5 Benefits and 5 Challenges of Using Customer Data for Marketing
By Oxana
Martynova
Anyone who
is anyone in the world of marketing understands that successful campaigns are
built on knowing your target audience.
But, how
can this be achieved and how do you know your customer that likes gym clothing
from your customer that is only interested in supplements and protein? Well,
the easy answer is through collecting and analyzing customer data. Customer
data is information collected about existing or potential customers, which tells
us exactly what it is that your customers want.
We can learn
this through a series of tools – one of which I have spoken about earlier –
Google Analytics, an easy tool to utilise in your digital marketing efforts. Before
you dive head first into using all the data collected, you should consider the
benefits of using customer data for marketing and also challenges that can
bring.
Lets jump
right into it – what are the benefits:
1. 1. You get a deeper understanding of your customers
and can constantly tailor your content to reach the right people.
2. 2. You can collect information from anybody who has
interacted with your company’s website, the main one here is email addresses
and/or phone numbers. Normally this information is then used to contact people
with enticing deals to attract a sale.
3. 3. Collecting customer data helps companies learn what
the demand is out there and how products and/or content would need to be
personalised and developed to get conversions.
4. 4. From this, you can learn the location of your
customers – which is very important piece of information, especially if your
business has a physical presence. There is no point in driving marketing
efforts to people in the wrong location.
5. 5. Companies can learn what works for them and improve
on what doesn’t work.
When it comes to challenges, we have a few of these
too:
1. 1. This can become costly to companies as you need
to invest time and money into these efforts.
2. 2. The data collected may not be quality data.
3. 3. Too much data may be collected and storage of
this data could become an issue.
4. 4. GDPR concerns can become an issue. If ever data
breaches occur, this could escalate to a legal and/or reputational problem.
5. 5. A company may have problems understanding and dissecting
the data collected due to the sheer volume of what is collected, although
granted this may be more of a problem for large scale companies than your typical
family business.
So, much like lifting weights or doing your dreaded squats, when
it comes to utilising data to enhance your marketing arsenal, start small and
scale up, know your audience and understand what challenges you want to avoid
and what benefits you want to maximise. There is great potential, you just have
to work to get there.
Thank you Oxana for this a great list of benefits and challenges. There are so many benefits to collecting customer data and I completely agree it is all about what information you are collecting, what you are learning from it and putting those learnings in practice. If it is not helping you make decisions then learn from that and move on. I think this is tied to one of the challenges, in that it can be unclear what data to collect and businesses can often get bogged down in the detail and suffer from analysis paralysis. You really summed it up when you emphasised start small and scale up.
ReplyDeleteGreat read, Oxana. It's so important to have a deeper understanding of customers and to constantly tailor your content to reach the right people. Consumers now more than ever want relevant content and with consumer loyalty precarious at best with so much choice out there, marketing efforts really need to be on the nose. GDPR really is a huge challenge for businesses no matter what size, with such valuable and identifiable data being collected you're dead right pointing out the reputational backlash a business could face if there was a breach.
ReplyDeleteWhat a great post, Oxana. You've made the advantages and challenges of having access to customer data really clear! I also think you've made a great point in advising businesses to start small and scale up. Too much data can definitely cause costly and time consuming problems that would out-weight the advantages. Without a doubt, small businesses are eager to get the most they can out of this data, but it's important to remember that if not collected, processed or used properly customer data can become a big pain for businesses. They should take the time to understand how to use data efficiently and they'll be flying in no time!
ReplyDeleteGreat post Oxana, customer data can be beneficial to marketers and business owners but it definitely has its challenges which you have highlighted above. Customer data helps businesses get to know their customers and tailor their services to individual needs. It is the way forward for businesses!
ReplyDeleteOxana, great blog post! Knowing your customer’s preferences is a key benefit to making a business successful. If you don’t know your customer and understand their wants and needs, how are you supposed to sell to them? Good point about location targeting. Knowing where your customers are located is surely a benefit. This will allow small businesses to target their customers by location and for physical premises, this is especially important, you wouldn’t target viewers in Dublin if your premises is located in Cork, it just wouldn’t make any sense. Unfortunately, it comes with a number of negatives too but the benefits outweigh the negatives.
ReplyDeletegreat post
ReplyDeletegreat tips and some excellent takeaways and food for thought.
Caitriona