Digital Dudes™ Live Series #4
This week on the Digital Dudes™ Q&A on Facebook Live, we looked into why your social media profiles aren’t actually free. Have you ever wondered how it is that Facebook can offer you a free profile but still be worth $522 billion? It’s because Facebook has something even more valuable than your money. They have your data.
Data is Money
Data is becoming the new currency of the world economy, and it isn’t just limited to online only businesses. Digital marketing carries the distinct benefit of being able to track every interaction online, but how can you track people in a store? If you “cookie” someone online, you find out every action they take on your website, but if you gave them a cookie in a store, they’d probably just eat it.
The answer is rewards cards. These are a unique identifier, like an Internet cookie. Your card is tied to you, and when you swipe it at the register you don’t just get a discount or earn rewards points, you also create a record of everything you have purchased.
Over time and across many individuals, this allows a retail store to learn:
– What your demographics are
– How far you’re willing to travel to visit their stores (you probably gave them your address when you signed up)
– What someone who fits your demographic profile typically spends and what products they’re most likely to buy
Retail stores can also use this information to segment their customer base (just like you would segment an email list) with targeted coupons and other offers they know you’re most likely to take advantage of based on your previous purchases. As was the case when Target figured out a teenager was pregnant before her family did, these efforts used to be a lot more transparent to the customer. Now it’s more typical to see these sorts of targeted offers mixed in with other coupons that you’re likely to have no interest in. That way it’s not so obvious to you that retailers know who you are and what you buy.
How Do You Put Data to Work for Your Business?
So, now that we’ve established just how important data is for your business, whether you’re online only, a brick and mortar store, or somewhere in between, how can you start collecting customer data for your own business, and what do you do with it once you have it?
Start with a customer relationship management platform (CRM). Your CRM is a database of your customer data. A good CRM makes it easy to sort and segment your customer list. It is searchable, and breaks out information like name, email address, phone number, etc into separate fields. HubSpot offers a free CRM that would be a great place to start for most businesses.
Once you have a CRM setup, it’s time to start collecting data. You have many options for collecting customer and prospect data. You can get as creative with it as you want, the only real constant is that you’ll need to offer something of value in order to convince people to give up their personal data.
How can you start collecting customer data?
– A physical signup sheet in your business where people can write down their email address to sign up for a newsletter or enter to win a prize.
– A form on your website where prospects can trade their email address for a content offer. The content offer can be as simple as a checklist or as complicated as a white paper or digital learning course.
– A rewards program. New customers will exchange more information for an offer that they know will benefit them now and in the future.
What data should you collect if you’re just getting started?
2. Email address
3. Phone number (maybe, if you really need it)
That’s all you need to identify a customer or prospect and contact them. You want to avoid asking for too much information. Remember that the amount of personal data you’re trying to collect should be on par with the value of what you’re offering for it in return. Also keep in mind that some types of information are more valuable than others. People are more likely to share an email address with you than they are their phone numbers.
What Can I Do With All of This Data?
Now that you have all of this data, it’s time to start drawing some value out of it for your business.
1. Segment your list into similar customers/prospects. This allows you to use different messages when talking to each segment, similar to how Target sends out coupons to segmented lists of similar buyers. Doing this will make your emails and Facebook ads (yes, you can create target audiences on Facebook with email addresses) perform better.
2. Create personalized offers in an email drip campaign. Do you have existing customers you’d like to upsell or turn into repeat buyers? Do you have a list of emails from people that haven’t made a purchase yet but are interested? Setting up a series of emails to go out over time (one email per week over five weeks, for example) can help you convert a larger number of those leads into customers and existing customers into repeat buyers. This works best if you have segmented your email list first.
3. Learn more about your customers. Breaking the data down into smaller segments is great for targeting specific groups of prospects and customers, but looking at larger trends as a whole can help you understand who your buyers are as a group. When starting out most businesses have to make assumptions about who their customers are and how to best reach them. As you collect more data, you’ll start to learn about your actual buyers’ demographics, locations, interests, and other useful information that might help you with making key decisions about your products and your business as a whole.
4. Put your marketing efforts into context. Collecting customer and prospect data can also help you understand if you’re using your marketing dollars effectively. If you’re finding that the people who are filling out forms on your website aren’t people who would ever become your customers, then you know that the people you’re bringing to your website aren’t a good fit for you. That’s the time to make some changes to your targeting to reach a group that makes more sense for you.
5. Win back customers. If you’re tracking when a customer’s last interaction with your business was, you can identify customers that have “gone cold” and haven’t been to your store or website in the last 90 days or so. You can then reach out to these customers with an offer to try to bring them back in, helping you retain more of the customers you’ve already found. It’s always cheaper to retain a customer than it is to find a new one.
Want to learn even more? Watch the recorded livestream below, and read on to the next blog post in our Digital Dudes Livestream Q&A series, where we talk about how to tell if your marketing efforts are working.
If you have any questions or just want to let us know what you think, post in the comments below. Make sure you join us next week, Wednesday at Noon EST, on FUEL’s Facebook Page for the latest Digital Dudes™ Q&A.