We understand that getting into the world of data is a daunting thought for any new business owner. However, nowadays, it is vital to understand the types of data you can collect and use to improve your customers' experience and your marketing strategies. Depending on what your business does and how you operate, you may have different classes of data that you either process or control.
It may be that you already use some types of data regularly in your business, or maybe you haven't yet worked out what data you have and how you can use it. The following list includes some of the most common ways businesses can start collecting and using data to make decisions in their businesses.
Protecting your customers' data - GDPR and The Data Protection Act 2018
Before getting into customer data collection and analysis, it is essential to be aware of the data protection laws that all businesses must follow.
General Data Protection Regulation (GDPR) governs how organisations collect, store, and use data. It specifically refers to the use of personal data, which is any information that can be used to identify an individual – name, address, email address, etc. Understanding and abiding by these regulations are crucial for your business, as breaching them can result in hefty fines and reputational damage.
In the UK, GDPR works along with the Data Protection Act 2018. This is the legislation which makes GDPR law in the UK, as well as providing further legislation for certain circumstances (which GDPR on its own does not cover)
There are seven fundamental principles of GDPR that businesses need to follow (we've handily outlined these below). The Information Commissioner's Office (ICO) is the UK's independent authority on GDPR, and you can find an extensive guide to these principles here.
Lawfulness, fairness, and transparency: You must have a valid reason to collect personal data, and you must also be transparent about how you will use and process the data.
Purpose limitation: You must only collect personal data for a specified, explicit and legitimate purpose.
Data minimisation: You must not collect more personal data than is needed for your purpose.
Accuracy: You must ensure that the data you store is accurate and update data if necessary.
Storage limitation: Personal data must not be stored for longer than is necessary, and storage must be justified. You must review the data you have and erase any data you no longer need.
Integrity and confidentiality (security): You must ensure that you have proper security measures to protect personal data.
Accountability: This means that you must be prepared to take responsibility for the personal data you collect, store, and process.
Google Analytics and User Behaviour
Google Analytics is a free and easy-to-use platform that gathers insights into your website visitors and allows you to analyse the website's overall performance.
Google Analytics collects data such as:
Number of visits to your website
Bounce rates (people who exit the website after only viewing the first page)
How long the average user spends on your website
The age group of your user
Country and language of your user
This service, therefore, allows you to discover user trends, patterns, and demographics, which can all be used to improve your website and future marketing strategies. Google Analytics is a free service, so if you don't have it set up and linked to your website, this is a good place to start.
A CRM (Customer Relationship Management) system does precisely what it says on the tin. It helps you to effectively manage relationships with your customers by creating a database of information that allows you to see every interaction that has taken place with them. This will enable you to understand who your customers are, what they want, and what they expect from your business. This valuable data means that you can then tailor your marketing strategies in response and give them a more personalised experience with your business.
If you would like to understand CRM systems in more depth, then take a look at our handy guide here.
Zero Party Data
Zero party data is a relatively new term, which can be summarised as data that a customer freely gives to a business. This type of data usually includes customer preferences, needs, or intentions. Zero party data depends on a level of trust between you and your customer and allows you to offer them a personalised service based on their individual needs.
Many brands aim to collect zero party data in interactive ways, particularly when a customer first becomes aware of their business. For instance, by offering a style finder quiz on the homepage of a jewellery brand or collecting interests and preferences when a customer registers an account. This provides the customer with a mutually beneficial exchange - sharing their data in return for a more personalised experience, and this can lay the foundations for a lasting relationship.