Best Customer Tracking Methods for Your Small Business

What are the best customer tracking methods?

Various tech tools can help you track your customers. Consider the following popular customer tracking methods. 

Use email marketing software to track customer engagement.

Email marketing campaigns can produce a wealth of valuable customer data that can drive sales and marketing decisions. Fortunately, the best email marketing software makes it effortless to track crucial customer metrics like your email open rate, unsubscribe rate, click-through rate (CTR) and other essential campaign key performance indicators. After gathering this information, you can improve your email marketing campaigns and tailor and grow your email lists.

Heather Davis Lam, founder and CEO of Revenue Ops LLC, emphasized that A/B testing is vital for optimizing your email metrics. “You can A/B test messages until you’ve optimized your email metrics and easily remove or change messaging that is not resonating,” Lam advised.

Use social media analytics tools to track customer behavior. 

Social media has become the go-to destination for customers seeking information and purchasing insights. Understanding which businesses, influencers and trends your customers follow can provide valuable insights into their interests and preferences.

Popular social media analytics tools include the following:

• Hootsuite: Hootsuite is a social media management platform that helps marketers track audience engagement, demographics and content performance. It’s particularly useful if you operate multiple social media accounts across platforms.
• Sprout Social: This social media management tool provides detailed analytics and reports. It’s a great option if you need help measuring your digital marketing return on investment (ROI), follower engagement and social media marketing campaign effectiveness.
• Buffer Analytics: Buffer Analytics is a feature in the Buffer social media management tool. It provides detailed insights into your audience’s behavior and can help optimize your content strategy.
• Meta Business Suite: Meta Business Suite is a free tool for tracking audience demographics, engagement rates and click-throughs across your Facebook, Instagram and Messenger accounts.

Additionally, if you have an Instagram business account and utilize Facebook marketing strategies, these platforms have helpful built-in insight tools to help you determine where followers live, their ages and other demographic information. 

Track customers via built-in website metrics. 

Website metrics let you see what part of your website gets the most traffic and how consumers behave while on your site. You can use Google Analytics — a free analytics tool that helps analyze website and application performance — to gain valuable insights.

“[Website metrics] are effective because people rely on the internet if they are curious about something and want to learn more about a product or service,” explained Michelle Devani, founder of LoveDevani.

Parker Russell, founder of Black Ink Coffee and a United States Air Force veteran, tracks several website metrics to understand customer behavior better. “We track what web pages the customer is using most, what their journey from viewer to customer is and also the pain points,” Russell noted. “Pain points are very important to acknowledge and resolve.” Russell also suggested tracking how much money customers spend — and how they spend it.

Track customers with CRM software. 

The best CRM software makes customer tracking seamless, helping you track when a lead opens emails, when they click on email links, whether or not they’ve ever opened an email and much more.

“A CRM system will allow you to centralize the data you’re collecting and create a single source of truth that will enable you to have a 360-degree view of your customer,” Lam explained. “It will also allow your entire company to access the data necessary to help address customer pain points, build customer loyalty and create full-funnel reports and dashboards for the company leadership to make data-driven decisions.”

What’s the best process for tracking customers?

The best customer tracking process depends on your business’s needs and preferences. Consider the following methods. 

Use an email segmentation process to track customers. 

In this market segmentation process, you’ll organize your email subscriber list into categories that help you identify customer interests and their place in the sales funnel. You can then segment customers further based on demographics, shopping habits, purchase history and more.

Email marketing software typically allows you to segment your list by specific factors, such as demographics, engagement levels or purchase behavior. Third-party email marketing services may charge more based on the number of segmented lists, so choose wisely.

Use customer tags to track customers on your website. 

Customer tags are lines of code embedded in your website that track customers. They provide information like how long visitors stay on your site, what products they’ve viewed and added to their cart and items they’ve removed from their cart.

You can also add tags to specific customers — similar to adding a hashtag to a photo on social media. Tag customers based on interests or other demographics and habits. You’ll be able to see promotion results and gauge their effectiveness. You can even use your results to tailor an email retargeting campaign for inactive customers.

Coding these tags isn’t easy if you’re not a web developer. However, resources like Google Tag Manager can make it more straightforward — especially since you’ll want to add more than one tag to a customer.

Use pixels to track customers. 

Pixels are lines of specific code inserted into your website’s code. They work as tiny, invisible tracking elements embedded in your web pages, often as a 1×1 pixel image or JavaScript. Pixels help you track website visits, ad impressions, conversions and how consumers arrived at your business’s website.

Include tracking pixels on all landing pages, web pages and purchase confirmation pages to optimize paid advertising.

Use a mix of strategies and processes. 

You may want to consider a more comprehensive customer tracking process. For example, Samantha Moss, a writer and content strategist, recommends the following steps: 

1. Create your business’s customer journey based on customer personas.
2. Find the points at which consumers interact with your brand.
3. Create a visual map of your customers’ journeys.
4. Identify whether your customers are reaching their goals.
5. Review your customer journey map and make any needed changes.

