How to Data Mine Your Small Business Customer Information - dummies

How to Data Mine Your Small Business Customer Information

By Barbara Findlay Schenck

Research your current small business customers and track the information so you can better target them with marketing. Customer information you collect helps retain current customers and reach more people just like them. People with the same profile as your current small business customers are apt to become customers as well. That’s why target marketing starts with customer knowledge.

Do-it-yourself small business customer information collection

Start by focusing on information you can collect through customer communications and contacts:

  • Collect addresses from shipping labels and invoices in order to group customers by location and purchase type.

  • Monitor the origin of incoming phone calls.

    • When prospects call your business, find out where they’re from and how they found you.

    • Use the caller identification feature on your phone to collect the incoming phone number prefix and area code, which will enable you to track the geographic origin of customer calls.

    • Your phone service provider may be able to furnish lists of incoming call area codes or dialing prefixes for your reference.

  • Track responses to ads and direct mailers. Include a call to action that inspires a reaction. When prospects respond, collect their addresses and other information to build not just a database but also an inquiry profile.

  • Study web reports to learn about visitors to your website. Work with the firm that hosts and manages your site to discuss available reports and how to mine the information you collect. Also, enter your web address into Google Analytics to access data about site visitors, including their geographic origin, language, and other facts.

    Be aware, though, that some internet providers hide the geographic origin of users under the label “undefined,” and others bundle all traffic, which means you may see a good many site visitors from a distant location not relevant to your business.

  • Survey your customers. Use online survey services available through sites such as Survey Monkey, create and e-mail a survey to customers on your own, use contest forms to collect information, or if your business attracts foot traffic, survey customers in person.

    When surveying customers, be sure to share your company’s privacy policy to assure customers that you respect and protect the information you collect. If you collect information online, visit the website of the Online Privacy Alliance and click “For Businesses” for policy guidelines.

    One other caution: Many retailers request zip codes before processing credit card transactions, both to aid in fraud prevention and to obtain customer data. In 2011, the California Supreme Court ruled such requests illegal. Learn the rules in your state before posing the question.

  • Observe your customers. What kinds of cars do your customers drive? How long do they spend during each visit to your business? Do they arrive by themselves or with others? Do those who arrive alone account for more sales or fewer sales than those who arrive accompanied by others? Where do they pause or stop in your business?

    Your observations help you define your customer profile while also leading to product decisions. For example, a retailer may realize that women who shop with other women spend more time and money, which may lead to a promotion that offers lunch for two after shopping on certain days of the week. A motel may decide to post a restaurant display at a hallway entry where guests frequently pause.

Use pros to collect small business customer data

Doing it yourself doesn’t mean doing it all on your own. As you’re conducting customer research, here are places where an investment in professional advice pays off:

  • Questionnaires: Figure out what you want to learn and create a list of questions. Then consider asking a trained market researcher to review your question wording, sequence, and format. After your questions are set, you can distribute the survey on your own or with professional help.

    Either way, have someone with design expertise prepare a questionnaire that makes a good visual impression on your business’s behalf. Include a letter or introductory paragraph explaining why you’re conducting research and how you’ll protect the privacy of answers.

  • Phone or in-person surveys: Professional researchers pose questions that don’t skew the results. When you ask the questions yourself, it’s easy to let your biases, preconceptions, and business pressures leak through and sway responses. Plus, customers are more apt to be candid with third parties.

  • Online surveys: Professional online survey tools are free unless you want to reach very large survey groups, in which case reasonably priced packages are available. If only a portion of your clientele is active online, be sure to accompany online surveys with off-line surveys in order to capture the opinions of those who don’t use the Internet.

  • Focus groups: If you’re assembling a group of favorite clients to talk casually about a new product idea, you’re fine to go it alone. But to get opinions from outsiders or insight into sensitive topics such as customer service or pricing, use a professional facilitator who is experienced in managing group dynamics so that a single dominant participant doesn’t steer the group outcome.

To obtain outside assistance, contact research firms, advertising agencies, marketing firms, and public-relations companies. Explain what you want to accomplish and ask whether the company can do the research for you or direct you toward the right resources.

Another good starting point is the Association of Small Business Development Centers.