Data has become the lifeblood of business in today’s modern world. Just as with physical resources such as oil, data now has a known value, but accessing vast amounts of data is easier said than done. Businesses can collect raw data through a few different means, but not every business knows what services and channels will yield the best data. Raw data must be combined with analysis and insight for a business to truly see the benefits of data collection. Some businesses use data processing tools or suites like a PI System to ensure the collected data can be analyzed and understood so the data can drive decisions. Below are just a few ways businesses access valuable data and use that data to improve.
Companies gather data in many different ways from many different sources. Some collection processes are highly technical, while others rely more on deduction working in concert with specialized software. The data companies collect ranges from customer information to competitor information and almost any other field. One company might track data that is harder to quantify, like customer behavioral data, while a different company might track financial data.
Customer data is collected using three main methods: directly asking customers for information, indirectly tracking customers, and adjoining data a company has already collected with data from outside sources such as data markets or exchanges. A successful data-driven business will use all three of these methods to create the most robust data set possible.
Directly Asking Customers For Their Data
Many businesses will directly ask their customers for data. Creating an account, signing up for a newsletter, buying a product, or interacting with customer service usually requires a customer to fill out a form of some kind. Generally, the form will ask for a customer’s name and email address at a minimum, but other demographic or firmographic information like mailing address and age are common form fields. After a customer purchases a product or interacts with customer service, many businesses will send the customer a survey. The customer’s answers to the survey will be collected and used for customer profiling. A company will also dig through their own customer service records to track customer interactions with sales and support. Tracking customer service data lets a business determine if customer feedback has been successfully incorporated and if those changes made a measurable difference on the customer experience.
Indirectly Gathering Data
Directly asking customers for their data will only get a company so far and many companies turn to indirect customer tracking to widen their database.
Social media platforms are a gold mine for businesses looking to collect customer data. Most social media users will freely and publicly post their personal information which lets companies scoop up the data, add it to a database, and use it to improve the business.
Email tracking not only tells a business when a recipient has opened an email but also what device the message was opened on and where that device was. Roughly 40% of the world’s 269 billion emails were tracked in this manner in 2017 according to WIRED.
Cookie data collection is valuable to small or mid-sized companies as they can combine cookie tracking with services like Google AdWords and Facebook Pixel. Facebook Pixel does not directly sell customer data, but it does sell access to data-profiled customers that ensure target ads on Facebook are paired with the right customer.
Buying Additional Data
Companies can always buy additional data from third party services. There are entire businesses that sell data as their only product. Big data companies like Acxiom exist only to collect, analyze, and sell customer and business data for other businesses to use. Oracle, another massive data company, collects data from smaller data companies as well as a plethora of other sources, such as eCommerce sites, government censuses, and electoral registrations. There are global data markets, like the data exchange offered by Lotame, and once data makes it onto the market, it will never leave as data regularly changes hands.
Many data brokers operate in the shadows with company names that never become widely known or recognized. A Vermont law passed in 2019 required data brokers to register with the state and over 120 companies in the state registered. More and more states are requiring data collection companies to allow consumers to opt-out of having their data collected.
Companies large and small use data collection and distill the data down to valuable insights that can lead to business improvements. Through directly asking customers for their data, indirectly tracking customers online, and buying additional data through third parties, a business can gather data to ultimately make the business function better for customers, and in turn, the bottom line.