How to truly understand your customers through data and insights: The basics

By Jennie Kitchin | 10 Sep 2020

The digital market is competitive.

No matter what your industry – whether you’re selling your services, promoting your products or trying to raise your profile – you’re likely tussling with countless other businesses to get your audience’s attention. But by digging deep and working to understand your customers, you can gain an edge over the competition.

In this blog series, we’ll explain how you can get a better understanding of your customers using data science and customer insights. Starting with the basics, such as having the right tools, we’ll move on to how data science can help, and finally discuss the importance of robust testing.

Customer data vs customer insight

Having customer data and having customer insight are two very different things. You might have loads of great data, but do you have the insight into that data to allow you to make business and marketing decisions?

  • Data is the factual stuff that you collect about your customers, i.e. location, demographic, purchase history
  • Data insights are a little less obvious. They are patterns within your data that you can’t access without some degree of heavy lifting


Getting the basics right

The first step on your data journey should be to get the basics right. You need to be prepared to challenge perceptions and spend a bit of time delving into who your customers really are.

"60% of people searching for ‘baby clothes’ don’t have kids at home and aren’t expecting."

One of the first mistakes people make is to confuse the purchaser with the consumer. For example, 60% of people looking to buy baby clothes don’t actually have kids and aren’t expecting. Also, 50% of beard oil buyers are women.

The key is to not take things at face value, or you could end up alienating a large percentage of your customer base. So, when you’re setting up the target audience for your next Facebook ad campaign, try and think laterally about who might be interested in your product. People buying gifts tend to be happier about spending more – if you only targeted young mums when advertising your organic baby clothes, you’d be missing out on grandparents looking to spoil the newest addition to the family!

"A woman once spent 70 days and interacted with over 250 touchpoints before buying a single pair of jeans."

You need to ensure you invest enough time and effort into your data. Use it to question what you think you know about your customers. Test out different channels to make sure you know what works best for your audience.

We’ve been conditioned to think of purchases happening within a 30-day cookie window, but our data shows that a woman once spent 70 days and interacted with over 250 touchpoints before buying a single pair of jeans. This goes to show that people can convert anywhere between one and 100 days. And once that person has finally purchased, they are likely to remain far more loyal to your brand. The way things have always been measured needs to be challenged.

"The misspelt term ‘roulete’ costs more than ‘roulette’ in Google Ads."

Finally, and most importantly, never make an assumption unless you can test it. You know what they say about assumptions… well, when it comes to your customers that saying really is true!

For instance, the misspelt term ‘roulete’ costs more than ‘roulette’ in Google Ads. The assumption might be that people misspelling the word are less educated, but could it also be that they are just new to online gambling? If that’s the case, then they are a far more valuable customer as they are shopping around and have no loyalty yet. The only way to know for sure is to dig into your data and test, test, test.

What can you do?

Make sure you have the right analytics
The majority of businesses will be using Google Analytics (GA), and for smaller companies that’s fine. But for larger businesses, it might be worth investing in GA360. GA will only track 10 million hits per month before it starts to use sample data, so if your hits exceed this then your data isn’t accurate. GA360 also offers more customer metrics and its data is a maximum of four hours old so is far better for making timely tactical decisions.

Use audience segmentation and personalisation effectively
You already have the data you need to fully understand who your customers are, and there are plenty of tools available to help you segment it. Data management platforms (DMPs) allow you to segment for the purposes of targeted ads. Customer data platforms (CDPs) will take data from multiple sources, create a single customer view, and then segment on that basis. This type of activity is hard to do with a standard customer relationship manager (CRM), so make sure you’re taking advantage of DMP and/or CDP technology. Also, don’t get caught out by having too few segments or too many personas - three to five is about right, eight max.

Give yourself enough time to properly look at data
This is often easier said than done, especially if you’re already stretched and wearing several hats, but it’s very important. You should aim to make analysing data a part of your culture, not just something to do when you have spare time. Do you have the skills and the bandwidth to do this in-house? If not, do you need an agency? It’s crucial to understand what ‘good’ looks like for your individual situation so that you can plan accordingly.

Once you’ve mastered the basics, it’s time to think about data science in more detail. Check out our next blog, How to truly understand your customers through data and insights: Data science.

Or, if video is more your thing, you can watch our full data and customer insight webinar here.