The What, Why, and How of Data Collection
The way customer data is currently collected and analyzed will change whether you and your organization are ready or not. We recently conducted a research study to find out how professionals gather and use customer data as well as their perceptions around it, and we were intrigued by what we found and the patterns that developed across different attitudinal segments. Read on to find out what our respondents shared about their organization’s current approach to data collection, usage, and purchase.
The More First-Party Data Collected, the Better
After surveying more than 230 professionals across the United States, we found that most professionals work with data in their roles. In other words, being familiar with data and how it’s collected and used is extremely important in today’s job market.
In regard to the data being collected, 68 percent say they collect basic identifying information, such as someone’s name, phone number, email address, and home address. Half also say they collect purchase frequency, purchase history, and customers’ personal information (such as lifestyle, interests, and household income).
Out of the three segments that emerged in the research study—Independent, Data-Reliant, and Concerned respondents—we found that the Data-Reliant group is more likely to also collect social media information, website visits, and page views. In this group, respondents aged 20-29 are more likely than those older than 50 to say they collect social media engagement data. Independent respondents are also more likely than Concerned respondents to say they collect purchase history.
What these statistics tell us is that everyone can benefit from collecting basic identifying information and social media usage. Contact information is essential if you want to market to your customer target base or tap into them to collect even more data. To find out how your customers use social media, consider sending them an emailed survey with an incentive to increase engagement.
Additionally, not only do companies need to think about how to collect the data they need, but they also need to make sure their data continues to be relevant. When making a plan on how to collect data, don’t forget to think about protecting people’s privacy and communicating relevant information about privacy to your audience.
Collect Your Own Data to Stay in the Driver’s Seat
If you need customer data, you have one of two options: collecting it yourself (i.e., first-party data) or buying it from a third party. However, data-related legislation will change this. Since the question is when not if, it’s more essential than ever to think about collecting your own data.
Through our research study, we found that Independent respondents covet consumer privacy. They believe their organization can weather any data storms that arise and are the least likely of all respondents to see data-related legislation as a hurdle when it comes to their marketing efforts. This group says their organizations excel at first-party data collection, management, and analysis. On the other hand, Data-Reliant respondents don’t see ethical issues in using third-party data but believe data-based marketing is the best approach. Concerned respondents worry about their organizations using third-party data, how data sourcing impacts consumer perceptions, and whether their data is safe and private.
While 68 percent of respondents say their organizations collect basic customer information, 42 percent purchase data from outside sources such as Google or Facebook. Independent respondents are less likely than the other two groups to say their organizations purchase third-party data.
Interestingly, we discovered there are different attitudes about third-party data based on respondents’ ages. Those 30-39 years old are more likely than those over 50 to say their organizations buy third-party data.
When laws impacting data sourcing and usage go into effect or when Google phases out cookies, organizations must be agile in how they collect data, manage, and analyze it. To put yourself back in the driver’s seat, create a system today that ensures your organization can rely on its own data in the future. The answer to data-based legislation isn’t reducing data-backed marketing—especially because personalization, customization, and segmentation are so vital for effective marketing today. Customer data is more valuable, and needed, than ever.
To be prepared for the shift, you’re going to need to make some changes within your business, specifically in marketing and sales. Which attitudinal segment you identify with is going to make a big difference in your readiness and the changes you’ll notice in your business.
Those that identify with Independent respondents will weather the shift fairly well and won’t see a noticeable shift in their day-to-day course of business. However, Data-Reliant and Concerned groups may see low-performing campaigns, less web traffic or longer close rates. This is because it’ll become harder to target ads across all mediums to your ideal customers without access to third-party data. You’ll also miss out on personalization. Although customers want to be marketed to, they also want to feel valued—not just like your next sale.
Our respondents also recognize the importance that customer data plays in sales and marketing. 82 percent say their organizations use customer data to identify potential customers for sales purposes, and 79 percent say it’s for marketing purposes. We also found that Concerned respondents are less likely to say their organizations use customer data for marketing activities.
Adapt Your First-Party Data Collection to a Changing World
The pandemic has changed our world, and marketing wasn’t an exception. Many people’s priorities shifted, some quitting their jobs or moving across the country. Nearly everyone prioritized their relationships and connecting. As a result, a lot of data became outdated quickly (even in the span of six months.) Consumer behavior is continuing to shift as many are hopping from one brand to another because of better features or better prices.
Technology is one reason data keeps changing. It’s easier than ever for consumers to set up ghost or anonymous accounts to hide their real name, email, or phone number. In addition, spam filters and ad blocking technology make it harder to break through even when the customer wants to see your marketing.
Even with the accelerated rate of data changing, you should have a clear view of who your customer is and what they want. And once you know that, you should tailor your message to those customers. As technology continues to change, there are tools you can use to reach your customers where they’re at. If you’re not sure where to start, let us know—we love a good challenge and strategy.
In our next blog, we’ll share our research findings on data storage, including differences between attitudinal segments, the consequence of poor data storage, and how to collect data effectively.