Benefits and Challenges of Using Customer Data for Marketing.

Customer data is the trail of information users provide when they interact with organisations through online or offline. These data types can be categorised as personal, descriptive, quantitative or behavior, and qualitative data. Organisations can add value from customer data by collecting relevant data points from different channels.

Source: exponea.com/blog

Benefits:

SEGMENTATION AND PERSONALISATION

Based on the customers’ historical behaviour, marketers can get deeper insights regarding the preferences and attributes of the users and in turn use that data to personalise product recommendations and segment groups or people (SmartInsights, 2019).

UNIFIED CUSTOMER DATA AND TRANSPARENCY:

Customer Data Platform can help consolidate all data sources from various departments into one unified platform. This can make data accessible across all divisions and create transparency and help fill that gap and eventually, streamline marketing campaigns.

REMOVE PAIN POINTS OF CUSTOMERS:

Learning customers’ characteristics and their needs can help remove the pain points of users and modify marketing communication accordingly (Martechadvisor, 2019)

Challenges:

PRIVACY REGULATIONS:

While there are tons of benefits in collecting correct customer data, one of the biggest challenges for companies is data privacy regulations. Instead of acting as a vendor, businesses should rather become a partner (Mckinsey, 2016)

DATA SILOS:

Customer data is fragmented and can create data silos. Many businesses are yet to implement tools to avoid silos resulting in inefficiency and lack of transparency within the organisation. With customer data platform tools customer personalization can be scaled immensely.

Big data certainly is powerful but data-driven marketing is invaluable without any creativity, its just more numbers (SmartInsights, 2019). According to Heger (2019) “Marketers that understand customer intent and effectively implement the four D’s: customer data collection, decision-making, designing engagements and the delivery of experiences will gain an edge in the marketplace” (Exponea, 2019).

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References:

SmartInsights (2019) ‘How to reach the full potential of your Customer Data Platform with product data’. Available at: https://www.smartinsights.com/digital-marketing-platforms/big-data-digital-marketing-platforms/how-to-reach-the-full-potential-of-your-customer-data-platform-with-product-data/ (Accessed: 18 February 2020)

Martechadvisor (2019) ‘What Is Customer Data? Definition, Types, Collection, Validation and Analysis’. Available at:

https://www.martechadvisor.com/articles/data-management/customer-data-definition-types-collection-validation-analysis-martech101/ (Accessed: 19 February 2020)

Mckinsey (2016)’ How companies are using big data and analytics’. Available at:

https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/how-companies-are-using-big-data-and-analytics (Accessed: 18 February 2020)

SmartInsights (2019) ‘How to reach the full potential of your Customer Data Platform with product data’. Available at https://www.smartinsights.com/archive/digital-marketing-platforms/big-data-digital-marketing-platforms/ (Accessed: 18 February 2020)

Exponea (2019) ‘Your Data’s a Goldmine, Here’s Your Pickaxe’. Available at https://exponea.com/blog/importance-of-customer-data-collection/ (Accessed: 18 February 2020)