Why You Need Data and How to Extract It
Have you ever heard the phrase “Scientia potentia est”? It’s Latin for ‘Knowledge is Power’. Just like you might not understand the Latin phrase but do understand its essence, you may not fully comprehend the complex subject called data. But certainly, you are aware of its infinite potential, because, in today’s day and age, Data is Power. A report from Experian Data Quality found that “Understanding what consumers want through the data collected and knowing how to apply that data is what will differentiate laggards from leaders.”
So what is customer data and why is it so important? Let’s delve deeper into this by looking into how data can transform your business and how can it be sourced ethically.
Essentially, customer data is the information about customers in general. This information could be basic or personal such as name, contact, gender. It could be behavioral which depicts a customer’s purchase behavior and patterns, the data could also be attitudinal which helps to understand the customer’s emotional quotient, or it could be operational data that gives details about the customer’s interaction with a brand. Data can also be engagement data which is derived through the brand’s various customer engagement channels and mediums.
Why Is It Important?
- Deeper Understanding of Your Audience – In-depth understanding of the target group is the crucial groundwork required to create effective strategies and business plans. According to IBM, “33% of elite marketers say that having the right technologies for data collection and analysis is the most useful tool that helps in understanding customers.” Today, more and more companies are investing in data mining for the prime reason of understanding their customer base: their likes, dislikes and such other important factors that influence their purchase decision. Your customer data can give you vital information that will help you understand your customers better and help you design strategies that better resonate with your audience and have a high-efficiency rate.
- Aids in Designing Personalized Experiences – A recent report by Accenture states that “91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them.” In today’s competitive world, personalization is the ultimate strategy to gain traction and retain customers. It is something that the customers have started to expect from brands, especially post 2020 global digitalization drive, triggered by the pandemic. Perhaps the most important tool required to create a personalized experience is data. Data helps you understand your customer’s preferences whether it is preferred content, products, services or channel of communication. It gives you a good idea of what your customer’s persona and helps you create experiences that are personalized to your customer’s taste.
- Helps You to Automate Processes – Analyzing data can help not only in optimizing but also in automating processes. Once you understand your audience and analyze your data, it becomes much easier to predict and anticipate customer behavior. Your customer data plays a major role in helping you understand standard procedures. It also helps to automate processes that not only improve customer experience but also help to deliver premium service quickly and in a cost-efficient manner.
- Empowers You to Make Better Business Decisions – It is a known fact that tactical business decisions are not based on a whim but on hard facts and data. Data suggestions help determine what’s the most suitable option for your business currently as well as in the long run. Data-driven decision making is a common business practice and helps entrepreneurs and businessmen to make calculated business decisions. Data can help you make many tactical decisions such as what your next launch should be, what would be the ideal time to launch your product, which marketing strategies are worth continuing, and what are your customer’s expectations from the brand.
- Helps You Create a Better Customer Experience – Customer experience plays an important factor in customer’s purchase decisions. According to Forbes, “74% of consumers are at least somewhat likely to buy based on experiences alone.” To create a wholesome customer experience, you need to collect, study and analyze data. Data plays a key role in enhancing customer experience and help you to retain customers in the long run.
Safe Data Extraction Processes
In today’s world, data is precious and to safely, ethically, and legally extract data, there are global data protection rules in place. General Data Protection Regulation (or GDPR) has rules and regulations to ensure ethical data mining, storage, and transfer processes.
These laws also safeguard the interests and privacy of customers. According to the GDPR, companies are required to seek permission from the customers before extracting their information and even retract the data mined, in case the customer objects. The companies extracting the data need to have complete transparency with their customers about the information they are extracting, why they need it, and how intend to use the information.
Click here to learn more about data, data mining techniques, and how you can ethically extract information.