An essential part of starting a business revolves around understanding your target market. Aspiring entrepreneurs need to conduct in-depth market research to determine the defining characteristics of their potential customers. This includes the likes of customer pain points, their needs, as well as their preferences. 

However, customer data also involves critical customer features such as shopping habits, purchasing behavior, and other indicative characteristics that can better describe who your customers are. To give you a better idea, here’s a quick overview of the types of customer data and how it can help improve and grow your online business.


What Is Customer Data?

Before we jump into the different ways ecommerce businesses can utilize customer data, let us first define what customer data is.

Renowned ecommerce platform Shopify defines customer data as the collection of personal, behavioral, and demographic information that illustrates the qualities of their current customers. When web users conduct transactions online, they often provide online businesses with details that can be valuable for entrepreneurs.

Customer data is generally grouped into four main categories: personal, behavioral, engagement, and customer feedback.


Personal Customer Data

Personal data refers to information that is usually provided when making an online purchase. It is further classified into two types – PII and non-PII customer data. 

Personal identifiable information (PII) refers to a particular individual, such as their first and last names, ages, birthdays, email addresses, credit card numbers, as well as home addresses. On the other hand, non-PII includes the likes of device type, device ID, user’s general geographic location, and so on. 


Engagement or Interaction Customer Data

Engagement data is the type of customer data that shows how customers interact with your brand or ecommerce website. It takes into account a customer’s position in the buyer’s journey and identifies the different ways website visitors engage with your business.

This type of customer data is typically used to understand the market’s purchasing habits. It also helps identify sales opportunities and effective marketing tactics depending on the level and quality of customer engagement

Some of the forms of interaction or engagement data include the total number of website visits, brand click-through and conversion rates, bounce rates, ad engagement, social media marketing engagement, email campaign engagement, and the like. 


Behavioral Customer Data

Behavioral data is quite similar to engagement data in the way that it shows and analyzes how customers interact with the business. However, behavioral data focuses more on defined actions and activities that will help identify a customer’s buying habits and other dependencies.

Customer information under the behavioral data category includes details on users’ purchase history, newsletter subscriptions, renewals, cancellations, the number of abandoned shopping carts, product order values, as well as ecommerce website heat maps on visitor mouse movements. 


Customer Feedback Data

Also referred to as attitudinal data, this type of customer data highlights the importance of customers’ first-hand opinions about the digital products, goods, or services you offer. It also looks into different aspects of your online business, such as the quality of customer service, the design of the website interface, and the customer’s overall buying experience.

Unlike other customer data types with exact figures, customer feedback data is up to the business owner to analyze and interpret. This includes the likes of survey responses, customer suggestions, product or service reviews, and more.

Considering that the customer feedback data are more qualitative in nature, business owners need to pay closer attention in order to understand better what their customers are trying to say, 


Why Is Customer Data Important?

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Knowing the definition of customer data is one thing. However, what is even more important is to understand its significance in running and building a successful online business.

Ecommerce is a highly competitive industry. There are millions of businesses online trying to do the same thing as you, vying for the attention of the limited number of customers who are interested in your industry or niche. Considering this, understanding and analyzing your customer data is one of the ways to set yourself apart and rise above the competition.

To give you a better idea, here are some of the reasons why customer data is so important in ecommerce.


Helps determine important and valuable customer segments

One of the biggest mistakes startups and small businesses make is selling their digital products, goods, or services to a too broad of a market. This practice is not as cost-efficient and effective in finding quality leads in order to drive sales.

Customer segmentation allows entrepreneurs to identify and group customers based on their importance and value for long-term business objectives and goals. Customer data can provide business owners with important insights into the specific customer groups that offer more value and direct their sales and marketing efforts toward them.

Under the same agenda, online businesses also have the opportunity to pay closer attention to customers who provide more value in terms of repeat sales, customer referrals, and the like. Once you’ve pinpointed your most important market segments, you can plan your marketing tactics and strategies around retaining and attracting more alike customers.


Develop more relevant products and services

A part of business success and growth is adapting and changing with the current market trends. If an online business fails to do so, it is extremely easy to significantly lag behind and lose relevance to its current customers or market group. 

Customer data provides businesses with an in-depth understanding of what their customers want or need. It may be something as simple as a new color variation to their best-selling product or a demand for a totally new service. Business owners can capitalize on this demand and provide their customers with exactly what they want or need. 


Improve customer service

Aside from your marketing tactics and strategies, another way to engage, encourage, and retain customers is to ensure that you provide quality customer service. When customers are satisfied with what you offer and are happy with how their buying experience went, they are more likely to come back, spend more, and become loyal clients.

Considering this, customer data is a powerful tool for adjusting your business processes and gearing them toward your customers’ preferences. Attitudinal data can hold a ton of valuable customer suggestions and feedback that can help you provide better and more accurate support services. It can help you address aspects of your business that customers consider lacking.


Provide personalized customer experiences

Generally, customers like it when they are provided with content that is relevant to what they are looking for. But for online shops to do this, they need access to customer data such as purchase history, previously viewed products, content viewed, and the like. 

Customer data allows ecommerce websites to adjust their sales and marketing efforts and tailor them to what a specific customer is looking for. Content and product suggestions related to one’s search history and online activity can make it easy for them to find what they are looking for and purchase them immediately.



Online retail is a highly competitive industry. In order to rise above the competition, entrepreneurs need to utilize whatever tools they can take advantage of. 

Aside from implementing a wide range of marketing tactics, such as email marketing and search engine optimization, one way to create an adequate business strategy is to look into the people you want to sell to and those who are buying from you.

Customer data can provide entrepreneurs with a deep and rich understanding of their active and most valuable buyers’ current demands, needs, and preferences. Then, they can use this information to start campaigns designed to cater to their customer’s interests.


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