What is customer information? Everything you need to know

Highlights

You’ll learn everything you need to know about customer information, including its types, uses and benefits for modern businesses.

• Definition: Customer information is data about customer behavior, preferences and transactions
• Types:
  • Demographic—age, location, income
  • Behavioral—engagement, search history
  • Transactional—purchases, payments
  • Attitudinal—feedback, opinions
• Use cases: Personalize marketing, tailor content and interactions, improve decisions

Deploy a CDP to make the most of customer data for personalized customer journeys and omnichannel experiences. 

Modern businesses track customer interactions to know what they buy, what interests them and what drives repeat business. When they use that data in the right way, they can offer higher quality products, set the right prices and focus on strategies that work.

However, data is not just a means to an end, as using it comes with responsibilities. If businesses do not handle it with care, things can quickly go south. For instance, a data breach could lead to lawsuits, loss of customer trust and even financial losses.

Hence, businesses must deploy ethical and efficient measures to collect customer data. But before it gets to that stage, businesses must be clear on what counts as customer information. We break it down.

What is customer information? 

Customer information is data about what customers do, like and buy. It comes from systems like CRM and CDP and other sources like support logs, transaction records and digital touchpoints. When a business understands its customers, it can make better decisions, tailor experiences and stay ahead of customer demands. 

When you connect real-time data to customer data platforms (CDP), CRM, ERP and analytics tools, it improves things like personalization, customer journey orchestration, etc.

Also, it streamlines business processes, which means less time-wasting for teams and optimal use of resources. However, different types of data serve unique business needs.

Types of customer information

To make smart decisions, businesses must understand the types of customer data they collect and how each one helps.

• Demographic data: This includes age, gender, income and location—key details that shape customer profiles.
• Behavioral data: This includes web and app visits, search history and other details of how a customer engages with a brand on different platforms.
• Transactional data: This includes purchases, subscriptions and payments, which helps you track revenue, spending and customer value.
• Attitudinal data: It includes feedback, reviews and opinions of customers towards a brand, product or service. It measures satisfaction and customer experience.

Understanding these data types is the first step. The next is to apply them well.

Importance of customer information in business

Why are businesses so focused on collecting customer data? That is because it helps them improve marketing strategies, make better decisions and build stronger customer relationships. It also helps them improve business processes for a better customer experience. Here are other reasons why it matters.

• Personalized marketing and services: With adequate customer data, a business can improve its targeting. It can also serve customers with tailored content. This improves engagement and increases sales.
• Customer retention and satisfaction: Customer insights enable businesses to predict demand, enabling them to deliver what customers want. 
• Better decisions and strategies: A business can become truly data-driven when it relies on customer insights. This enables them to make decisions that deliver optimum value to customers, thus driving business growth.

While there is no doubt about the benefits of customer information, merely collecting it is never enough. The real magic happens when you know what to do with the data.

How businesses use customer data to improve workflow

With proper customer information, businesses can predict trends, align IT and marketing and improve their planning. Several modern tools like CDPs, automation tools and AI solutions rely on customer information.

For instance, with real-time data from a customer data platform, businesses can segment their audiences, personalize interactions and deliver omnichannel consistency.

So, what is the takeaway? Businesses need the right technologies to benefit from customer information. Without that, they may end up with lots of bad calls and missed opportunities.

Benefits of customer data management tools

As stated, you need the right tools, and a customer information management system comes in handy. A proper system organizes your data, making it easy to track, analyze and apply. We talked about a customer data platform (CDP), which is one of the systems that does this so well.

• Data integration across departments: A customer data platform (CDP) unifies customer data. This removes silos and offers a single source of truth for first-party customer data. This simplifies decision-making across departments.
• Improved marketing efficiency: With automation tools, you can segment customers for precise targeting. You can also customize campaigns for better engagement and reduced costs.
• Strong customer satisfaction: A complete view of customer interactions helps resolve issues faster and predict customer needs. This enhances customer satisfaction, trust and loyalty.

How to get customer data

Customers share data when they trust a business. Clear communication about data use builds that trust. Transparency in forms and privacy policies encourages openness.

You must avoid intrusive methods and only use ethical data collection methods. This includes surveys and social media analysis, which rely on first-party sources. To collect customer data with integrity, follow these steps:

1. Define data needs: Identify the customer information that aligns with your business goals. Collect only necessary data to avoid compliance risks.
2. Use transparent consent methods: Use preference centers and active opt-ins. Customers must understand what they are sharing and why.
3. Use many data sources. Depending on your business goal, you may have to combine direct methods like surveys with indirect sources like web analytics. This creates a more comprehensive view of the customer.
4. Ensure accuracy and compliance. Update customer records to remove outdated data. Also, adhere to data security and privacy regulations, such as GDPR and CCPA.

Beyond customer information collection, you need to set up adequate security measures to ensure the data is safe. There are many ways to do that.

How to secure customer information

A data breach can ruin trust and cost you goodwill and financial losses. Here are some strategies to protect customer information:

1. Use encryption and multi-factor authentication (MFA): Encrypt data and use authentication to keep out unauthorized users. Also, implement role-based access controls for better security.
2. Follow privacy laws: Ensure you have adequate documentation on GDPR, CCPA and other regulations. Also, assign a member of the team to monitor compliance.
3. Conduct periodic audits: Regular security audits help find weak spots.
4. Train your team on the latest security measures: Sometimes, security breaches can happen because of employee errors. Hence, it helps to train your team on the latest security threats and how they can stay ahead of them.

Predictive analytics and customer data

Predictive analytics helps businesses see opportunities and plan for future outcomes based on their current and historical data. It is a powerful way to use customer information, as follows:

• Analyze future demand trends: Use AI solutions to analyze historical data to predict future behavior. This way, businesses can offer products, services and features that customers need before they ask.
• Enhance repeat business: Consumers usually prefer brands that ‘get’ them. If you understand what they need, you can show up just in time with the right offer—say, an add-on or complementary product. This drives repeat business.
• Make choices that work: What if you can eliminate guesswork from the decision-making process? You save time and money. This is what happens when you combine customer information with predictive analytics.

FAQ section

What is the meaning of customer information?

Customer information is all the data a business collects about its customers, such as personal details, purchase history and preferences.

What is basic customer information?

Basic customer information refers to basic details about a customer that identify them as unique individuals, such as name, email address, phone number, etc.

How can businesses collect customer data?

Businesses can collect data directly from customers via surveys, interviews and feedback forms or indirectly using tools such as CDP and customer relationship management (CRM) systems, website analytics and social media.

What are the best practices for securing customer information?

Encrypt data, authenticate users and deploy role-based access control to ensure that only authorized and validated users can access data. Deploy a zero-trust security model and conduct regular audits and staff training to ensure you are up-to-date with security measures.

Learn more

Customer information gives you insight that supports far-reaching business decision-making. It shows what consumers want, how they act and why they stay loyal to a brand. Innovative businesses use customer data to improve products, simplify processes and stay ahead of industry trends.

However, businesses must be responsible in the way they collect and use data. This ensures customers feel safe, which enhances trust. Be clear about what you need data for, obtain informed content, set up robust security systems and deploy the right tools to manage the data. 

Contentstack’s real-time CDP enables you to activate first-party customer data for analytics, customer journey operations, real-time personalization and so much more. Talk to us today to get started.