Tyler Read, CEO of Personal Trainer Pioneer, offered the following more technical approach:

1. Decide on the system you’ll use for customer tracking, such as CRM software or email marketing software.
2. Implement your customer tracking system with clearly defined methods, procedures and goals.
3. Train all relevant team members on your system, methods, procedures and goals.
4. Begin tracking customer information and interactions.
5. Analyze the data tracked to see how you can better serve customers.
6. Use data analytics to improve processes, marketing, retargeting and products for all current and future customers.

No single approach works for every business. The key is to choose a process or combination of strategies that aligns with your specific goals and customer needs.

What customer information should you track?

Deciding what specific customer information to track can be overwhelming. However, some factors can yield better insights into your customers than others. Below are six metrics every business should track.

1. Track downloads and opt-ins to better understand customers. 

Jenna Soard, founder of YouCanLaunch.com, advises entrepreneurs to track downloads and opt-ins, including freebies downloaded from landing pages or websites.

“This helps gauge the interest of the lead to determine the target demographics or even psychographics of the lead,” Soard explained. “When an entrepreneur learns about the traffic or customers coming in, they can produce more content and products that these targets actually want.” 

2. Track purchase history to gauge what customers want.

Your sales data can offer valuable customer insights, helping you determine what products, services and promotions to include in your email marketing campaigns and other marketing efforts. This practice, often referred to as insight selling, involves using data-driven insights to recommend products or services that align with customers’ preferences.

“Knowing their purchasing history will enable the company to discover the things their customers spend money on,” explained Devani. “As a result, they can offer them products and services of the same kind that can attract them.”

3. Track customer contact information so you can reach them.

Maintain a list of customer contact information and ensure it’s up to date. Devani advises companies to use email newsletters or automated messages to keep subscribers informed about current promotions, which can create a sense of urgency for buyers.

4. Track your sales funnel to understand your sales process.

Moss emphasized that tracking your sales funnel is crucial to understanding the effectiveness of your sales process. 

“You must track how many consumers pass through each part of your funnel to identify which part of your process needs to be improved,” Moss explained. “This will help you create a better process that will convert more leads.” 

5. Track traffic channels to gauge your marketing ROI. 

Track where your customers are coming from so you can measure and improve your marketing ROI and gauge the effectiveness of various marketing endeavors. 

Jeff Walker, founder and CEO of Best VPN Canada, advises surveying customers, if possible, about how they found you and where they heard about you. Additionally, Soard noted that adding tracking pixels or urchin tracking module codes to your marketing efforts can pinpoint where your customers originate.

6. Track email metrics to check customer engagement.

Email analytics is a particularly rich source of tracking data. Email metrics track who opens your emails, who doesn’t, if they click on anything and, if so, what they click on. Email open rates and CTRs are huge factors in determining how well you engage your audience.

If your email marketing campaign is successful, you’ll see an open rate of 15 percent to 25 percent. Once your customers have opened your emails, you should see a CTR of 2.5 percent to 3 percent.

Why should you track your customers?

There are numerous reasons to track your customers, with the primary advantage being gaining the information necessary to better serve them. Consider the following reasons why tracking customers is essential:

• Tracking enables personalization: If you know customers’ spending habits, how often they visit your website, where they’re from and how old they are, you can tailor your business communications to their specific needs. For example, you can contact them if they abandoned their shopping cart and entice them to return with a discount. You can also look at past purchase history to send relevant upselling and cross-selling suggestions.
• Tracking helps you manage your inventory: When you know what customers want and don’t want, you can stock the right items. “The information you track about how your customers interact with your brand tells you what they want and when they want it,” Read explained. You can shift your buying to purchase in-demand items, reducing inventory carrying costs and preventing the need to dispose of excess inventory.
• Tracking helps you better meet customers’ needs: Read emphasized that tracking customer data reveals their preferred modes of communication, such as email, social media or phone. You’ll know how, when and how often to reach out to reduce annoyance and ensure your messages are welcome. Additionally, you’ll understand their payment method preferences and accommodate them on your e-commerce site. 
• Tracking helps you optimize your marketing efforts: In the past, marketers had to guess what types of media, headlines, copy and images worked to spread brand awareness, generate interest and drive sales. Now, they can track clicks from emails, ads, web pages and other marketing media to measure the time spent on specific pages. This information means they understand what interests their customers. For example, if you have a furniture store and see extensive activity on your loveseat product pages — and much less on your full-size sofa pages — you may conclude that customers have smaller homes and apartments and adjust your marketing.
• Tracking can help increase sales: When you understand what customers want, how to appeal to them and how they prefer to communicate, they’re more likely to buy from you and remain loyal to your brand.
• Tracking helps you monitor and maximize customer satisfaction: By understanding how customers interact with your brand — including how they found you, their purchase timelines and lifetime value — you can identify and address issues promptly. Resolving customer service problems early prevents damage to your relationships and reputation.
• Tracking can give you a competitive advantage: Understanding your customers and adapting to their needs enhances loyalty, improves customer retention and strengthens your market position. Satisfied customers reward you with repeat business, positive customer reviews and valuable recommendations.

Jennifer Dublino contributed to this article.