Benefits and Challenges of using Customer Data for marketing

Many companies spend a huge amount of money on marketing. Collecting customer data should the most important thing in marketing strategy because without data the marketers can’t reach target audience or persona effectively. Valuable customer data helps to improve nearly every aspect of the company’s business (Minkara, 2014).

But how exactly the companies can benefit from collecting consumer data?

1.    Data provides better customer segmentation

Collecting and segmenting data allows companies to better identify the overall demographics and reuse marketing strategies for customers who share similar interests, therefore deliver more value straight away (Forbes, 2013).

2.    Data improves marketing strategies

Collecting and analyzing data helps in much better understanding of the way the customers behave online and that helps to determine which of marketing campaigns are most preferable for the target audience, therefore the companies can increase efficiency by creating more targeted advertisements.

3.    Data allows for greater personalization

A McKinsey study found that data-driven personalization led to greater ROI on marketing spend (Forbes, 2013).

Collecting and understanding data allows to engage existing customers with more relevant personalized communications and suggestions and align company’s messaging to the needs and interests of their audience, and therefore improve the overall customer experience.

4.    Data simplifies marketing integration

Collecting and leveraging data makes it easier to extend the target audience across multiple channels of communication and gain a full view of customers across channels. 

What challenges marketers might face?

(Datanami, 2020)

There are numerous benefits for the companies from collecting customer data, but those comes with a set of challenging things – privacy concerns, data usage restrictions, maintenance and security demands (Truyo, no date).

Governments have launched strict data privacy regulations designed to give individuals a sense of control over how their data is used. GDPR in Europe and CCPA in California are examples of such regulatory laws. Moreover, marketers face several regulations in terms of Customer Data Security, for example, PCI DSS, HIPAA and others that vary across different industries and geographies and it becomes much more challenging for marketers in businesses operating across multiple industries and countries (Salam, no date).

References:

Truyo, (no date) “The Importance of Data: The Top Benefits of Collecting Customer Data”. Available at https://insights.truyo.com/consumer-data

(Accessed: 16 February 2020).

Forbes, (2013) “Big Data, Analytics And The Future Of Marketing And Sales”. Available at https://www.forbes.com/sites/mckinsey/2013/07/22/big-data-analytics-and-the-future-of-marketing-sales/#125cfbaa5587 (Accessed: 17 February 2020).

Omer Minkara, (2014) “The Good, the Bad, and the Ugly in Using Customer Data for Marketing”. Available at https://www.aberdeen.com/cmo-essentials/good-bad-ugly-using-customer-data-for-marketing/ (Accessed: 18 February 2020).

Rimsha Salam, (no date) “Collecting Customer Data – Dos and Don’ts!”. 

Available at https://blue.genetechz.com/pieregister_newsite/blog/collecting-customer-data-dos-and-donts/ (Accessed: 18 February 2020).

Aria Haghighi, (2020) “The Benefits of Building Predictive Analytics on Unified Customer Data”. Available at https://www.datanami.com/2020/02/05/the-benefits-of-building-predictive-analytics-on-unified-customer-data/ (Accessed: 18 February 2020).