How Customer Insights Drive Sales & Conversions
Whether you’re figuring out what to have for dinner or how to communicate with your customers, decisions usually require one essential thing: data. For example, what have you eaten recently and what are you craving? What marketing channels do your customers prefer and what message are you trying to convey?
Data like purchase history, behavioral insights, and more take out the guesswork and lead to smarter decisions. In turn, smarter decisions result in better brand experiences, stronger customer relationships, and more sales, engagement, and conversions. Brands that leverage data-driven marketing are six times more likely to be profitable than those that don’t, while optimizing strategies based on data can increase conversion rates by 160% or more.
How can ecommerce brands collect and leverage data to drive more sales and conversions across all their digital channels?
What is data-driven marketing?
Data-driven marketing is the process of using customer data to inform a brand’s marketing efforts. This can range from small decisions like creating a single social post to major decisions like developing a new line of products. It puts customers’ needs, expectations, and behaviors at the center of every strategy, creating a strong foundation for retention and loyalty. For example, creating social content based on what customers engage with the most or developing new products based on what customers are asking for. Stamped customers can even leverage user-generated content to enrich their marketing campaigns and further drive customer engagement. When customers feel seen and heard, they respond by engaging, converting, and building long-term relationships with their favorite brands.
Comparing the different types of customer data
There are four types of customer data, differentiated by their source and intention:
- Zero-party data is information that customers voluntarily and explicitly share with a brand. This includes survey responses, testimonials, and reviews. Zero-party data is the most relevant and accurate type of data since customers are directly telling brands who they are and what they want so they can get personalized experiences in return.
- First-party data is information that customers directly share when engaging with a brand’s products and services. This includes contact information, purchase history, and behavioral activity. First-party data helps brands build effective customer profiles and marketing campaigns by inferring what they’re interested in.
- Second-party data is information that brands purchase from another organization, usually a trusted partner. Brands share their first-party data with other companies so they can target each other’s customers. While easy to collect, second-party data isn’t as accurate or relevant as zero and first-party data.
- Third-party data is information that brands purchase from an unrelated organization, such as a data vendor or broker. It’s a compilation of other brands’ first-party data, conducted through random sampling and collected from multiple sources. As a result, third-party data is the riskiest and least relevant type of data.
📊 Learn more about the different types of data in our latest article on customer insights.
▶️ To learn more about zero-party data and best practices for implementation, watch our webinar with Jeremiah Prummer, CEO of KnoCommerce.
Benefits of data-driven marketing
To start, data helps brands identify potential gaps and opportunities. Customer data creates opportunities for brands to develop sustainable, agile marketing strategies that drive consistent revenue growth since they’re based on current customer preferences and behaviors. Having this information helps them make better, more well-informed decisions. Instead of relying on industry standards and best practices, their strategies are directly informed by their own insights. For example, brands can create advertising strategies based on which products aren’t selling well or create content based on which topics drive the most engagement.
Next, data gives brands insight into purchase intent and customer sentiment. First, they can conduct polls, send NPS surveys, and ask for reviews to get customer feedback. They might learn why customers purchased something or how they feel about the brand. Then, they can use this information to improve their products, content, and strategies. This leads to higher conversion rates and an engaged brand community.
Data is also the core of personalization efforts, giving customers a more one-to-one experience with their favorite brands. For example, brands can send product recommendations based on purchase history or specific email communications based on site activity. Personalized touchpoints recognize and reward customers for interacting with a brand, making them more likely to keep engaging and making purchases in return.
Lastly, data-driven marketing boosts revenue and customer lifetime value. Actionable insights strengthen decision-making processes, improve customer relationships, and boost engagement, conversion, and retention rates. As a result, brands drive more new business, generate more sales, and lead to more repeat purchases. According to McKinsey & Company, brands that leverage data-driven personalization efforts generate 40% more revenue than those that don’t.
Data-driven marketing strategies
How to collect data
Website and social activity: Brands can start collecting insights by looking at customers’ website and social media activity. Site analytics and heatmap tools tell brands information like which pages are most popular, what devices customers are using, which forms get the most conversions, and so on. Social networks and analytics tools help brands identify engagement and conversion patterns, such as what types of content generate the most comments or which links get the most clicks. All of these metrics can inform business decisions and guide marketing strategies.
