An estimate released by IBM revealed that we collect nearly 2.5 quintillion bytes of data every day, and this number is only going up, with customers leaving more and more digital footprints across the world.
When we talk about customer data or consumer data collection, most of us imagine that it’s a modern phenomenon that was born in the age of the internet.
But as marketing gurus know, customer data collection has been around ever since the birth of commerce. We’re talking about centuries here!
So what suddenly makes data so important and valuable, what makes it the focus of marketing efforts and how is this field poised to evolve in the next few years?
Before we look for answers to these questions, let’s turn back the clock a little and grab a quick screen-shot of the history of data collection.
Data Collection Down the Ages
Archaeologists and social scientists have identified early data collection processes. These are the tally marks or tick marks made by ancient traders to document sales and transactions. Inventories of grain and food stocks were also kept in this way.
The Chinese invented the abacus to help them make calculations more quickly and efficiently. Other types of data that were collected included astrological information and time-keeping.
During the 1800s in the Western world, census taking demanded greater fine tuning of data. This was one of the biggest data collection exercises that the world had seen, and data was being gathered from multiple points. The data needed to be compiled, sorted and analyzed before the next census exercise, otherwise it would be a pointless effort.
The Hollerith Tabulating Machine was invented at this time to help data-gatherers and analysts to quickly tabulate and analyze the data. It also enabled arriving at insights and conclusions, and aided in the application of statistics to the data.
Herman Hollerith, the inventor, was also the founder of IBM.
With the invention of computers, data storage came into prominence. Data was stored in paper tapes, then in floppy disks, and then into smaller and smaller products, hard disk drives, solid state drives, USB flash drives, SD cards, external hard drives and more.
Today, industry watchers know that the future of data is already upon us. This is the age of AI, cognitive and smart technologies. Humongous volumes of data are being collected, but analyzing them and leveraging the power of this data is the next challenge that confronts us.
Customer data needs to be stored, analyzed and interpreted, using quicker and more efficient methods. Big Data and Survey Data need to come together seamlessly to provide more accurate and actionable intelligence for marketers.
What Is Customer Data?
Customer data is:
- personal, behavioral, demographic information
- collected by marketing departments and organizations
- compiled from various sources including marketing efforts, direct marketing, mail, social media, website interaction, surveys, mobile apps, campaigns and other offline-online resources
- information available from the customer base
- processed into analytics
- used to gain insights into purchasing decisions, customer journey, preferences
- categorized into behavioral, identity, descriptive and qualitative, engagement, attitudinal, types
- regulated by the rules of different countries and companies are legally bound to comply. The rules are subject to changes, as technology and methods evolve.
Why Invest In Customer Data Collection?
The aim of commerce is ultimately to make profits. Profitability and revenues depend on the often fickle and unpredictable behavior, fads, trends and fashions that customers follow. No matter how good the product, how efficient and affordable the service, unless it syncs with the customer and aligns with their needs, preferences and budget, it could flop and sink out of sight.
Customer loyalty is a precious commodity and this is the goal of all data collection and analytics.
1. In-depth understanding: More than 70% of customers report frustration at being given irrelevant marketing messages. Customer data offers more intensive and extensive information about the market. Data allows you to get to know the customer and thereby cater to them more accurately. It helps you to provide them with more relevant, timely messaging. This in turn allows the customer to select your brand more consistently and derive value from the transaction.
2. Direct communication: When you have the right data about a market segment, it allows you to communicate directly with individual customers. Brands that offer personalized services reduce acquisition costs by more than 50%, boost marketing spend efficiency by 15-30% and revenues by more than 10%. Customers are more willing to purchase from brands that offer bespoke content.
3. Influences Behavior: Brands that use customer data effectively have found that 90% of customers are OK with sharing personal data if they can get a personalized experience. If millennials can get a better customer experience, they don’t mind their behavioral and other data being tracked on websites. Customers also respond positively to brands that make an effort to understand them and get to know them. They are also willing to pay more for such brands, more ready to offer genuine feedback and try out new products and services.
4. Better Service: Customer databases are fundamental to knowing your typical customer. This means you can offer them the information they need and can use, without bombarding them with useless, generalized and inaccurate stuff. Information about their customer journey, the pain points, issues they faced during the purchase experience, product reviews, delivery and packaging, ease and security of payment can be gleaned through feedback. You can also derive information post-purchase by collecting information that they put out on social media. This information keeps in step with their changing requirements and preferences, and in turn helps you serve them better.
5. Marketing Strategies: Digital marketing strategy is the cornerstone of marketing today. Through data, you have access to huge amounts of information about your customer. This can be used to develop short, mid and long term marketing strategies. You can also use this information to plan your product trajectory, manufacturing or B2B efforts, and most importantly, make predictions for the future health, growth and sustainability of your company.