likely to find value in personalized communication forms such as emails or newsletters. And they’re 1.1 times more likely to find retargeted offers important.


Customer behavior has undergone a huge change over the years. What consumers may have liked a few years ago doesn’t necessarily stand true today. Market changes require marketers to come up with new ways to woo and retain target audiences.

If you fail to understand your customers and their pain points, you’re leaving money on the table. Customers who don’t feel valued or understood will quickly switch to another brand and likely won’t return.

Customer data provides a way for marketers and business owners to make better decisions and provide experiences that customers will cherish. It’s time you leverage customer data to provide the experiences they didn’t know they wanted – and those they did, too.

Can you think of other ways that customer data can help businesses? Please let us know your thoughts in the comments below.


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