Businesses across the world are looking at future prospects of customer data to harness consumer preferences to boost sales. This will not only help individual businesses but large and small corporate houses as well.
This trend seems to be catching on fast! This is a positive move toward helping burgeoning economies in third-world nations boost their overall economic progress.
Let’s analyze how customer data management (CDM) will affect people from a business perspective and how being armed with the right laws, rules and regulations we can ensure overall growth, prosperity and harmony for both business owners and consumers.
How do businesses collect data?
The “Customer is King” and “customer satisfaction”, are mottos often used by large and small organizations. They collect, analyze, organize, report and share their data within business units and perhaps even with other organizations. This data is systematically maintained by accessible and cost-effective software, often stored in on-premise systems and “in the cloud”.
For big or small retail businesses to thrive, customer satisfaction must be their prime modus operandi. In order for this to occur, customer data must be obtained, reviewed, refined and verified or validated by the organization.
To understand the mental and psychological behaviours of the customer, and how they choose, buy and spend on goods and services of their choice the data under study has to be considered relative to where it comes from.
Enterprises have many mechanisms by which they collect data from customers. The varied sources may include the customer’s IP address and even device IDs.
Another way of harvesting data is through day-to-day engagements with customers and prospects on business websites and social media websites such as Facebook, LinkedIn, Instagram and many more.
The third type of data collection is through the movement of the ‘mouse’ or cursor on the computer screen. E-commerce sites such as Amazon, Flipkart, Myntra and much more use this method to gather insights. This may throw light on purchase histories and preferences.
Lastly, behavioural data such as actual purchases may be gathered and aggregated and sorted, to give valuable insight and information on consumer metrics such as retail purchasing and product satisfaction.
Effective use of customer data to boost monetization
Companies that capitalize on the data that they have can also profit from it. Data brokers harvest bulk data of consumers from e-commerce companies.
Data brokers then use that customer data to process the most important information required by banks, financial institutions and insurance companies to verify customer background and credit history. This helps them to sanction loans more easily.
This channel presents itself as data management companies, that generate their own cash flow from reselling the aggregated insights that they have regarding customer activity.
Advertising and marketing companies may use customer data to improve website functionality by creating customized promotions and special offers on products and services uniquely designed for individuals.
Such companies capitalize on their marketing competencies and behavioural intelligence derived from years of experience in handling and understanding customer behaviour, sentiments, needs and trends.
Staying compliant
According to Max Freedman, Contributing Writer at the Business News Daily, “So much consumer data has been captured and analyzed that governments are crafting strict data and consumer privacy regulations designed to give individuals a modicum of control over how their data is used.“
The European Union’s General Data Protection Requirements (GDPR) lays out the rules of data capture, storage, usage, and sharing for companies, and GDPR regulation and compliance doesn’t just matter for European countries – it’s a law applicable to any business that targets or collects the personal data of EU citizens. Companies that ignore GDPR compliance and fail to abide by their legal obligation to uphold consumer privacy may face fines of up to 20 million euros or up to 4% of annual revenue, whichever is higher. Business News Daily
Data privacy has made it to the U.S. in the form of the California Consumer Privacy Act (CCPA). The CCPA is, in some ways, similar to Europe’s GDPR but differs in that it requires consumers to opt out of data collection rather than putting the onus on service providers to make sure that consumers “opt-in” or give their consent to data collection and use.
Privacy Acts in the US also require the individual states to develop applicable data law rather than a company’s internal decision-maker.
Doubtless, data collection by businesses is here to stay. However, as more and more consumers demand their privacy rights be protected, businesses will need to accept that will need to adopt new regulations and laws to clear the miasma surrounding their customer data management.
Customer Data Management (CDM) is a potentially powerful tool for businesses. It can be an added advantage to monetize customer data and protect customer accounts.
This valuable information and all the associated privacy considerations need to be well thought out to avoid data mismanagement. Businesses will need to think through their data handling ethic, their business practices and data management policies while avoiding falling foul of any legal requirements.
As consumers, we should be able to look forward to a world where the ethical and legal use of our data ushers in a new era of positive progress and prosperity across the globe.
SR
Pretectum’s cloud-based Customer Master Data Management platform is designed with policy and regulatory compliance and suitable data governance and control in mind. Curated, accurate and appropriate customer master data support business in the best possible customer interactions. To find out more contact us.