Category: Marketing

Understanding Customer Data Modeling

Understanding Customer Data Modeling

Whoever said “Ignorance is bliss” probably wasn’t standing at the helm of a business empire and responsible for revenue growth. Sure, there are things in life we’re better off not knowing, but the ticks and tangles that influence buyers’ decisions to do business with us isn’t one of them.

With ever-encroaching competition, it’s more important than ever to learn what turns candidates into customers, and then leverage that intellect for higher conversions. And that’s exactly the cue taken by Customer Data Modeling.

I. What You Need to Understand About Customer Data Modeling

The name itself sounds complicated and intimidating, but don’t let what you don’t understand scare you. Customer Data Modeling is actually a useful tool that, when analyzed correctly, provides fundamental particulars about your customers that might otherwise be overlooked.

If you’ve been in business long, then you know the importance of maintaining “rigid flexibility.” That is, you know the end result you want, but you may have to adjust your plans on how to get there. Customer Data Modeling gives you clear visual representation of pertinent information about your customer base that you can use to redirect your marketing efforts to reach your goals.

What You Can Learn From Customer Data Models

You’ve got mounds of valuable insights sitting in front of you already: your CRM, testimonials, surveys, referrals, loyalty programs, email analytics, and so on. But if you don’t take the time to sculpt that information into something useful, you’re selling yourself short of golden opportunities to engage with your customers and discover how you can make your products more relevant to them.

Your data collections can tell you where your business is coming from, who your best customers are, which products and services are generating the most revenue, and how much churn to expect in a given year. But through combing several pieces of information into a model and seeing how they relate to each other, you can make sharper connections and bolder predictions to build a healthier bottom line.

II. How to Construct Customer Data Models

There are countless ways to model customer data and transform it into something of value. Data is everywhere these days, but given its size and continual growth, you can’t rely on insight to simply happen. Oftentimes we become so involved seeking gems in the data mine we neglect to chisel those gems into usable insight.

Ask any market research expert, and they’ll preach about the importance of using frameworks to sift through the noise and hone conclusions based solely on what’s relevant. Frameworks provide a sound foundation to construct your data models, but also provide boundaries to prevent data overload from spiraling out of control. Let’s take a look at some examples:

SWOT-TOWS Analysis

A classic framework used by market researchers, SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Using this simple framework gives you specific targets to look for in your customer data repository: Discover what customers like about you, what they don’t like, what they want that you can potentially provide, and what might prevent you from providing it.

TOWS, on the other hand, combines two of the elements from SWOT to help develop a more distinguished strategy. Ask yourself:

  • How can my strengths help me to capitalize on my opportunities?
  • How do my weaknesses prevent me from cashing in on my opportunities?
  • How can my strengths negate my threats?
  • How do my threats and weaknesses combine to limit my potential?

Scenario Planning

When George Santayana said, “Those who don’t learn history are doomed to repeat it,” he probably wasn’t talking about a sales environment, but the shoe fits. Every interaction you have with  a prospect is unique – and ultimately should be treated as such – but that doesn’t mean you won’t encounter similar situations in the sales cycle.

Scenario planning helps you predict customer behavior in future interactions. Make sure you document any and all information regarding the sales cycle for every prospect. Learn what challenges the salesperson encountered, and how they overcame those challenges. Specify how the prospect learned about your company, what piqued their interest, how they first contacted you, what questions they asked, what makes them need your product, and any other information that may rear its head in a future situation. Most importantly, establish a way to make this information available to anyone who needs it, and make it easily searchable.

Word Clouds

Easier to create than a complex framework, a word cloud is a visual representation of words or phrases of varying sizes grouped together, where larger words are the ones used more frequently. When using a word cloud to model customer data, you can visualize words and phrases customers use to describe an aspect of your business, keywords used to search for your product online, or customers’ potential grievances with your product. From there, you can easily apply this knowledge to one of the previously mentioned frameworks, or develop your own strategy.

If you’re in a time crunch, or you are artistically challenged, this free tool will generate a word cloud for you.

