Data remains to be a hot topic that needs to be handled with care. Marketers of today have access to a wide range of data relating to their audiences, changing the customer experience. Read on to find out what makes consumer data important, where and how to get it, the insights to look for, and the role that privacy plays in all of it.
Why is Consumer Data Important?
Data allows you to personalize marketing messages to your audience. With more information, it is possible to improve market segmentation and present potential customers with information that is more aligned with their needs. By doing this, your business is able to build stronger relationships with your audience, which will ideally develop into brand loyalty.
Another reason for the importance of data is the fact that it allows for accurate predictions to be made. Accurate insights mean you can see exactly what is and isn’t working, and improve forecasting going forward. This, of course, is all geared towards improving the overall customer experience.
Consumer Data Insights
With privacy concerns rampant, there have been a number of changes introduced that affect the ways companies collect data from their audiences. You’ll be hard-pressed to find a website that doesn’t ask your permission to store cookies so it can better understand your preferences. This is changing, however, with the death of the cookie.
If you haven’t heard yet, Chrome will be phasing out third-party cookies this year. This will affect the way marketers use ad-tracking tools. Without this ability to track precise data, they will need to find other ways to generate this information and make use of alternative marketing strategies.
Remember, this only refers to third-party cookies - you can still track basic data using first-party cookies. Essentially, the focus of tracking users online will shift from an individual level to looking at larger groups (Google FLoC). This will enable people online to still see relevant ads, without compromising their personal privacy.
With shifts in how society views and values privacy, marketers will be required to build on the information they already have about their audience and find creative ways to reach them. There are other ways to track your consumers without using cookies, too, by utilizing the likes of CRM technology.
Data Consumer vs Data Producer
Data consumers are the marketers who use the information, while data producers are the consumers who share their information. All of this information is of no use if it is not managed well. It needs to be collected and stored responsibly for legal reasons to promote the safety of your audience, and then it needs to be analyzed so that insights can be drawn out from that data.
How to Collect Consumer Data
There are various ways that marketers can collect consumer data, namely:
- First-party data: Data collected directly from your audience from your website, social media platforms, customer feedback surveys, subscription services, and CRM system. It is highly reliable since it is collected first-hand and reveals information about your audience’s actions, behaviours, characteristics, and interests.
Would you like to learn more about first-party data? Read How to Use First-Party Data to Drive Business Growth.
Consumer Data for Sale
- Second-party data: First-party data that is collected and sold to a business.
- Third-party data: Third-party data is information collected by data providers who work with data at scale from various sources. This includes declared, inferred, and observed data. This data is then aggregated and sold to other businesses. There are data providers for various industries which allow marketers to purchase relevant data sets. The original sources remain anonymous and seek to provide overarching trends and insights at a macro level. Competitors will also have access to this data. This type of data provides you with unbiased information for marketing context and research.
As we mentioned with second-party data above, it is possible to buy consumer goods. However, this is often limited due to privacy laws and governing bodies to protect consumers who may be unaware of where their data will be shared. This can result in unwanted and unwarranted communication that confuses and deters a potential customer.
Consumer Data and Privacy
Privacy goes hand in hand with data. Why? Because consumer data is personal. People are divided on where they stand when it comes to how much privacy they want and how much personal information they want to share. The crux of this argument is that data is used to improve the customer experience, but at what cost does convenience come at? There is a fine line between utilizing insights in a healthy way versus manipulating your audience into making purchases.
Where do you stand on the extent of marketers using consumer data? We’d love to discuss some of the ways you ensure your business harnesses this information in a healthy way. You can also get in touch with us to discuss all things marketing - we offer a full range of digital marketing services to help your business resonate with your audience and level up in your industry.