Customer Data for Marketing, What are the Benefits and Challenges?

The use of customer data in marketing is clear and necessary for all to see. Customer data usage represents distinct research backed competitive advantages for marketers as the amount of data people generate, and companies collect, is at its highest level ever and ever-increasing. But this customer data represents a huge range of benefits and challenges, both of which I shall be discussing today.

The benefits of customer data in marketing are clear for all to see. 70% of companies that collect customer data across multiple channels make use of the ability to segment this data by various criteria. This collection and segmentation process of the data allows companies to not only improve engagement with their customers, but also create models for the buyer’s journey based upon this data. This results in a delivery of more relevant value at the top of the funnel as well.  

Customer data in marketing also helps for companies to align to customer interests. When done effectively, it can show that companies care for the customer and allows the companies to align their messaging to the needs and interests of their audience. “Customer engagement research shows that organizations using customer analytics average a 14.6% annual increase in positive mentions across social media channels – a general yet telling metric of how consumers publicly view brands.” (Aberdeen, 2014).

But using customer data in marketing can also represent many challenges. Compliance with GDPR is an ever-present concern when using customer data. GDPR compliance is rising and becoming a major issue for businesses to worry about. “When it comes to third-party data the levels of confidence drop dramatically. Just 43 per cent of respondents were “very” or “reasonably” confident when it came to compliance, which demonstrates the difficulty of gathering evidence that the right permissions are in place when data has come from other sources.”. (ITProPortal, 2018). Data quality is also fast becoming an issue when using customer data in marketing. Poor quality customer data, such as out of date information and incomplete data is a challenge that companies unfortunately face when dealing with customer data in marketing.

The importance of having data performing in all platforms of the companies both online and offline is also a key factor that needs to be considered, that Data is crucial to maximizing the understanding of the multiple ways of the customer journey as mentioned by (Dudharejia, 2018).

References:

Minkara, O. and Minkara (2020). Using Customer Data for Marketing: The Good, Bad & Ugly. [online] Aberdeen. Available at: https://www.aberdeen.com/cmo-essentials/good-bad-ugly-using-customer-data-for-marketing/

Conning, J. (2020). The four key challenges of customer data management. [online] ITProPortal. Available at: https://www.itproportal.com/features/the-five-key-challenges-of-customer-data-management/