They can also create a brand hashtag to track and curate user-generated content. For example, Stamped customer Purple created the #lifeonpurple hashtag to see how customers use and talk about their products. They also have the #purplepartner hashtag for partnerships, where they can see what influencers and their audiences have to say. Lastly, brands can create polls and other types of interactive content, then measure their performance to see what customers are most interested in engaging with.
Site pop-ups and lead forms: Brands can add pop-ups and lead generation forms to their website to capture information and nurture conversions. They should include an incentive like a discount code or free gift to give customers a reason to share their data. For example, Stamped customer Mantraband has a pop-up where customers receive a 15% discount on their first order and a birthday gift in exchange for their email address and birthday month.
Stamped customers can also use pop-ups to drive loyalty program engagement and collect data with the help of our loyalty launcher. In just a few clicks, customers can sign up or sign in, manage their points, rewards, and referrals, and more. This creates a seamless shopping experience for site visitors.
Lastly, brands can also add forms to their menu bar, footer, and blog. They’re less likely to interrupt visitors’ browsing experiences and help brands identify customers who have a more active role in engaging with them. For example, Stamped customer Momofuku’s site footer features a newsletter registration form where visitors get a free e-recipe book in exchange for their email address. These small, but meaningful incentives help brands collect data and create a positive first impression at the beginning of the brand-customer relationship.
Account registrations and preference centers: Brands can collect a wealth of data once customers create an account. During the registration process, they can start off simple by asking for customers’ names and email addresses. Once customers have registered, brands can use preference centers to ask them what data they’re comfortable sharing. For example, Stamped customer Velasca’s privacy preference center helps site visitors enable or disable optional tracking cookies. This increases trust and makes customers feel more comfortable about engaging with the brand.
Brands can also use preference centers to ask customers what types of communication they want to receive, such as email blasts about upcoming sales or SMS messages about restocked products. This helps brands segment users by their interests and create more personalized experiences and calls-to-action, increasing the chance of conversion. Preference centers also reduce unsubscribe and churn rates, as customers will only see content they explicitly expressed their interest in.
Reviews and ratings: Once customers receive an order, brands should ask them to rate and review their purchases. This feedback gives brands insight into why customers purchased something, if it met their expectations, and whether they would recommend it to their friends. Brands can also ask customers to review their experience with the brand itself to see what they think about things like their shipping and customer service.
With Stamped Reviews, brands can create custom forms to ask customers product-specific questions. For example, apparel brands like Stamped customer Wolf & Shepherd can ask customers to rate the product’s sizing, fit, and comfort level. They can also use the Checkout Reviews feature to ask customers why they purchased something immediately after they place their order. The topic filters feature helps site visitors filter reviews by common keywords like “taste” or “quality”. Lastly, brands can directly respond to reviews and use the Q&A feature to answer customers’ questions.
These features not only help brands collect specific feedback and measure customer sentiment, but it also helps them drive on-site and engagement channel conversion improvements. More than half of online shoppers read four or more reviews before making a purchase decision, 45% of customers are more likely to support brands that respond to negative feedback, and product pages with reviews drive 3.5 times more conversions than those without.
CSAT scores and NPS surveys: Brands can directly measure customer sentiment in the post-purchase stage by sending CSAT (customer satisfaction) and NPS (net promoter score) surveys. These surveys give brands a quantifiable snapshot of how happy customers are and how likely they are to recommend them to a friend. If brands see a high percentage of detractors, they should consider following up to get more context.
They can also gain context right from the start by asking customers to provide a reason for their score, resulting in clear and actionable feedback. For example, customers might comment on things like product quality, packaging durability, and shipping times. Brands who leverage these types of comments usually see significant increases in profitability - improved brand experiences can lower the cost of serving customers by 33%, while 84% of brands that adjust their strategies based on customer feedback report notable increases in revenue.
