With 12-24 million eCommerce websites on the internet, it’s pretty safe to say that shoppers have lots of choices.
And given that 66% of shoppers expect businesses to understand their needs and expectations, personalizing the shopping experience is the key to winning over customers and staying ahead of the competition.
To do that, you’ll need to collect data. A lot of it!
But here’s the thing: It’s quite tricky to get personalization right. If not done correctly, it can have devastating effects. In fact, U.S companies lost $756 billion within a single year due to poor personalization strategies.
That’s huge!
This boils down to two reasons: the lack of trust from consumers and businesses collecting the wrong information.
That said, let’s look at how you can improve eCommerce data collection.
1. Emphasize Data Security and Privacy
[Source: Pixabay]
First, let’s address the elephant in the room: privacy.
This is an essential part of e-commerce development. People won’t hand over their information if they don’t know whether your website is secure and what will happen once their data is in your hands.
Consequently, you won’t have anything to work with in the first place.
You are responsible for complying with data privacy laws and obtaining consent from your customers before collecting and using their information.
The first step in making customers feel secure is to create a clear privacy policy explaining how you collect information, how and why you will use it, the type of data you gather, who you will share the information with, etc.
Also, be transparent about it. Make your privacy policy visible by placing it in the footer of your website, for example. Although visitors may not read it, knowing that it’s there will give consumers greater peace of mind.
Second, complying with the General Data Protection Regulation (GDPR) is a must if you do business in the European Union. Otherwise, you might deal with fines of up to 4% of your annual income.
The GDPR empowers citizens over how their information is used and protects them against data mishandling.
To be GDPR compliant, you’ll need to require customers to accept cookies after landing on your website, ask visitors to accept your Privacy Policy when they provide personal information and enable visitors to review or delete saved information.
Various tools are available that will help you ensure whether your website is GDPR compliant.
Lastly, there’s the SSL certificate. This security protocol encrypts the data exchange between you and your visitors, protecting it against potential cyberattacks.
Without it, the “Not Secure” label will appear next to your website’s URL, letting visitors know that your site is not protected and ultimately driving users away.
2. Identify the Data You’re Looking For
You need to balance the amount of data you plan to collect.
On the one hand, focusing strictly on gathering a specific data type, like demographic information, might seem like enough at first glance. But it won’t give you the bigger picture.
[Source: Pixabay]
In that case, you should also look at psychographic information, like your customers’ personality traits, routines, passions, and outlook on specific topics.
This will give you an insight into how your customers’ age, nationality, or occupation connect with what makes them tick, how they’re thinking, and how they live out their lives.
Consequently, you’ll be able to create a more accurate personalization strategy.
On the other hand, gathering too much data can lead to confusion, wasting resources, and even appearing suspicious in the eyes of your audience.
In other words, you’ve got to find a sweet spot.
That said, you need to determine what you need to accomplish from your data. For instance, you may want to provide more relevant content to your audience, increase brand awareness or improve conversion rates.
This is an essential step of the process, as it helps you understand what type of data you need to collect and what metrics you should track right off the bat.
Thus, you’ll minimize the risk of having to switch up your strategy further down the road, saving you time and money.
3. Pinpoint Your Data Sources
The next step is to identify the places where you’ll collect information.
Each data source can provide information for specific purposes. That said, knowing where to look is crucial for understanding what actions you need to take to accomplish your goals.
There are four types of data sources: zero-party, first-party, second-party, and fourth-party data.
Zero-party data is information that customers intentionally and proactively share with you. This can come in the form of surveys, quizzes, social media polls, and even user-generated content or brand mentions on social media.
In other words, zero-party data can be a great resource if you want to understand how your audience perceives your brand and learn more about each customers’ purchase preferences.
First-party data is information that is collected directly from your audience with its consent, but consumers do not necessarily share the information proactively.
You can collect first-party data through app or website analytics, for example. That said, this type of resource can come in handy if you want to study how users interact with your website, what pages attract the most attention, and so on.
Think of second-party data as someone else’s first-party information. In other words, an organization collects information directly from its audience and sells it to another company.
Although you can use second-party data to study your target audience, it also comes in handy if you’re planning to reach new audiences or get an insight into your competitors’ customer experiences.
Third-party data is bought from organizations that strictly specialize in collecting information.
These organizations pay multiple data owners for their first-party data, compile all the information as one large data set, then sell it as third-party data.
That said, third-party data can help get a broader insight into your own first-party data, discover new audiences, and study your competition.
To summarize, zero and first-party data are useful for understanding how your target audience interacts with your brand and website.
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Whereas second and third-party data can also help you gauge how your competitors are doing and your industry as a whole.
4. Acquire the Right Tools
After you’ve figured all that out, it’s time to get down to business. The first step is acquiring software. There’s a wide variety of tools on the internet, some of the best analytics companies will offer you really powerful data analysis tools, so you’ll need to pick the ones that fit your interests the best.
As a general idea, consider the following software categories: social listening, customer survey, and behavioral analytics.
Social listening tools allow you to track the internet for mentions or content related to your brand, industry, and competitors.
That said, you’ll get an insight into what your target audience thinks about your brand, what content topics are trending within your niche, and what your competitors are up to.
Customer survey software helps you create quick, customizable surveys, questionnaires, or feedback forms on various channels. These tools come in handy if you want to collect data directly from your customers by asking for their feedback, preferences, etc.
Behavioral analytics tools reveal anything you need to know about your website visitors. From where users come from, what web pages they visit the most, how much time they spend on your website, etc.
There are also plenty of heat tracking tools that will showcase for far users scroll down a web page and what parts of a specific web page attract the most attention.
In other words, understanding the users’ browsing experience will give you the necessary information to optimize your website’s design and ultimately improve conversion rates.
Lastly, you’ll need software to centralize and manage all this data. That said, investing in a CRM system might be worthwhile.
5. Make Data-Driven Decisions
Collecting data is one thing, but knowing what to do with it is something else. Sure, you might know what’s wrong and what you need to achieve, but your data doesn’t show precisely how you should do it.
That said, you should establish a standard operating procedure to achieve your goals. This document provides clear instructions on how you and your team should complete a task.
This will ensure that your team will always make the most out of their data and minimize the risk of errors.
Create a hypothesis based on the data you’ve gathered, test and make a specific change to see whether it’s successful. If so, integrate all the necessary adjustments to your customer experience, products, or services.
Use data-driven design
Your website is one of the most important assets for your business especially when it comes to interacting with your potential customers.
Data-driven design is a design method which uses the information available from different sources. It allows data to guide the design process. Good web design companies are aware of this, so you can visit this website in order to find more information and hire someone to help you out make the best decision for your business.
6. Test, Measure, Improve
Improving your data collection strategy is a continuous process, as it requires constant monitoring and testing.
That said, make sure to experiment with ways to identify the best courses of action based on what the data suggests, organize your information more effectively, and collect higher quantities of relevant data.
After that, determine whether these changes have been successful and repeat the process.
Final Words
All in all, data plays a crucial role in growing your business. It gives you a better understanding of your audience and reveals your strengths and weaknesses. If done right, that is.
First off, put security at the top of your list. Otherwise, you might not have any data to work with.
Second, identifying what type of data you need and where to collect it is essential for understanding where your company currently stands and what needs to be achieved.
Lastly, make sure to have standardized procedures and continuously experiment with your data collection strategy to reach optimal performance.
