Sure, companies collect reams of customer data. But is it useful? According to 1to1 Media's 2009 Spring Data Survey, the answer is, "It depends."
The top five uses of customer data today, respondents said, are understanding customer value/profitability (47 percent), crafting marketing messaging (47 percent), creating up/cross-sell offers (46 percent), segmentation (34 percent), and pricing (20 percent). Based on these goals, not all customer data is equally valuable.
Most respondents are looking for data that predicts potential customer behavior or that reveals sales opportunities. More than 40 percent of respondents said purchase activity is the most valuable data their companies collect. Respondents noted several reasons for this-the primary one being that transactional data shows actual customer behavior. "Despite all that we think we might know," said one respondent, "purchase activity tells us exactly what the customer is buying from us." Consequently, purchases activity is often the basis identifying renewal and cross- or upselling opportunities. Additionally, marketers can use it for both predictive and historical analysis. And they do. They examine purchase activity for changing purchase patterns and buying habits, and in some case match that information to market and price data to plan marketing and sales activities.
Demographic information is another source of high-value customer data, according to 20 percent of respondents. Respondents that cited demographics as the most valuable data their company collects said it can reveal how qualified a prospect is, helps to predict customers needs, enables target marketing and segmentation, and provides the ability to better tailor offers and marketing messages. Products owned (11 percent), Web activity (6 percent), and psychographic information (4 percent) rounded out the list of the top-five sources of most-valuable data.
Web activity topped the list of the least-valuable customer data respondents collect, cited by 21 percent of respondents. The most common reasons respondents collect it anyway are that many marketers are trying to understand the connection between the Web and sales results in other channels and determine customers' primary goals in using their websites. Others noted that Web activity is a lesser-used but growing customer touchpoint.
Two types of customer data---demographic and psychographic-tied for second place in the list of least valuable customer data at 20 percent. Fourteen percent of respondents said products owned is the least valuable data, and not surprisingly, only 4 percent noted purchase activity as least valuable.
Psychographic and demographic information also made the list of customer data that respondents would like to collect that they don't now, at 11 percent and 9 percent, respectively. Competitive information (6 percent), customer needs and preferences (6 percent), and Web activity (5 percent) rounded out the top five. Of the 9 percent of respondents who said, "None," the two most common reasons were that they have all the data they currently we need or they have more information than they can act on.
Like customers themselves, customer data varies in value based on business goals. Understanding where that value lies is the key to a successful data strategy.