Marketers use customer data in order to build stronger bonds with customers in order to activate and encourage acquisition, loyalty, and advocacy of their brand. And, the more you know about your customers, the better you can service them. Turning data into actionable insight is a key marketing tool these days, as long as you avoid the pitfalls. Here are three things to be conscious of while sorting through all of that customer data you hold.
Don’t risk data breaches.
No company wants to send out a mass email to their customers informing them that their customer data has been compromised, but sadly this scenario is becoming more commonplace. Privacy breaches are the concern of lawyers, executives, public relations flacks, and consumers. Try to mitigate the risks of data hacks by choosing your security systems wisely. Many companies protect their consumer’s financial data more carefully than its demographic and contact information. Sure financial data breaches pose a greater risk of damage, but letting your customer’s data fall into a hacker’s hands destroys customer loyalty and trust—preciesly the things you were trying to build by having customer data in the first place. Some organizations are set up to house secure data, while others are not. If your organization does not have a government-worthy security system in place around digital data, either get one, or outsource to one who does.
Treat your customer’s data like it is their own…because it is.
While technically and legally, the information your customers provide you belongs to you, they voluntarily gave it to you to receive services from you. No one forced them to give you that data. However, I like to think companies have a moral responsibility to consider that there is an implied contract between customer and company, one that says the data will be used to the benefit of the consumer, and not to be exploited by the company. In today’s digital world, consumers expect fair exchange for information. “I’ll give you information about who I am, but I expect you’ll deliver me good, personalized service in return.”
Don’t creep your customers out.
There is no such thing as having too much data on your customers, but there are some serious rules on how you use it.
You’ve assigned every customer a user number, tied it to their credit card, name, location, and email address, which becomes a bucket that stores a history of everything they’ve bought and any demographic information you’ve collected from them or bought from other sources. You’ve clustered these buckets into customer profiles. Now what?
Market in aggregate—or by cluster, not by individual activity. Customers don’t want to know that you’re watching their data, but they do like that you deliver valueable services and offers to them. Don’t use phrases that tip your hand as to why you know they’d be interested in a sale on garden equipment this weekend by communicating things like: “We noticed you like rakes, perhaps you’ll like our sale on brooms this weekend,” or “You haven’t bought a new garden hose for two years, time for a new one!”
And, be careful in analyzing data. You may have heard the story about how Target figured out a teen girl was pregnant before her father did, based on a big data analysis project that associated products purchased with a “pregnancy prediction” score? Target sent the girl coupons for baby items, and pissed off the father—“How dare you send my teenage girl baby coupons,” until he found out she was indeed five months pregnant.
In otherwords, use the infamous first date philosophy. Single daters often will check out a dating prospect online before a first date—checking them out on Google, and social networks like LinkedIn and Facebook beforehand. The trick is to pretend like you know less than you do so as not to creep the person out. Don’t creep your customers out.