How To Use Customer Data People

How to use customer data to grow your business: Insights from small business owners

6 min read
Jonathan Long

There is an abundance of customer information and tools available to business owners these days, and once you know how to use customer data to grow your business, the opportunity to scale can be endless. But, before you can grow, you need to know you can leverage the customer data available to you.

I recently spoke with several small business owners across several different industries to learn how they use their customers' data to grow their businesses.

While natural growth is possible, it can really be amplified once you fully understand how to use the data available to you.

Here are six ways these business owners have used data, insights and analytics in order to experience significant growth in terms of sales, revenue and customer acquisition.

Lower your overall customer acquisition cost

When you are able to lower the cost of acquiring a new customer, it not only increases their lifetime value, but it also allows you to scale up your acquisition efforts across the channels that are converting the highest for you.

Andrew Ruditser, co-founder of MAXBURST, explains how to use customer data to do so. If you are pushing paid traffic to several pieces of content on your website, you can dive into your Google Analytics data, paying attention to your event tracking.

“Setting up events in Google Analytics allows you to see where specific actions are taking place. For example, if you have a slide-in or pop-up offer present your website visitors with a special offer, you can see what pages are driving the highest conversion rate and which ones are failing,” says Andrew. “By eliminating the ones performing poorly and only pushing traffic to those pages that are converting nicely, you can drastically lower your acquisition cost per customer.”

Setting up event tracking in Google Analytics isn’t difficult at all. You can learn more about how to collect data with this article.

Scale your paid advertising campaigns

Paid digital advertising — whether Google AdWords, Facebook or another platform — allows business owners to measure their results and account for every penny spent. Traditional advertising, like television and print, doesn’t provide the luxury of being extremely measurable.

How To Use Customer Data Dollar

Anna Tran of Lexton Law Firm describes how to use customer data to drive advertising.

“When we run paid campaigns, we can quickly look at the data available to see what creatives are receiving the highest click-through rates and what ads are converting at the highest rates,” Anna says. “The quicker you can identify what works, the faster you can scale with a much lower risk factor.”

This is the correct approach, rather than just pumping advertising dollars into multiple channels and hoping it results in a positive ROI at the end.

Once you have optimized your campaigns to convert at a rate that makes it profitable, you should be able to scale as much as your budget allows and maintain the same, if not better, conversion rates.

Provide a better customer experience online

Data can tell you a lot about the customer experience your website provides, while pinpointing areas that can be improved fairly easily. Often times, subtle changes will keep your visitors on your website longer, which then increases the chance of them converting.

Want to know how to use customer data to improve your website content? Charles Walton, CEO of Kybotech, explains:

“It’s important to pay attention to your bounce rate and the average time spent on your pages. If your visitors are quickly leaving your website and not clicking over to additional pages, that’s a good indication that your content isn’t compelling.”

Average time spent on your pages is data you will want to analyze on a page-by-page basis, depending on what your conversion goal is on particular pages. Some pieces of content will serve as doorways to an offer, while some pages will feature one offer as a conversion goal. If you can increase visitors’ average time spent on your website, you will greatly improve your conversion rates.

Eliminate wasted marketing dollars

Your advertising data and website data allows you to easily stop wasting money on things that simply don’t work. It eliminates the guesswork from the equation. Wasted marketing dollars can then be allocated in areas that are proven to drive results.

Daniel Frayley of Endless Pools explains how to use customer data for marketing.

“Our customer data shows us what channel every customer came from and what ads or keywords brought them to us," Daniel says. “The more precise you can get, the better. Through data analysis and optimization, we are able to avoid keywords and targeting that attracts general pool information seekers and focus on buyer-intent keywords and targeting that generates product sales.”

Conversions and the revenue they generate need to be the main focus point of any business advertising online. With plenty of customer data available, the only reason a business will waste money on advertising channels that don’t work is because of laziness.

How To Use Customer Data Charts

Validate business decisions

Your customer data allows you to not only make business decisions based on facts and numbers, but also validates moves you have made. It’s next to impossible to make potentially damaging decisions when you have cold, hard data in front of you.

Rob Likoff, CEO of Vpak, demonstrates how to use customer data in the decision-making process:

“Your data allows you to check whether or not an idea will work, but also if it’s scalable or not. For example, you can see if traffic will convert from a particular source, while also seeing how much potential traffic is available from that source."

A very simple example is whether or not Facebook ads would be profitable and scalable for a particular business. Running a test campaign and analyzing the data will tell you not only if it has profit potential conversion-wise, but also if the traffic is there in terms of scalability.

Identify your ideal customer and audience

One of the most valuable components of customer data is how you can dive into it in order to clearly identify who your ideal customer is, and then reverse engineer that in order to identify the audience you need to focus your targeting on.

Gary Matthews of Gary Matthews Solicitors describes how to use customer data to target your customers:

“When you really dive deeply into your customer data you get a very clear picture of who your target audience needs to be, and then you can really tailor your advertising to meet their needs and wants. We have a very specific client, and our customer data helps us focus our effort and budget in the correct areas.”

How to use customer data to scale your business growth

As you can see, there are several ways to use customer data to grow your business. It’s important to understand that it can take some time to fully understand how to analyze data and then adjust to make significant improvements. Remember that small changes will often contribute to large improvements, so have patience.