Benefits and Challenges of Using Customer Data for Marketing

Since data gain more importance for every field day by day, it brings the debate over database marketing and the benefits & challenges of customer data usage in marketing to create customer profiles.

Benefits

Database marketing is used by gathering and analyzing all the data types mentioned above together, and it helps marketers to perform well-targeted marketing campaigns with a better understanding of who their customers are. According to “The New Marketing Reality” report by Econsultancy & IBM, 33% of marketers think having the right technologies for data collection and analysis is the most useful in understanding customers. By collecting consumer data, businesses not only can find out the traits shared common across people who buy a similar type of products but also investigate their buying journeys. In other words, businesses can create models for the buyer’s journey based on this data for similar prospects (Minkara, 2014). As such, artificial intelligence can be used for matching products and customers to do product recommendations as one of the most significant advantages of data-driven marketing.

Companies can adopt a customer-centric approach to their customers which is significant for a healthy customer relationship by putting them into the centre and treated as individuals. After understanding the motivation of buyers, marketers can be positioned properly in presenting the right content to the right audience at the right time. Furthermore, real-time data and multiple channels can be used to trigger the customer’s impulses. Thus, the potential for sales and personalized buyer conversation can be increased by using the data on customers’ history with the company.

Challenges

When it comes to drawbacks for using customer data, it should be mentioned that both customer data platforms and CRM systems need investment and setting it up can be costly for small-scale businesses. Some of them prefer to work with third-party providers; however, it is also an ongoing cost to willing to pay.

As another challenge, the data’s quality should be distinguished. According to Discovery.org, sales and marketing departments lose 550 hours and as much as $32,000 per sales representative due to bad quality of data. 

Today it is essential to use customer data to perform better; however, it should be appropriately done and coordinated with data protection laws. Businesses operating in Europe should address GDPR regulations by getting consents from consumers to use their data and being transparent on how it is being used.

References

Heller, C. (2019). How to Keep Bad Web Form-Fill Data out of Your CRM. [online] DiscoverOrg. Available at: https://discoverorg.com/blog/bad-crm-data-quality-web-form/ [Accessed 19 Feb. 2020].

Ibm.com. (n.d.). The New Marketing Reality. [online] Available at: https://www.ibm.com/downloads/cas/X9DKEKOD [Accessed 19 Feb. 2020].

Minkara, O. (2014). Using Customer Data for Marketing: The Good, Bad & Ugly. [online] Aberdeen. Available at: https://www.aberdeen.com/cmo-essentials/good-bad-ugly-using-customer-data-for-marketing/ [Accessed 19 Feb. 2020].