Data is everywhere and most businesses have more data than they are even aware of. In recent years the market for different types of data platforms has also exploded and existing platforms have started to try and provide recommendations about how to make better use of data within the platform. It can be easy to become obsessed with collecting data, but the importance comes into play once businesses can find meaningful and actionable insights from the data.
Consumers today are more aware of systems that track their usage, and they can block, delete, and ask for businesses to delete all data on file about them. By giving consumers choices in this matter, consumers are then able to evaluate and make choices about which businesses they give or withhold personal data from. If they do consent to the use of their personal data, consumers often expect something in return, such as: information, personalised experiences, or the ability to track orders. Failing to provide something in return may lead to the customer removing themselves from further interaction with a business such as blocking communications or wanting to completely delete their data from the business’s database.
Therefore, it is crucial to not just collect but also use the data to benefit both consumers and businesses. To understand this importance, we’ll look at four key benefits to using insights from customer data:
1. Improve relationships
The most important thing is to make customers feel valued and treat them as individuals. This can only be done if you understand their needs and preferences and use that information to connect with them. As with personal relationships, everyone appreciates talking to someone who listens and treats them as an individual. The insights that can be discovered from customer data give valuable information to do this, e.g., where they live, their age and gender, which products they like, their engagement with customer support, and many others. Using insights from these allows businesses to tailor messages at a group or an individual level to offer more personalised experiences.
2. Plan campaigns
While TV and other mass marketing efforts get a wide reach that is hard to replicate in other channels, they are based on an approach of using the same message to a mass audience. How to create an authentic online brand? discussed the importance of knowing your customers and that the only way to do that is to use the data you get from your customers.
It is also important to note that moving from mass marketing messaging to one-to-one messaging is hard. Therefore, it is worth creating a plan to start automating communications and moving from one-to-many to one-to-few and finally to one-to-one communication.
Using customer data helps to segment the database from having everyone in the same bucket to creating groups. This is an important step in communication campaign planning and allows for the shift from mass marketing to one-to-few communications. Having more campaigns enriches customer data further allowing for additional insights about behaviour which can then be used to move closer to one-to-one communication.
3. Maximise budgets
John Wanamaker famously said, "Half the money I spend on advertising is wasted; the trouble is, I don’t know which half”. It is impossible to maximise marketing spend without being able to track the performance of different campaigns. Analysing the data from targeted campaigns allows businesses to measure the effectiveness of their marketing spend with various important measures. These measures can be used to decide whether some campaigns should be changed, which channels deliver the best returns and which ones do not work.
4. Discover patterns
With the rise of AI, it is possible to find great insights from large sets of data that could otherwise go unnoticed. AI can power through and discover patterns that are not visible in small sample sizes, and this can all be done without the need to go through the data yourself. These patterns are almost like hidden clues from customers and once discovered they can be used effectively to help with the previous three points.
If customer data is not used it loses its importance so make sure you value the data that customers give and take the time to understand the meaning behind the data. Doing this helps you and your customers and can be the missing link in taking the business to the next level.