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Consumer Data: Expectations & What to Know

by Jul 20, 2023Audience Targeting, Consumer Database Marketing0 comments

What Is Consumer Data?

Consumer data is the information that companies collect about consumers to better understand their behaviors, interests, and preferences. This data is the secret sauce that many businesses use to spice up their customer experience—whether they’re in e-commerce, SaaS, or they’re a service provider.

You can use consumer data to identify, reach, and engage with new customers that fit your ideal target market. Consumer data is also an essential part of your marketing strategies since you can use the data to make your marketing communications more relevant.

Getting more data points, and knowing how to use them, is an integral part of your company’s growth. Reaching new audiences and knowing your customers better gives you a competitive advantage—allowing you to rise above the competition and stand out as the best option in the industry.

Consumer data comes in many forms: It could be demographic information like age, gender, income, or occupation. It could be location data, telling you where your customers are located. Or it could be behavior data, like what products they’re buying, how often they’re buying them, and how much they’re spending.

We’ll talk more about the four types of consumer data later on, but first, let’s talk about how you can collect consumer data.

The Evolution of Consumer Data

By 2023, we have gone through enough data breaches that customers are savvy enough to know their data might end up for sale on the dark web if they’re not selective. Your collection method will depend on what kind of data you’re trying to gather and how you’re planning to use it. It’s your job to find secure ways to collect data, but be mindful that consumers’ guards are up.

In the past, businesses could only rely on traditional methods such as surveys, questionnaires, and focus groups to gather consumer data. Insights gathered from this method are still gold, but it’s much harder to convince customers to talk to you now.

However, with the advent of digital technology, you now have access to a wealth of consumer data collected through website analytics, cookies and tracking technologies, mobile apps, and IoT devices. These tools have not only made data collection faster and more efficient, but they touch on things you might not have been able to measure previously.

For example, through website analytics, you can conclude whether or not the messaging on your website resonates with the audience you’re trying to reach. Previously, you might come to this conclusion using user testing, but since the test group is just a sample of your entire audience, what you get is still a hypothesis instead of a conclusive result.

Modern data collection methods allow you to dive deeper into consumer behavior, giving you a more detailed understanding of your customers. Yet this new method comes with its own problems. 

As consumers become more aware of how their personal data is used (and sometimes misused), they’re demanding more control over their information. This has forced businesses to rethink their data collection strategies and come up with more ethical and value-driven methods.

For example, instead of relying on third-party cookies (which are being phased out by many browsers due to privacy concerns), marketers are now focusing more on first-party data collected directly from their customers or on quality third-party consumer data collected by data compilers. 

And let’s not forget about the regulations that have come into play: Laws like the Colorado Privacy Act (CPA) and California Consumer Privacy Act (CCPA) have set strict rules on how businesses can collect, store, and use consumer data. These regulations have added another layer of complexity to consumer data collection, but they’ve also helped ensure that businesses handle consumer data responsibly and maintain their customers’ trust.

Different Types of Consumer Data

There are 4 types of data you can collect.

  • First-party data is information that you collect directly from your target audience, such as website visitors, newsletter subscribers, and customers. This data is considered the most reliable for understanding and predicting your customers’ behavior and purchasing habits. For example, if you run an online store, behavioral data such as the browsing and transactional data of your customers would be considered first-party data.
  • Second-party data is information on your audience that you don’t collect yourself. The most common way to collect this data is through partnerships or co-ops with other brands. For example, if you join an industry conference as a sponsor and a speaker, you might be able to get data from the audience who showed an interest in your subject. You might also get this data based on an agreement to share data with another company you trust.
  • Third-party data is information that’s collected by an external organization that doesn’t have a direct connection with the consumer. Data compilers gather this information from multiple sources—which can include public records, court filings, real estate transactions, surveys, member registrations, magazine subscriptions, transactional history, and charitable donations—and package them up as datasets that you can purchase for your company for audience targeting, customer enrichment, or data analytics. With a company like Deep Sync, you can get high-quality data at scale.
  • Zero-party data, the newest addition to the category, is data intentionally shared by your customers. This is often in the form of feedback, such as surveys, interviews, or poll answers. Zero-party data can be extremely enlightening. During the collection process, you can figure out what your customers are looking for from your brand without guessing. They will explicitly tell you what kind of experience they’re looking for, and it’s up to you to distill the right insights and adjust the customer journey. This also includes contact information shared voluntarily in exchange for a deliverable, such as your customers’ names, phone numbers, or social media handles.

The Significance of Using Consumer Data

A seamless customer experience driven by consumer insights is quickly becoming the determining factor in whether consumers choose your products or your competitor’s.

  • Personalize Marketing: With consumer data, you can tailor your marketing efforts to match the preferences and behaviors of your customers. You can use segmentation to create more specific campaigns with the data you have. For example, Target used data analytics to predict certain life milestones, such as pregnancies. With this data in mind, they send targeted newsletters to sell products often bought by pregnant women. This makes their marketing campaigns relevant and timely—a good combination for a better conversion rate.
  • Improve Customer Experience: By understanding what your customers want and need, you can make improvements that directly address these needs. Let’s say that you’re working for a SaaS company. Your new users rarely completed their onboarding; they couldn’t seem to find the one feature that can trigger the “Aha!” moment most users need to convert. Knowing this, you can create a better onboarding experience to make sure that your other users can complete their onboarding and see the value of your product.
  • Enhance Product Development: You can use your consumer information to understand what products or features your customers are most interested in, and then use this information to guide your product development efforts. This can lead to more successful products that meet the needs and wants of your customers and foster customer loyalty in the long run.

Data is a powerful tool, and your customers know it too. Customers don’t want their data to be used against them—whether by your company or a third party. It’s one of the main concerns you have to address when you collect data.

That’s why when you’re dealing with consumer data, you’ve got to play by the rules.

That means adhering to ethical practices around data privacy, like SOC 2 Type II compliance, and adhering to data security laws and regulations, like the Colorado Privacy Act and California’s CCPA and CPRA. These regulatory guidelines set out strict rules for the collection, storage, and use of personal data, ensuring that businesses handle consumer data responsibly and maintain their customers’ trust.

There are various other data regulations in place to make sure that you’re protecting your customer’s data to the best of your ability. Yet, proving that you’re following ‌the privacy regulations in place doesn’t mean that your customers will immediately hand over their data.

Think of it as any transaction but with data as the currency. Your customers will give you their data. In return, you’ll use this data to improve their experiences with your brand.

Securely Access Consumer Data With Deep Sync

Consumer data helps you understand your customer’s wants and needs and find new customers that match your ideal target market. Having this information is a big part of creating a winning strategy that will help you outperform others in your industry.

You can collect this data straight from your customers by tracking their data or asking them for voluntary information. Alternatively, you can purchase data from third-party providers like Deep Sync and gain access to thousands of data points that you wouldn’t be able to collect on your own. If you’re looking for high-quality data, purchasing it from reliable data sources is your best bet.

Get ready-made audience segments or build your own custom segments for ad targeting and social media with the Deep Sync One platform. Or, work with a Deep Sync data expert to solve any first-party or third-party data challenge you might have!

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