For many businesses, their customers are their stars and moon.
If you ever wish to seek validation for your offering, customers would be where you would look. To thrive, businesses need to continuously evolve, invent and involve. This is particularly true if they need to break through ceilings and give their brand a perspective aligned with what customers want.
Businesses continuously extract information from online platforms that they find useful for their research. Whether these are your searches on your favourite search engine or perhaps a picture you uploaded to the internet. Business insights are connected to the process of data extraction. Collected data is then passed on to companies for research that can help them identify stuff that they can sell to you.
According to a report published by Statista, 79% of companies collect personal data of customers resident in the US, followed by EU (77%), UK (61%), Asia (56%), and so on. If you are a Netflix subscriber, you will find an exponential use of your customer data on that platform.
Netflix uses algorithms to identify the shows or movies you might be interested in watching. This makes you stick to the platform for a longer time and enjoy seeing stuff you like. Youtube and Spotify do the same.
What is customer data?
Consumer data is typically collected in three distinctive ways. By asking direct questions, tracking buying behaviour from trackable events like account purchases, e-commerce, loyalty card tagged in-store purchases etc, or by buying personal data from data brokers businesses can dig deeper into understanding their customers and prospective audiences.
When you accept that not-so-tasty cookie from a website, you are giving them authority to store and track information. Whenever you are back on the site, if the cookie is to be leveraged for a more customized experience, the website will automatically tweak the interface to match past behaviour, distinctive traits of your past behaviour or serve up your paused shopping cart. It can be a great convenience.
If you’re asked what “Consumer data” is, you may find the answers are pretty vague. The term potentially has unlimited answers. All types of personal data that you can think of might be included under consumer data. You can think of the consumer data in terms of these four basic groupings though:
- Personal data- the information related to your login credentials, your master data, like name, date of birth, email address, physical address etc, your IP address, your device name, or other technical information.
- Behavioral data- this is that your buying behavior or repetitive actions that can potentially suggest your purchasing trends. Like buying vitamins every thirty days or toilet paper in bulk once a month, or using your credit card at a casino or gaming establishment or club.
- Engagement data- this will be your visits to social media sites or your use of social media applications, your email behaviours, your use of the helpdesk or chatbot or community site etc
- Attitudinal data-this helps businesses improve the way they present their identity and brand to you, how they interpret your consumer preferences and can be gathered through surveys, polls or usability tests.
How is customer data stored?
Data can be turned into information when we use the right approach and techniques in its evaluation and preparation for other uses. When businesses expand and add new clients, they require a system that maintains a certain degree of customer data quality.
Businesses handle all this through Customer Data Management approaches. These can ad hoc or formal. Integrating Customer Master Data Management (CMDM) gives businesses a more complete view of the customer and maintains and registers potentially all the touchpoints from the first customer interaction through to all the sales and service events.
An appropriate CMDM also checks for duplicates and creates a separate data set for customers, suppliers, products, or other business units for whichever purpose they have in mind. Having a structure for the customer master streamlines data-sharing and simplifies data exchanges between departments.
Why do businesses collect customer data?
Many decisions that a business may take, depend on consumer data. By leveraging that data, businesses are able to provide a personalized experience to increase customer engagement and loyalty through more business or change a potential lead to a loyal buyer.
Even if we talk statistically, 73% of people feel that customer experience is a thriving factor when buying a product. So when you give out your personal data, you’re potentially helping a business evaluate their performance against your needs and helping them make informed decisions.
“Data are just summaries of thousands of stories – tell a few of those stories to help make the data meaningful.”
When businesses take their time to go through numbers that reflect people’s buying behaviours, who those customers are, becomes clearer and more visible.
Chip & Dan Heath, Authors of Made to Stick, Switch, Decisive, The Power of Moments
Collecting and analysing consumer data not just helps but also empowers the user. Wearable devices are increasingly ubiquitous, we could get a rundown of the data collected by our phones and even more personal insights like those from a smartwatch. This data could be insights into where we have been, the calories we burned, the nutritional benefits of our food, our exercise regimen and our sleep patterns.
Consumers may try to run away from their data but its collection in various forms is inevitable. Consumers should be diligent about considering what data they share but many seem content with sharing as long as the end result is having businesses serve them better. The law will protect the consumer but the law doesn’t absolve businesses from acting responsibly or consumers from being cautious and paying attention to what data they share and who they share it with.
Data regulation laws
General Data Protection Requirement (GDPR) is a major law applicable to all the member countries registered as a part of the European Union. This law puts major compliance requirements in place around data collection, usage, and data sharing with third parties. Companies ignoring GDPR become the subject of scrutiny and can be fined significant amounts.
Data privacy laws exist to protect the general public outside of Europe too. The California Consumer Privacy Act (CCPA) in the US is one of these. Consumers rightly have the power to opt out of data collection wherever they feel like it. The act also offers guidelines that companies have to follow in case they are using consumer data.
We often relate consumer data with the aggregation and analysis of potentially huge numbers, this data is often presented in tables of numbers or charts, and just as these tables and charts try to simplify a story about the underlying data, at its most basic level the data may also just be quite simple. How we interpret the customer data at the individual record or aggregated level, and how we use that data to make decisions is ultimately where it matters.
In order to make proper tactical and strategic decisions, businesses do have to have the data though, and the data needs to be as recent and complete, and uncontaminated as possible. That means that any business using that data needs to have an appropriate data management strategy and the right tools to manage that data – particularly customer master data.
The Pretectum CMDM is a customer data master data management platform that helps businesses in the definition, collation, curation and validation of the best possible customer data so that they can ensure that their people and processes are making use of the right data every time.
Contact us for more information.
RJ