Making data central to customer service

While more businesses are engaging in data collection in order to form a more complete picture of their customer bases, how many of them are actually achieving more insight from the effort?

Writing for MarketingWeek, Matthew Valentine notes that companies need to have the technology and expertise to do more than compile data. They also need to be able to improve customer service with the information and devise smarter targeting programs for marketing and sales purposes.

Organizations can use address validation software and other tracking solutions to maintain a record of their individual clients' preferences and past buying behaviors. This can lead to more effective marketing campaigns and personalized customer service.

Valentine points to a discount retailer, Poundland, which has gradually built up profiles for its various audience demographics. It examines transactional and social media data to understand who is coming into its stores and to get a better idea of what kinds of products its customers would like.

"These observations, coupled with other market research findings, are used to shape all communication with customers, which focuses on providing clear messages about value," Valentine explains. "In-store messages to drive impulse buys are especially strong."

Investments in managing and mining customer data can pay off in the future, as companies are able to draft better marketing strategies and create products that satisfy customer demands.

Transparency is also essential

Another key aspect of customer service is being open and honest with your clients. As Mashable's Alex Fitzpatrick writes for the American Express OPEN Forum, a large number of companies are collecting data on their customers, but it's important to be transparent about exactly what data you're collecting and what your plans are for applying it to your business.

This also provides a chance for an organization to establish its reputation as one that will go to great lengths to protect its customers and their personal information. Ask your audience for feedback, Fitzpatrick advises, and understand how they feel about privacy and data collection. Data quality tools can be helpful for making sure that the information you do gather on your clients will be accurate and clean.

"There's no reason to halt your data collection," Fitzpatrick concludes. "Instead, be open to having an honest conversation about what you expect to get from your users. If you do, your audience will be more likely to stick around for the long haul."