Buyer Personas

A buyer persona is a unique set of information that places you at the customer’s eye level throughout the buying cycle. Using buyer personas helps  you discover a customer’s sales triggers, pain points, potential setbacks during the buying process, and other relevant information that can influence whether they give you their business. Leveraging the deeper aspects of customer data to create buyer personas delivers valuable insight that can help navigate your marketing efforts into a more successful sales stream.

III. Using Customer Data Modeling To Get Ahead

Finding ways to model customer data is only half the battle – you also need to know how to use those models to make predictions. Take a look at your data scheme and start connecting the dots, even if you aren’t sure how those dots relate to each other. Do your customers in New York buy more of Product A in December than the rest of the year combined? Do you close more deals at the end of the month when you offer a certain incentive via email?

The objective is to find common denominators in your endless data collection, and use those characteristics to redirect your marketing efforts. Establish metrics along the way to help ensure you’re heading in the right direction. Continue to update your customer data models to keep them relevant and valuable as new information comes along. And last but not least, don’t feel like you have to include every known piece of information into your data models. It can take some experimenting to determine what’s most important, but once you do, it will be well worth the investment.

Customer Data Management: A Beginner’s Guide

With the ever expanding scope of technology solutions, collecting data on customers and prospects is easier than ever. But how exactly do you get it, and what are you supposed to do with it? Here are the Top 10 Customer Data Management tools for beginners to start addressing the plight of overstocked, underused data, and ensure the knowledge well never runs dry:

1. Customer Relationship Manager (CRM)

Long gone are the desktop rolodex and overstuffed files: nowadays, a CRM is a must to keep customer data on point. Customer Relationship Managers (CRMs) help you track of every shred of pertinent info in a paper-free digital solution.

CRMs are equipped to handle every aspect of your customer interaction, from leads and the sales funnel to client phone calls, customer service and support, documents and everything in between. In return, you can expect increased productivity, an upswing in sales and customer service, and the ability to easily search and filter information in ways traditional filing systems can’t compare.

Small organizations might be able to get by with a free CRM, like Insightly or Zoho. But larger companies with multiple users should look into a higher functioning option, like Salesforce or Freshdesk.

2. Inbound Marketing Tools

If you’re spending too much time casting for leads and coming up empty, it might be time to rethink your technique. Don’t chase: let them to come you. Inbound marketing platforms, like Hubspot, help you attract more leads and close more deals. The secret? People are searching for products every day, and Hubspot helps them get discovered.

Hubspot has the power to help you maximize your content’s SEO, post content to social media channels, collect data from site visitors, construct calls to action, create landing pages, and track customer interests, all in one central platform. You might also want to check out Pardot and Marketo before you commit.

3. Email Marketing Software

Despite the intensity of the CAN-SPAM Act, email marketing is far from dead, especially when you use a professional email marketing program, likeMailChimp or AWeber to fill your recipients’ inboxes. With access to powerful analytics, you’ll hit the jackpot in your data treasure hunt that can strengthen future email campaigns and laser focus your marketing efforts.

4. Survey & Data Generating Software

When the right data doesn’t flow freely to you, the only choice is to churn it out yourself. Sending out custom questionnaires using services like Survey Monkey can help you capture only the info you want to know, then help you analyze it.

5. Data Capturing Solutions

Once you know what types of data will prove most beneficial, you need solid ways to capture it. Companies like KISSMetrics deliver superior analytics that help you strike gold in the customer data mine. Services like DocuSign help you capture digital signatures on important paperwork in person or via email. And companies like Typeform can help you craft beautiful contact forms for landing pages, job applications, customer feedback, and more.

6. Mobile-Ready Solutions

The need for data doesn’t always arise when you’re seated behind your desk. When you’re choosing data management tools, it’s important to look at mobile capability.

With the trending on-the-go work style, it’s imperative to be able to access any important detail at a moment’s notice. Make sure you’ve got full functionality across every device, so you can take care of business at your desk or your dinner table.

7. Automation Assistance

How can a CRM keep track of MailChimp data, record results collected in Survey Monkey, and input all your leads from your landing page? Write down the words “manual entry,” and draw a big red X through them. Then, integrate an automation tool like IFTTT or Zapier into your data mix and never worry about missing a beat.

