Pros & Cons of Customer Data in Marketing
Customer data is the behavioural, demographic and personal information about customers collected by businesses to understand, communicate and engage with customers.
Right off the bat, you might think that having such close ties to consumer behaviour could only be a positive but as with most things, you have to be aware of the disadvantages too to make sure you're making the smartest choice for your business.
Let's dive into the pros and cons below to help you make the right decisions for your fitness business.
Pros
- Personalised experiences for customers. With customer data, you can offer a personalised marketing experience across channels and all buying stages. If running a website for your gym, you can recommend certain products or membership plans that are relevant to each customer, based on website cookies.
- Expand your reach. You can collect customer data through websites and apps which will allow you to send relevant offers by SMS, email and other channels. 91% of buyers are more likely to purchase from brands that remember their preferences. Send texts to current gym members reminding them of an upcoming free day pass for friends. Send a follow up to that client with additional 1:1 sessions in their basket, but they haven't bit the bullet yet.
- Lower advertising costs. Understanding your customers and their behaviours allows you to segment your market and target advertising. Advertise a new member discount to those you are sure do not have existing memberships - don't waste spend directing these types of ads to already loyal customers.
Cons
- Data must be monitored. If going to be used effectively, it's important that your customer data be monitored regularly to ensure it's accurate and up to date. Data must also be GDPR compliant. This can be costly, for both your pockets and your time
- Data can decay or be inaccurate. Customers could change their email addresses, switch careers or move to a different city. If this happens and you're not aware of it, your marketing dollars go to waste advertising a gym in their area, that's no longer in their area. Some customers may also provide false names or email address and you could be wasting resources emailing John Doe about your services.
Customer data is only useful to your and your organisation if it's accurate, up to date and is being used to aid relevant marketing campaigns for each customer. As long as you're using it for the right reasons and it's accurate, customer data can definitely set you apart from the rest when it comes to digital marketing!
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Rebecca McGrath.
You would think that having behavioural, demographic, and personal information about your customers would be invaluable information for any business to have, but as you mentioned it can have its cons too. GDPR is one of the main disadvantages of storing customer data. Data must be relevant and in date and if not, it can cause the business a hefty fine. In 2021 alone, GDPR fines totalled €1.1bn in Ireland. Storing customer data also has its benefits too. Interesting stat, that 91% of buyers are more likely to purchase from brands that remember their preferences. This is very true! Personalised emails and text messages about products or services you have been searching for previously can easily convert to sales. The business has done the hard work for you and all you have to do is hit the buy now button.
ReplyDeleteA good post, Rebecca, clear and to the point with the main pros and cons. You mentioned in your blog that 91% of users are more likely to buy from a brand that has remembered their preferences - that is a huge number and just the power that obtaining customer data has. I have experienced this myself when shopping online too, we all have. I have mentioned this in my own blog and also I see Dervla has backed it up in her own comments that GDPR is a major factor when it comes to retaining data - fines can be huge and at worst there could be further legal repercussions. So, something to consider during marketing efforts.
ReplyDeleteRebecca, that is a great list of Pros and Cons of using customer data in marketing. You have to be aware of the cons as we all pros so you can mitigate against the risks then. @Dervla and @OxanaM both mentioned that GDPR is such a huge risk to businesses, there is a changing sentiment among consumers as well about how much information is stored about them and how it is used. It is essential to work to maintain the trust of consumers and finding the balance, as you said over 90% of people buy from businesses that remember their preferences. This should using retaining information on customers is essential to profitability.
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ReplyDeleteSome great points Rebecca. Businesses really have to be conscious of the risks that come with customer data and also be responsible in how they use it. Consumers these days are way better informed on the rights and wrongs of data usage. Also, just on a pure communications basis, businesses shouldn't make assumptions about how their customers would prefer to be contacted. Businesses should reflect customers' specific preferences and allow them to opt in or out at ease.
ReplyDeleteThere's nothing I hate more than the 'unsubscribe' process being unnecessarily overcomplicated.
Pros and Cons lists are great at getting the information out, plain and simple! I enjoyed reading your article Rebecca and I agree with the above comments, GDPR makes collecting customer information tricky for businesses. The good news is it's not all bad as there are so many benefits to collecting customer information which you have so greatly highlighted. I think for the fitness industry it is particularly important to know your customers. From collecting customer data of gym goers you can identify the peak time of day for attendance and supply additional fitness classes to meet that demand. This is all possible through analysing data and interpreting it to meet your business goals
ReplyDeletegreat post
ReplyDeletegreat tips and some excellent takeaways and food for thought.
Caitriona