Benefits and Challenges of using Customer Data

As e-commerce exploded in the last decade with the advent of stable internet and powerful mobile devices (Fagan, 2020), so has the amount of customer data that is being generated with all the various customer touchpoints now available online ecosystem.

Types of Data collected (Roberts, 2013)
  1. Identity data – Contact details, social media ids etc.
  2. Quantitative data – Transactional information, online activity etc.
  3. Descriptive data – Family, Lifestyle, Career details etc.
  4. Qualitative data – Opinion, feedback etc.
While there is a lot of value that can be derived from this rich customer data (Stringfellow, 2017), this also presents a new set of challenges in managing this data as well.
Customer Data Platforms
To overcome these challenges and to reap the benefits of customer data, there are specialized big data solutions called Customer Data Platforms (CDP), which combine the functionality of Customer Relationship Management (CRM) and Data Management Platforms (DMP) for better integration of various data collected from first, second and third-party sources. (Microsoft, 2019).

Source: bigdatavietnam.org

These CDP’s provide a holistic 360° customer intelligence (SAS.com, 2019) which can help businesses leverage their customer data through not only customer data analytics (CDA) but also using AI and Machine Learning technologies for predictive analytics and marketing automation to increase and maintain their competitive advantage.

References

  • Bernazzani, S. (2018) RFM (Recency, Frequency, Monetary Value), Explained in 600 Words or Less. Available at: https://blog.hubspot.com/service/rfm-analysis (Accessed: 20 February 2020).
  • Exponea (2019) CDP  Predictive Analytics.pdf. Available at: https://elearning.dbs.ie/pluginfile.php/1129284/mod_resource/content/1/CDP%20%20Predictive%20Analytics.pdf (Accessed: 18 February 2020).
  • Fagan, J. (2020) eCommerce: A decade in review, Kooomo Blog. Available at: https://blog.kooomo.com/ecommerce-a-decade-in-review/ (Accessed: 20 February 2020).
  • Microsoft (2019) What Is a Customer Data Platform | Microsoft Dynamics 365. Available at: https://dynamics.microsoft.com/en-ie/ai/customer-insights/what-is-a-customer-data-platform-cdp/ (Accessed: 18 February 2020).
  • Roberts, J. (2013) The four key types of customer data for marketing or... how valuable is knowing my customers pet’s name?, Smart Insights. Available at: https://www.smartinsights.com/customer-relationship-management/customer-privacy/types-customer-data/ (Accessed: 20 February 2020).
  • SAS.com (2019) SAS Customer Intelligence 360 | SAS. Available at: https://www.sas.com/en_us/software/customer-intelligence-360.html (Accessed: 20 February 2020).
  • Stringfellow, A. (2017) NGDATA | What is Customer Marketing Analytics? Benefits, Best Practices, NGDATA. Available at: https://www.ngdata.com/what-is-customer-marketing-analytics/ (Accessed: 20 February 2020).

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