IFTTT and Zapier allow you to set specific triggers when certain things happen that will, in turn, make other things happen. If you’re using a multitude of data and marketing tools and want to ensure they all speak the same language, automation solutions act as a translator that integrates your platforms without manual entry. It’s a huge timesaver, and definitely worth the investment.

8. Housekeeping & Maintenance

Phone numbers change, businesses move, contacts advance to other opportunities, so it’s essential you employ a database housekeeper to keep your flow of information neat and tidy.

Some helpful hints on maintaining your info:

  • Audit your data regularly. It’s easier if you update or cast out old info as you go, rather than letting it amass over time.
  • Assign responsibility to someone to monitor your data’s shelf life. It doesn’t have to be a full time job (depending on your company size), but hand over ownership of the task to someone who is detail oriented and can tell at a glance if info is worth keeping.
  • Invest in data-cleaning software. Manual cleanup doesn’t always make the most sense, especially when dealing with thousands of entries, so consider partnering with a data cleaning pro. Services like BriteVerify will let you know if an email address is still alive before you click the Send button. Email integrations like MailChimp will cleanse emails from your email list after the first bounce. And solutions like Hooversintegrate with your CRM to continually stream information and keep records fresh.

9. Data Protection

Cyber crime isn’t new – and certainly isn’t going away – so make sure you take measures to protect sensitive customer information. One small data leak can potentially flood your business with customer unrest, so avoid the trust issues from the start. Companies like Falconstor, PKWare, and McAfeecreate robust protection solutions that work behind the scenes and help you prevent hacks and data hijacks. Your customer’s info will remain safe, and in turn, you’ll remain in their good standing.

10. Data Map

There are probably companies out there that can create this for you (and charge a pretty penny), but a data map is something you can create yourself. This involves drafting a bird’s eye view of your overall data strategy and its inner workings, and illustrating how each piece is integrated.

First, make a list of all the programs and solutions that somehow affect your data. This includes all of the tools listed in this article, as well as other programs like call monitoring software, transaction records, and invoicing software. Then, sketch out a blueprint of how each piece connects with other pieces to form your completed schema.

Data maps come in handy when new need-to-know positions are filled or when you’re considering adding a service or new vendor to the mix. It also helps you understand the importance of each data point, and whether or not your company can function without it.

The Beginner’s Guide to Building Buyer Personas

buyer personas

Long gone are the days when we can successfully target our audience based solely on a set of pre-populated demographics. Granted, things like occupation, age, and income do play a vital role in marketing, but it lacks any form of interpersonality. And these days, you won’t get far with your marketing efforts if you aren’t humanizing them at every angle.

When charting your marketing course, the big questions always revolve around who you’re targeting: What do you already know about your customers, and how can you leverage that information to keep them and gain new ones? Getting down to eye level isn’t always an easy task, but developing buyer personas that detail who your customers are on a human level can help answer these questions and make your marketing efforts more effective. Here’s how:

I. Understanding the Buyer Persona Role

Buyer personas are unique descriptions that profile common characteristics of your customers. You can then transform these developed personas into “real” targets of your marketing and sales strategy. Keep in mind these personas are works of fiction, not meant to represent an actual entity, but they should be as realistic as possible if you want them to be valuable.

Your buyer personas will typically include some standard demographic info, but should focus more on human elements, like emotion, sales triggers, specific needs and desires in their industry, and deal killers. Once you start this deep dive discovery, you’ll be able to better tailor your marketing to more likely prospects and boost conversion rates.

II. Why Use Buyer Personas?

What issues and challenges do your customers face, and how does your product help them overcome? A well developed buyer persona can answer that. These profiles are meant to help you visualize the type(s) of customers you want to attract, and help you connect to those customers person to person. Buyer persona can:

  • Help gain and retain more customers
  • Connect with your customers on a personal level
  • Shape and improve your products and services
  • Redirect your marketing efforts in a more successful direction

Simply put, you need to understand your customers better, and buyer personas are a gateway to better customer relations. What problems are they looking to solve? What have their past experiences been with products similar to what you offer? How soon do they need to solve their problem? Knowing a customer’s pain points gives you the golden opportunity to present them with a tonic that will alleviate their gripes and make your company their go-to source. And all these details emerge when you craft buyer personas.