Polls and quizzes: Customers want personalized experiences with brands based on their needs, interests, and behaviors. Brands can use polls and quizzes to learn more about their customers and tailor their journeys. For example, a snack brand might run a poll asking customers what flavors they want to see next, then send a discount code to respondents once their choice is made available. Stamped customer Three Ships Beauty’s skin quiz asks customers about their skin type and skincare needs. At the end of the quiz, participants receive a personalized skincare routine and a 15% discount for their first order. These interactive initiatives demonstrate a brand’s interest in understanding its customers better and lead to stronger customer profiles and experiences, and in turn, more sales and conversions.
Loyalty and referral programs: Brands with loyalty programs drive significantly more sales and conversions due to increased average order values and customer lifetime value. They have a 60 to 70% chance of selling their products to an existing customer (compared to a 5 to 20% chance of selling to a new customer), while a 5% increase in retention can result in as much as a 95% increase in revenue. However, not all programs are created equal - brands need data to make their loyalty program effective and engaging for their customers.
When creating and managing a loyalty program, brands need to track a few key metrics to assess their performance. To start, they should compare loyalty-driven engagement to regular engagement and see how the program impacts their conversion rates. For example, they can compare average order value and basket size to see if the program motivates customers to spend more. Brands should also look at point breakage rates and reward redemption rates to see if customers are actively participating in the program. They might find that specific rewards aren’t being redeemed or that customers generally aren’t spending their points.
One way to collect data and drive immediate results in a loyalty program is to create a sign-up reward. When customers join the program and provide their information, such as their name and email address, they receive a reward in return, like a $10 discount code or 250 points.
💡 Check out this article to learn more about how to build, manage, and measure an effective loyalty program.
Similarly, brands should also compare their referral program conversion rates to their average conversion rates to measure the program’s impact. Referral programs are an acquisition tactic that uses simple rewards to incentivize organic/word-of-mouth sales, where customer acquisition costs (CAC) are lower than those of a traditional marketing lead. If customers aren’t referring their friends, brands should consider lack of awareness or disinterest in rewards as potential issues, then look for ways to fix them so they can continue to drive customer retention and acquisition.
They should also use referral program data to identify their top advocates and reward them in some way to build even stronger relationships. This could be a free gift, an exclusive sale, and so on. From there, advocates may feel more motivated to spread the word about the brand, leading to more new business.
Lastly, brands can collect sales data to identify their best products, then use these to create pre-sell pages for referrers to share with their friends. These pages can help drive sales and program registrations, continuously fueling the cycle of collecting and leveraging customer data.
📣 Learn more about the benefits and best practices of referral programs.
How to leverage data
Branding and communication: Brands can use data to improve their overall branding and communication strategies. This can include how they describe themselves and their products, what marketing channels they use to connect with customers, and what brand values to focus on and work towards. They should look at conversion and behavioral metrics, reviews, NPS scores, and survey responses to identify what they’re doing well and what can be improved.
For example, if they’re noticing low engagement on a specific social network, they should check to see if their customers are more active elsewhere. If customers are unsubscribing from their emails, they should find ways to personalize their campaigns and send more relevant content. If they typically talk about product quality but customers seem more impressed with their product’s versatility, they can incorporate that into the product’s description. Finally, if customers have suggestions for how to improve the shopping experience like a simpler checkout process or a referral program, brands should take their comments into consideration.
Product research and development: Brands should also use the same information sources to develop new products and improve existing ones. If they’re seeing constant complaints about a specific product or repeated requests for something new, they should leverage this information or even ask for clarification to create products that have a better chance of driving conversions.
For example, an apparel brand might see high demand for a specific type of jeans in its social media comments. A skincare brand may see complaints about a product’s fragrance in its reviews. They can respond to comments and reviews by asking for further details, such as what colors the jeans should come in or why the fragrance doesn’t work for them.
Brands can also use data to identify their most loyal customers, then request their help in testing new products before launch. They can send free samples and ask specific questions to improve the chances of success and mitigate negative feedback. For example, a leading candle brand with Stamped leverages zero-party data to identify potential product testers. They start by inviting customers who regularly write reviews to join their test group, then send them new products before their official release. This gives them the opportunity to quality test their products and collect early feedback and reviews, which they can showcase before the product launch.
