Lesson Title: Collecting Customer Information

One of the main benefits of gathering customer information is that it enables you to segment
customers into groups of a similar kind. Database analysis will help you select those segments
that are more likely to buy or buy additional products. It will also highlight those less likely to
buy, and enable you to quantify the potential from each segment.

You can then focus your main additional marketing efforts on those who will provide the
greatest return on the investment.

What information do you need?

Consumers

 Name and address – the obvious starting place. It is vital to have accurate complete
details here.
 Transactional information – this is what products they have bought from you, what they
enquired about and what you offered them in the past.
 How long have they been a customer? The longer you have had them, the more chance
you have of retaining their business.
 Property type –Property type can be a very useful indicator for lots of products. Its main
limitation is that it deals with properties rather than people and it relies on the premise
that people who live in the same types of house will have the same needs, wants and
buying characteristics. Property type indicators would be quite accurate in identifying
high and low value areas – they are less good at identifying the characteristics of
individual occupants. There are other property descriptors that may also be helpful, for
example do they have a garage, is the property detached, semi-detached or terraced and is
there a garden?
 Household composition – this is the number of adults, the number of children and their
relationships to each other. It is often important to know the ages of the various
occupants.

Lifestyle data

Psychographic or ‘lifestyle’ data, on the other hand, is about individuals. Its limitation is that not
all households are represented on the various lifestyle databases.

This information covers details of products preferred across a wide range of consumer areas from
holidays to toothpaste and cars to insurance. These databases also contain information on age,
income, occupation and so on.
Business-to-business information

The above classifications relate to consumers, but similar information is available for business-
to-business marketing using classifications such as the following.

 Business type (perhaps by industry code) – it is often productive to segment businesses

into industry types.
 Company size, including the number of employees and/or the size of the turnover.
Clearly, this could be a highly relevant factor for certain products and services. A car
fleet supplier would obviously want to segment a prospect file based on the number of
employees, or ideally on the number of employees with company cars.
 Age – in this case, the age of the business. Although it may not seem relevant, it is in fact
very important, as the following example demonstrates.

How to obtain the information

Information can be sourced:

1. internally, that is by asking your existing customers and prospects via the sales force or
by telephone or postal questionnaire if you do not yet have a database (if you have a
database, your information gathering will start here)
2. externally, that is from sources such as the register of electors, lifestyle databases, credit
reference houses and business information brokers (such as Dun & Bradstreet and
Experian), rented databases (mailing lists), advertisements and leaflet drops; data is also
available from industry studies and omnibus surveys
3. Through original marketing research – using a range of techniques that will be discussed
later in this chapter.

Collecting information from existing customers

Train employees to gather information at every opportunity

Every employee must understand the power of up-to-date information and be encouraged
(preferably), coerced, or if necessary forced to gather data at every opportunity. When a
customer telephones (almost regardless of the reason for the call), you should try to complete the
missing fields in your database. Most customers, when approached politely, are prepared to give
basic information about their circumstances, their properties, the number of cars they own and
similar details.

Specific questionnaires

Have you ever asked your customers, formally, what they think about your service? How many
do you think would respond to a printed questionnaire – 5%, 10%, 25% or more?
It may be surprising to learn that many companies receive more than 50% response to a customer
questionnaire. Of course, to achieve such high levels of response your survey must be ‘customer
focused’ – that is, asking questions which are seen to be relevant and giving good reasons why
you would like to have the information.

Many companies use additional ‘sweeteners’ to encourage people to respond and there is no
doubt that these can work. However, you may not wish to pay for hundreds of free gifts, nor to
provide a prize for a free draw.

Source: https://remarksoftware.com/wp-content/uploads/2015/07/FantastiCar-Survey.png

Using the Internet for information gathering

Online businesses have a real advantage in collecting customer information as the use of cookies
(a device which allows a site provider to recognize the browser’s machine), allows them to track
buyer progress through a Web site.
They can also use online surveys to measure many things, including customer satisfaction with
the site. For example, Dell has a pop-up rating scale, allowing customers to rate the page.

The use of e-mail surveys to gain information, rather like the fax a generation ago, is currently
achieving very high response rates, although this might fall as consumers become more
concerned with the effects of unsolicited e-mail communication (sometimes called ‘spam’).

The Internet is not a panacea for information gathering, but it does allow access to a vast range
of published data and to certain groups of customers particularly in business-to-business markets.
A key point in consumer markets is that the penetration of Internet in the home is still relatively
low at around 40% of households and this is skewed towards the middle-class affluent market. It
may be appropriate to use if this is your target market, but it is not suitable for all products.

Warnings about gathering information via research

Data protection

The Data Privacy Act (DPA), or Republic Act No. 10173 was passed by the Philippines
Congress in 2012 and finally implemented five years later in 2016. RA 10173 assures the “free
flow of information to promote innovation and growth”(Republic Act. No. 10173, Ch. 1, Sec. 2)
while protecting the users’ fundamental rights to privacy. (Sprout.ph, 2018)

Statistical reliability

If you are using research simply to add information to your database, most of the above
techniques can be used safely. However, if you want to use it to give you a clear picture of the
state of a market place with a view to making accurate forecasts of likely take-up for a new
product or offer, for example, you must enlist specialist help and be fully aware of the need to
assess sample sizes and statistical validity.

References:
https://sprout.ph/blog/data-privacy-act/
Thomas, B. &Housden, M. (2002). Direct Marketing in Practice. Retrieved from
http://gen.lib.rus.ec/book/index.php?md5=D25A20F138960E9E4D8094499318E40E pp. 56-70