III. How to Create Buyer Personas

There aren’t any hard and fast rules to how a buyer persona should look visually. Likewise, the information to include will solely depend on your business and specific goals. If you aren’t sure how to go about formatting your personas, you can download a free template to get started.

Buyer personas can be as detailed as you like, but try to avoid information overkill if you want  your personas to be effective. Considering too many factors can complicate matters, and  your personas won’t be as valuable to you. You should create a persona for each audience you cater to. Or, if several audiences share similar characteristics, one or two personas should do just fine.

Must-Have Elements

While you will want to include information relevant to your business, most buyer personas contain the following elements:

  • Stage of the sales cycle
  • Decision-maker status
  • Preferred communication method
  • Primary sales triggers
  • Potential holdbacks

Free free to use typical demographic information like age and income, but only if you can combine those factors with emotional, humanized elements like the ones listed above. Other important factors to consider are where your customers look for information (social media, Google, etc), what time(s) of days they need or search for your product, and the main problems you can solve for them.

Gather Data

Using customer data, rather than your own instinct, is a must when creating buyer personas. You already have customer data stored all around you, and here’s how you can tap into it:

Use information already on hand. Start with your CRM: Information like customer lifecycle, net worth, popular products and services, and geographical location are waiting to be discovered and used. Look at past surveys, testimonials, anything that will momentarily place you in your customers’ shoes. See what information is already accessible, then determine if those details could potentially influence buying decisions.

Gain new insight through research. If you have the time and ability to speak with customers one-on-one, bu all means do it. Pay careful attention to how they phrase their answers, as this can lead to additional discoveries from their perspective. If personal interviews aren’t feasible, develop a survey to do the research for you. Services like SurveyMonkey are free to use, plus you can pool the results together for easier analysis.

Never stop collecting data. Every interaction with a customer or prospect is filled with nuggets of wisdom you can use elsewhere, be it a compliment or complaint about their experience or a simple inquiry. When information comes your way, write it down so you can use it later. Even little details that might not be important in the moment can turn into useful insight later.

A Brief Buyer Persona Tip Sheet:

  • Create a persona for every stage of the sales process. Prospects want to feel as though your site or marketing material was created just for them, giving them the answers they’re seeking at any particular moment.
  • To make your personas more personal, consider adding a picture and giving each one a name. This helps humanize the experience, which is what this exercise is all about.
  • Create negative personas. This includes customers who will never buy from you, and customers who do not fall in your target range. This makes it easier to refocus your goals and stop wasting precious time chasing the wrong prospects.

IV. How to Implement Buyer Personas

Once you’re satisfied with the personas you created, test your marketing initiatives to see how well they align with your personas. Ask yourself:

  • Does your marketing address each persona in their stage of the buying process?
  • Are you communicating with your prospects the way they like to be contacted?
  • Have you tailored your message to each persona?
  • Are you using the same terms and phrases your customers use when speaking about your product?

If you answer “no” to any of the above, you’ll have plenty of work afoot. Buyer personas are pointless unless you plan to use them correctly, so track, measure, adjust, and repeat until you get it right.

Customer Data Mining in the 21st Century

customer-data-mining

Let’s say you’re at the supermarket checkout line and you hand the cashier your grocery store loyalty card. She scans it, and you watch the bill drop because of on-the-spot discounts on a handful of items. When you get your receipt, it includes a few paper coupons for a couple of items you saw this week and made a mental note to try next time. Data mining makes it possible.

Maybe you’re home on a Friday night, browsing Netflix. You’ve watched all the episodes in your favorite show, and decide to try something new. It turns out Netflix’s suggestion to you is perfect. Data mining makes it possible.

What is Data Mining?