📢 In case you missed it: Speaking of future product launches, we just announced Stamped Loyalty 2.0, a new set of tools to help you create amazing loyalty experiences for your customers. Check out our introductory post to learn more.
Loyalty program management: Brands need to regularly assess their program data to find potential gaps and opportunities. What should they be watching for in their loyalty program metrics?
- Enrolment versus non-enrolment: Are customers joining your loyalty program? Is there a difference between loyalty-driven engagement and overall engagement? Brands need to identify how their loyalty program affects their bottom line.
- Overall program activity: Are customers completing activities to earn rewards? If not, brands should experiment with different types of activities (e.g. surveys, newsletter registrations) to see what customers are interested in.
- Points breakage: Are customers not doing anything with their points? Brands should create reminder campaigns to tell customers how many points they have and what rewards they can redeem with them.
- Reward preferences and ROI: Are specific rewards driving notably high or low rates of engagement? Do customers redeem a specific type of reward, and then leave? Brands should find ways to continuously incentivize them to come back.
- VIP tier engagement: Are customers motivated to move up to a better program tier? How does the lifetime value of your customers compare between tiers? Brands need to look at tier-specific perks and rewards to increase AOV and LTV.
- Experiments: Are customers engaging with your program experiments? Are these experiments driving significant increases in sales and repeat purchases? This might mean completing more NPS surveys to earn rewards, participating in exclusive sales, and so on.
💡 Check out this article to learn more about how to solve potential loyalty program pitfalls.
Lastly, brands should refer to other data sources to find ways to improve their loyalty programs. For example, if customers seem motivated to register for their newsletter because they receive a free product guide, they can add both the newsletter registration and guide download as program activities. If one of their low-cost products sells especially well, they can include it as a free gift option. These initiatives improve both their engagement and conversion rates.
Email marketing and paid advertising: To start, brands should be looking at email and ad performance to determine what’s working and what needs to be improved. For example, identifying which subject lines or ad copy drives the most engagement. From there, they should continuously tweak their email and ad content to improve their chances of conversion.
Brands should also be looking at other data sources to see what can potentially drive more conversions. If a loyalty program reward has a high redemption rate, they can run an email campaign centered around this specific reward and encourage customers to spend their points. If site visitors regularly convert on a specific landing page, they can create an ad campaign to drive more traffic to that page and consequently, more conversions.
Lastly, products with a high volume of reviews can be used in pre-sell advertising campaigns, which can either promote a single product and/or push customers to book a product demo. Highlighting user-generated content like reviews in an ad or social post, then directing people to a specific pre-sell page, leverages both customer data and social proof to help optimize your ecommerce flow. This helps increase clickthrough rates, sales, and other types of conversions.
Content creation and optimization: Lastly, brands need to use data to create and optimize their marketing strategies. In addition to email and ad campaigns, this can include social posts, blog articles, brand events, and any other types of content used to drive conversions and connect with customers. Stamped customers in particular can leverage our Gatsby integration to track social engagement, reward customers for mentioning their brand on Instagram and TikTok, and drive more traffic to their website. Gatsby helps brands identify which types of social engagement result in the most sales and revenue.
For example, as mentioned previously, an apparel brand might get comments from customers wanting a new style of jeans. Once they produce and launch the new style, they can create a marketing campaign about it to demonstrate how they listen to their customers and the impact of customer feedback. They should also monitor customer responses to see how they react to both the product and the launch campaign, then use that data to inform their future product launch strategies.
Drive conversions and gain actionable insights with Stamped
Customer data needs to be a key component in every decision and every strategy that a brand makes. With the right insights, brands can successfully eliminate guesswork, strengthen customer relationships, and boost their engagement, conversion, and retention rates.
Stamped Reviews and Loyalty enables brands to capture valuable information about their customers, from product reviews to site ratings to program activity and more. They can then turn their data into actionable insights for increased profits and accelerated growth. Book a demo with one of our sales reps to learn how.