Benefits & Challenges of using Customer Data in Marketing

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Today, customer data is being generated at an unimaginable rate, which is being analyzed and put into use for marketing purposes. This data is used to create personas which can later possibly help in predicting consumer buying decisions. The data consists of:
Identity Data – Name, Address, Contact, Email, Social network, Job information, etc.
Quantitative Data – Online & Offline purchase information, inbound and outbound communication information, online activity, etc.
Descriptive Data – Family details, Lifestyle details, Career details, etc.
Qualitative Data – Information about attitude, opinion and purchase motivation information.
                                                                                                                                       (Smart Insights, 2013)

This data is used by brands and they have their own pros and cons.

Benefits:
With availability of customer data, marketers can come up with customer segments based on their demographics and psychographics. These segments can be used to target marketing communications more effectively. This segmentation doesn’t only make sure if the message is delivered to the correct person, but makes the process very cost effective as well. For example, e-mail marketing for a particular target (Botibol, 2016).
Studies have shown that customers who are offered personalized shopping journey, engage more. Hence, marketers use this data to send communications that match with the consumer’s online experience and interests. This is more of a customer-centric approach which makes the customer feel important and also the customer receives and improved post-purchase service (Botibol, 2016).

Challenges:
As effective as it sounds, it also has challenges to implement using customer data in the field of marketing. In order to use customer data, it’s important that its analyzed in a way that will help the company make use of it for marketing purposes. This can either be done using CRM or Customer Data Platform which in both the cases is expensive. Apart from the cost, Data Protection is another can be a major challenge while using customer data as the laws differ from place to place (Curnow, 2016).


Reference list
Botibol, A. (2016). The benefits of database marketing for marketers and customers. [online] Bluevenn.com. Available at: https://www.bluevenn.com/blog/benefits-of-database-marketing [Accessed 25 Feb. 2020].
Curnow, S. (2016). Overcoming the challenges of database marketing. [online] Bluevenn.com. Available at: https://www.bluevenn.com/blog/pros-and-cons-database-marketing [Accessed 25 Feb. 2020].
Smart Insights. (2013). The four key types of customer data for marketing or... how valuable is knowing my customers pet’s name? | Smart Insights. [online] Available at: https://www.smartinsights.com/customer-relationship-management/customer-privacy/types-customer-data/ [Accessed 25 Feb. 2020].
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Comments

  1. Melissa25 February 2020 at 03:03

    Good insight of the benefits and challenges of Customer data. Thanks for sharing

    ReplyDelete
  2. Urmisha Korgaonkar25 February 2020 at 04:59

    Very Informative article. Great work.

    ReplyDelete
  3. Unknown25 February 2020 at 05:58

    Thank you for sharing...

    ReplyDelete
  4. Arjun Negi26 February 2020 at 07:37

    Good stuff

    ReplyDelete
  5. Colin Almeida26 February 2020 at 07:51

    Customer data is important for marketing and you have explained how we can implement it efficiently.

    ReplyDelete

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