Data mining is sifting through all of the data collected by a business or organization, searching for relationships so that reasonable predictions can be made with regard to behavior. This kind of activity is most common among businesses that deal with consumer behavior of any kind. With the results of a data mining project, a business can make evidence-based decisions when looking at things like sales and marketing efforts, customer retention, fraud deterrence, and more.

In nearly all cases, because of the sheer volume of data available, and the ability of a computer to analyze data with speed and efficiency, data mining software is used, rather than human staff. With specialized and powerful software applications, a business is far more likely to discover relationships and correlations among data points that might be unexpected.

For example, let’s say you’re looking at smartphone customers of a certain age, with minimum income levels, and at least a master’s degree. It’s possible to assume that these folks would be your best smartphone customers, but maybe your data mining project demonstrates that folks with only a high school diploma are actually your best customers in terms of loyalty, regardless of their income levels.

Or put even more simply, you’re assuming that when someone has an umbrella, it’s because they’re expecting rain, when they’re really planning on using it to keep the sun out of their eyes. Data mining helps you identify the difference, and then know when to sell that person rain boots or sunscreen.

Data Mining for Beginners

In general, the overall data mining process is relatively straightforward. There are four steps:

  1. determine what information to collect
  2. decide how your business will store, maintain, and access data
  3. choose and operate powerful software analysis
  4. use results in business planning

If anything, you probably already have a plethora of data that you are collecting or are able to collect. Here’s where a reliable software application comes in handy – people simply aren’t able to examine the sheer volume of collected data in a way that draws subtle relationships and correlations with efficiency, like a computer program can.

Data warehousing includes the storage, maintenance, and access of data by the organization that has collected it. Storage is relatively cheap, but businesses that collect consumer data still need to worry about privacy and security of this data, as well as the ongoing costs of keeping it safe and accessible.

Choosing the right software analysis program is perhaps even more important than choosing what kind of data to collect. You need something that’s robust enough to handle any queries you have with speed and accuracy. It’s analytical and reporting abilities must meet your needs and expectations, and evolve with your business’s changing needs, as well.

The reports that you receive can be used to support a wide variety of business planning activities, including sales and marketing efforts, retention activities, fraud detection, and more.

Data Collection

While some data collection points are pretty obvious, some might not be; it’s collecting those pieces of information that look like outliers where you may be most likely to find success in isolating unexpected relationships and associations. Those unforeseen relationships can be the most valuable. For example, naturally you’d want to collect names, addresses, and spending habits of your customers. You may also want to collect data about purchased items, days of the week and times of purchases, and more. There’s really no limit to what you can collect because you can’t assume anything is irrelevant.

Data Mining Software

There are several different kinds of data mining software available. Many companies use outside vendor tools. Other businesses use open source or free software options. Each type presents pros and cons unique to your business. A large part of the decision-making about this solution comes down the skill and knowledge of the people in your business who will be running the software, as well as what kind of computing power you need.

Data Mining Models

In broad terms, there are several kinds of models that can be developed from your data and used in decision-making, including descriptive and predictive models.

Descriptive modeling sorts data into categories and looks for sophisticated relationships among those categories. Key types of analysis include identifying anomalies, common characteristics, relationships (primary and secondary), and similarities. This kind of modeling gives you a picture of the past. With predictive modeling, data mining tries to make realistic guesses about future behavior based on complex patterns among known data, and probabilities of future occurences.

5 Things You Can Do With Data Mining

A reliable and powerful data mining program can have real results:

  1. use to avoid churn and detect fraud
  2. strengthen customer loyalty
  3. identify new target markets
  4. “market basket” analysis
  5. trendspotting

Predictive modeling can help you figure out when and why customers leave or commit fraudulent acts, taking the appropriate action to help minimize that behavior in the future. Data mining also helps companies strengthen customer loyalty by recognizing patterns and habits, allowing businesses to reward that behavior through incentives such as special offers, coupons, or discounts.

Thorough analysis can turn up unexpected relationships and lead to the identification and development of new markets for a company’s products or services. Market basket analysis allows companies to anticipate customer needs because if they purchase one group (market basket) of goods and services, they may be interested in certain related items. And finally, data mining allows companies to spot trends, putting them ahead of the curve instead of behind it.