Benefits and challenges of using customer data in marketing. Author: Ksenija Karpezo
Companies spend a lot of money on marketing every year, a lot of data is collected from different sources, but not everyone attaches importance to the data that is really important and valuable and does not use it effectively to grow their business.
The main goal of client analytics is to form an accurate portrait of the client. Companies with a well-defined data strategy can achieve market goals much more efficiently and outperform competitors. Below we look at the benefits and challenges of using customer data in marketing.
There are a lot of benefits in using client data, and here are just a few of them:
- Helps develop and improve your product or service;
- Can look for gaps between interests and products, and if there are gaps, take timely steps to eliminate them;
- Can create new products or services;
- Allows to increase conversions;
- There is an opportunity to attract more audience, knowing their expectations;
- Helps to have and maintain good communication with customers;
- Helps companies provide better customer service;
- Also helps reduce risk and fraud.
Challenges:
- IT and legislation. In the modern world, the protection of personal data is becoming an increasingly important task. More and more attention is paid to this issue every year. So in 2018, the GDPR law came into force. Under this law, the collection of personal data becomes more manageable and transparent. Now every resident of the European Union can request information about the purpose of processing and the place of storage, even delete information. The GDPR now obliges companies not to collect more information than necessary, not to share with third parties and delete after use, and in case of information leakage, report within three days.
- Technical limits and ethics. The development of technology is ahead of the development of legislation, which encourages the introduction of new methods to regulate this sector. Ethical principles of working with data play an important role in these issues. Increasingly, emphasis is placed not only on legality, but also on ensuring the safety of storage, respect for human rights and freedoms. Readiness to protect user data is spoken by many industry leaders. For example, Salesforce CEO Mark Benioff noted that the precedent with the elections in 2016 greatly discredited the industry and showed that the industry needs more regulation and external control. Mark Zuckerberg also said this on the issue: 'there is no longer any certainty that the industry does not need regulation'.
- Marketing in the era of anonymity. It may seem that marketing tools are losing their effectiveness due to the introduction of restrictions. But as they say, one door closes, another opens. Marketers can shift their focus towards direct communication with the client: you can work with the data that the client left 'voluntarily' when registering on the site, when filling out questionnaires, when purchasing a product. You can motivate a client to cooperate by providing him with a promotional code or offering a loyalty card, and so on. In this way, we ensure respect for human rights and freedoms and maintain the effectiveness of marketing strategies.
Marketers who understand customer intent and apply the four processes (data collection, data-driven decision making, engagement management, and customer experience management) — have a significant commercial advantage. Gather customer data the right way, work with the data to find patterns, approach the customer, deliver the best customer experience, and you can grow your business faster and more efficiently than your competitors.
Author: Ksenija Karpezo
Hey Ksenija enjoyed reading your blog about the challenges and benefits of using customer data for marketing. You rightly pointed out lots of useful benefits of customer data for example as a source for new products and services, communication with the target audience, expanding and attracting more clients and with all these statistics improving the conversions and the bottom line. I specially liked your ideas on the challenges with regard to safety and use of the data in adherence to GDPR and other regulation. The best part is your final analysis that data collection should be transparent and the audience should have the power and understanding, surely that is the way forward when there is a balance. All in all, well done. Comment By - Sultan Nazir
ReplyDeleteKsenija, another lovely blog post from you. Marketing campaigns can be very costly especially when they are conducted for the very first time, cause it requires deep market research and analysing of the competitors. So it is a good idea to invest more money (at the beginning of the project), to benefit greatly later.
ReplyDeleteLiked the conclusion at the end of the post, cause yeah if managed properly customer data can be really beneficial for businesses in the travel and tourism industry like ours is. The business then can grow and get better recognition (brand awareness), build and/or increase customer trust and loyalty while raising customer satisfaction levels. Thanks. Ivan B.
Hi Ksenija, it is so true that people do not realise that the data they are handing over so willingly to big data companies is worth so much. The European Union realised that people did not so they brough in GDPR as you say, in order to try manage the volume of data that was being collected. I find it very interesting the legal side of this and it was great that you brought this up in your Blog. That the industry does require heavy regulation in order to be ethical. Ultimately long term you would expect that the consumer could make money off their data in a way rather then the company solely who stores the data. There is a great company called digi.me that tries to help users take back control of their data. Have a read of this article https://www.forbes.com/sites/lucysherriff/2019/03/29/this-app-enables-you-to-make-money-off-your-own-personal-data/ Really enjoyed your blog, Diane
ReplyDeleteHey Ksenija thanks for writing this post, I think it made very clear what the benefits are and it also highlighted a good set of challenges.I was particularly interested in the mention of GDPR, I remember how confusing the legislation was for my line of work in the offline and offline world and how it took a good 3-4 months to have an acceptable understanding of the new rules and adapt the procedures to the new directives. I understand the need for establishing limits and regulations on data collection and anoniminity but at the same time I believe that personalised ads do actually provide a better customer experience so it is actually difficult to understand where to draw the line.
ReplyDeleteBy Rory Dignam