How to leverage customer data for marketing: dos and don’ts
If content is king in the world of marketing, then data, surely, is the parliament that keeps it relevant and accountable to the people
Retailers, banks, CPG brands, e-commerce — virtually any kind of business can benefit from customer data: from data-driven personalized marketing, to business growth and planning. In this article, let’s talk about using customer data for marketing (and what brands shouldn’t do with it).
Advantages of leveraging customer data for marketing
So, why exactly do we want to use customer data?
Well, first of all, because it’s the key to understanding your audience. Without which there can be no efficient use of marketing budgets: how can you personalize your messages if you don’t know who you’re targeting? And brands want to because that one-size-fits-all spray-and-pray marketing — just doesn’t cut it anymore. Customers want and expect personalization. Recent research from McKinsey & Company shows it in no uncertain terms: 76% of consumers get frustrated when communications they receive are not personalized. Personalization boosts performance.
But enabling personalized marketing is just one of the benefits of data. It can also provide insights that you can use to improve your services, highlight opportunities for growth, and help not only catch your customers’ attention but keep it, too, by boosting customer satisfaction. It paves the way for a whole range of improved KPIs, including:
- Higher conversion rates
- Better customer acquisition numbers
- Improved customer retention
- Higher engagement rate
- Resilient brand loyalty
- Boosted customer lifetime value
- Customer satisfaction
And even as you implement your data-driven insights to supercharge your next marketing campaign — it will generate more data, with which you'll be able to track your performance, fine-tune segmentation and targeting, identify where you could improve, and spot opportunities for upselling and cross-selling.
Simply put, there’s no reason not to use data for marketing — provided you do it right. So, before we talk about how to use data, let’s introduce some necessary boundaries.
Data security and privacy
First of all, the major cornerstone of using customer data is customer consent. Yes, it may seem contradictory, but consumers want both personalization (which requires some use of their data) and privacy. In a recent survey, 79% of respondents were concerned that companies knew too much about them — but at the same time, 90% were willing to provide their behavioral data in exchange for some kind of benefit to them (for example, a cheaper and smoother shopping experience).
In reality, there is no contradiction here. The two keys that draw the line between “good and clever marketing” and “stalker marketing” are transparency and customer consent:
- Collecting and using customer data only with their permission is crucial to maintaining their trust.
- Using data where it makes sense and respecting your customers’ private spaces.
- Businesses need to be transparent about their use of customer data: making sure that customers are both aware of it and able to opt out or choose how their data is handled. As mentioned, when customers feel in control of their data, they are quite likely to share it willingly.
And if you’re wondering what difference it makes, consider this: the same survey showed that, for more than 40% of respondents, lack of awareness about and control over the use of their data made some marketing feel “creepy.”
Next, if you handle customer data, customers are likely to hold you accountable for its safety and privacy. When it comes to secure messaging marketing, there are a few red flags brands should watch out for when selecting a messaging platform:
- Messaging app stores the content of your messages on its servers.
- A subpar encryption standard is used.
- Lax verification procedures are in place for official accounts.
What brands should be looking for is a messaging platform that treats security earnestly, conducts rigorous verification for official accounts, ensures reliable encryption of brand-user chats, and allows only secure HTTPS connections to its servers. Settling for anything less is simply not worth the associated risks.
Hot to get started: How to launch your data-driven marketing strategy
Now that privacy and security are introduced to your strategy for using data in marketing — where to start?
Step 1: Set your goals & expectations
What are you trying to achieve with data? Increase traffic to your website? Boost conversion rates? Or, perhaps, improve your relationship with the customers? This is a crucial step for two reasons: first of all, it defines what kind of data you will need. And secondly, it should tell you which metrics to track: otherwise, you won’t be able to measure the performance of your new strategy — whether it works.
Step 2: Gathering your data
Once your goals are clear, you can start collecting the data that you need to reach them from a variety of sources, including your website, social media, and even customer service desk. A CRM or a CDP can simplify your work with data tremendously, and many messaging apps allow integrations with these systems.
Step 3: Analyzing data to make sound marketing decisions
Data analysis is a chance to review your data, identify trends and patterns, and inform the assumptions that will go into your marketing strategy. For example, it can do something as simple as exposing the strengths and weaknesses of your current strategy: sometimes, a wheel needs only to be realigned, not necessarily re-invented.
Examples of personalized marketing, courtesy of Rakuten Viber
Step 4: Implement data-driven jnsights to improve your marketing
It’s time to put your findings to use: segment your audience (for instance, by location, gender, age, etc.) and tailor your communication to each segment. Track your campaign’s performance by segment, draw conclusions, try new things, see what works better (for example, by using a/b testing) for each segment — and learn, learn, learn. Data is power because it gives you knowledge. And knowledge is what brands need to keep improving and stay ahead of the ever-shifting world of modern marketing.