In Modern Business, Data Is King

Posted on Jul 28, 2018 - By Leesa Love

In today’s high-tech world, online presence is virtually unavoidable, and even vital to navigating the business realm. If a company is not advertising its products or services online, it’s missing out on substantial profit opportunities. This is true not only from a sales standpoint, but also from a marketing perspective. In the real world, advertisers can only do so much to reach their audiences. They place ads on relevant television channels and other platforms, hoping to find the right consumers. The online world, on the other hand, now stretches beyond these spatial constraints with help from a little tool called “user data.”

Businesses are not the only entities establishing a presence online. Each individual user has a unique online impression made up of search history, sites visited and products viewed or purchased. This information is often combined with demographics and survey answers in order to build a graph of data. A graph like this allows advertisers to construct detailed customer profiles. In turn, these profiles help streamline marketing strategies and create a tailored experience for each user. When utilized responsibly, user data is not only the key to increasing profits, but also to strengthening customer satisfaction.

However, before it can be utilized effectively, it is important to understand exactly what user data is and where it comes from. Advertisers are able to view user data from third-party sources like Google, or directly from users who interact with their content. In addition to different sources, there are also different kinds of data. In order to create an effective customer profile, advertisers often examine a combination of data types, such as:

  • Signal data: This data is made up of what online consumers search for and the context in which they initiate searches. Signal data helps outline information including how users arrive at a business’s website and what pages they view while there. In addition, it shows how users leave the website, like by closing the browser or heading to another page.
  • Profile data: This is demographic information about consumers. These types of demographics include user hobbies, favored news sites and customer status, among other details. This is gathered based on the types of sites visited and the products viewed frequently.
  • Explicit survey data: This type of information is provided directly by consumers who fill out a survey. Advertisers ask questions relevant to their business and receive results right from the user. This information is highly valuable as it does not require as much interpretation as other types of data.

With all of this data, businesses can begin to form an idea of whom their customers are, and what they want. From there, it is possible to initiate custom marketing plans that both enhance user experience and generate higher profits.

The Reign of User Data

User data is currently one of the most valuable tools online advertisers have at their disposal. With no sign of disappearing, more businesses are turning to data to create new and improved marketing strategies. One of the main concerns in ecommerce is learning how to connect with customers despite the limits of the medium. The interpersonal side of business is slightly muted through the internet, making it more difficult to establish a rapport. Gathering user data helps businesses get to know their primary audience, in order to market to them effectively.

The information collected is used in several different ways. Ultimately, it helps to predict user interactions with different products and services they come across online. Harnessing user data allows businesses to bridge the interpersonal distance in ecommerce and personalize the experience. With knowledge about areas like special interests, advertisers can create targeted content that is likely to appeal to consumers. For example, an athletic store that knows your favorite sports team will market products with that team’s logo to draw your attention.

Furthermore, analyzing customer information like past purchases and products viewed helps to predict future transactions. If you purchase a computer, the merchant can suggest related items you might need, such as an external hard drive, headphones or a printer. This way, businesses increase profits while also adapting to the needs of each customer. It is with this kind of user-centric marketing that businesses cultivate solid relationships with consumers. They can address customer concerns more efficiently and receive useful feedback, as well. In the end, this leads to the creation of better products, improved services and happy repeat customers.

Transparency Is Golden

As vital as the information is to online advertisers now, it is important to remain transparent about user data. Many consumers are aware at this point that their information is collected by the websites and applications they frequent. While most customers don’t mind sharing a certain amount of personal information, they want to stay informed on the process.

As a result, the demand for transparency and accountability among online businesses is high. Lack of transparency concerning data collection is often seen as a violation of privacy. Modern consumers require companies to report what data is collected, how it is stored and what it is used for. Additionally, they expect these companies to protect any information collected and to use it to provide quality customer service.

The easiest ways to remain transparent about user data is to explain your practices up front, like:

  • What security methods are used to protect information (i.e. encryption).
  • How survey answers are used to improve the customer experience.
  • Who has access to the information collected.

The success of an online business rests with its customer relationships. It is important not to violate the trust of consumers if you hope to retain them as customers. With this in mind, successful businesses establish trust through responsible data-collection practices. They are candid about data collection and use the information to improve user experience. With a responsible approach to harnessing user data, businesses can draw in new customers and keep them coming back for more.