Knowing which individuals are your customers is a crucial task for every company. It’s easy to do in business-to-business companies, but can be quite difficult for consumer-focused companies.
There are two parts to this problem – who is the customer, and what did they buy? While you can solve the first part of the problem without the second, that’s not recommended. You will have no way to calculate customer value, making future optimization decisions much more difficult.
So the best approach is to tackle both parts simultaneously. In retail, loyalty programs and credit cards were the traditional way to gather customer identities and connect them to individual transactions. This approach still works. The other major approach, data appends, now depends mostly on reverse appending phone numbers, which is much tougher due to rising cell phone penetration (which can rarely be appended). In certain circumstances, email can be used as the tracking mechanism outside of a loyalty program.
Companies can reduce the barriers to identification with newer technology (such as new point of sale systems) which can be expensive, or with great relationship programs and a great brand. The former increases the capture rate at the point of purchase, the latter increases a customer’s willingness to raise their hand and be tracked voluntarily.
The mix that makes the most sense for your business depends on your current capabilities, budget, and overall objectives.
If you have nothing today, I’d start with a relationship program with soft benefits, requiring an email address. If you have a high-throughput point of sale/interaction, think about using phone number as another identifier. Bar coded cards are the most accurate, but not all consumers are willing to carry them, so you will need a ubiquitous backup identifier, and phone number has the benefit of being reverse appendable (no, its not a word, but it should be). So at minimum, you could connect multiple purchases over time to a specific phone number, even if you can’t identify the individual.
Down the road, you will end up with more records than customers. At that point, bring in a professional data hygiene firm to help with merge purge.