Benefits and Challenges of using Customer Data for Marketing

Customer data is defined as the information your customers provide while interacting with your business via your website, mobile applications, surveys, social media, marketing campaigns, and other online and offline avenues. (Deshpande, 2019). 

Years ago, marketers would just target mass audiences with advertisements all around the city or on the TV. Of course, this represents big expenditures on marketing and very poor KPI metrics to monitor the effectiveness of the marketing campaigns. 

Nowadays, marketers have access to a big amount of customer data but, why is customer data important for marketing?

One of the benefits of customer data is that, and thanks to a single customer view database, we can know better target our customers. Segmenting customers is not only good for ensuring that the correct person receives the most appropriate message, but it is also far more cost-effective than a "one message fits all" approach to direct marketing. (Botibol, 2018). Hence, our marketing campaigns can be more efficient in time and money. 

Furthermore, by analyzing your customer data it can help you identify the most loyal and profitable customers and offer them something, in particular, to show them your appreciation, besides, by knowing them better you can create a more personalized shopping experience, therefore enhancing engagement and retention of customers. 

Even though all the above may sound too good to be the truth, the use of customer data come with challenges marketers have to overcome in order to get the most of the benefits mentioned above. 

One of the challenges of using customer data is the integration of this data from multiple platforms, for example; the activity a user has with your brand in Facebook, Instagram and in your website, you might see all this activity reports from each platform and the problem is when you try to gather every all the information and try to make sense of every touchpoint, although this can be solved by using a customer data platform so the software can help you create a single customer view. 

Another challenge is keeping your data "clean", otherwise, old or wrong data will keep you making wrong decisions about your customer's real interests, so is important to keep your data up-to-date.

In conclusion, you have to choose the right tools that help you manage your customer data, such as a CDP, where you can have a better insight into each customer and therefore you will be capable of having personalized and more efficient communication with each of them. 

References

Horne, J. (2018). “The Challenges of Data-Driven Marketing (And How to Overcome Them)”. Available at: https://www.digitaldoughnut.com/articles/2018/december/the-challenges-of-data-driven-marketing (Accessed 15 Feb 2020). 

Botibol, A. (2018). “The benefits of database marketing for marketers and customers”. Available at: https://www.bluevenn.com/blog/benefits-of-database-marketing (Accessed 15 Feb 2020). 

Deshpande, I. (2019). “What Is Customer Data? Definition, Types, Collection, Validation and Analysis”. Available at: https://www.martechadvisor.com/articles/data-management/customer-data-definition-types-collection-validation-analysis-martech101/ (Accessed 15 Feb 2020).