Contrary to popular belief, more data doesn’t always mean better business. It can actually lead to confusion and a poor customer experience
According to an EY study, 93% of companies indicate that they plan to increase investments in the area of data and analytics. While organizations are trying to be more data-driven, they must find the right balance to offer improved services without invading customer privacy.
Less is More
As there are no clear guidelines on how to collect data in a way that is ethical and not excessive, businesses are finding it hard to know where to draw the line. Major tech corporations like Apple and Meta have differing opinions when it comes to tracking users’ data. Most data privacy scandals are a result of an unclear understanding of what “excessive data” is and how it can be misused. Tim Cook, CEO of Apple, went as far as to tweet that privacy is a fundamental human right, and companies should recognize that data belongs to the users.
To avoid privacy violations, organizations must regulate the data that is being collected from their users and know what they are collecting it for. Unrestricted data collection in any form could create mistrust among users. Moreover, companies will have to pay a high price if they make the wrong decisions based on bad data. So it’s important to evaluate your business goals and collect data that are adequate, relevant, and not excessive, while still serving your business purposes.
Leverage First-Party Data
When data comes from the channels you own, it’s easier to regulate. Therefore, utilizing first-party data can help you comply with evolving privacy regulations. Google is still working on eliminating third-party cookies. When that happens, businesses will have to rely more on first-party data. This shift can actually make marketing outlets more effective, as businesses can build a direct relationship with their existing customer base and learn to target prospects better.
Unlike generalised third-party data, first-party data offers specific customer insights. For instance, if a cosmetic company decides to target its audience using demographic data, it might lose out on queer and non-binary consumers. Companies must focus on first-party data that comes through website traffic, surveys, and contact forms, and use it to improve their marketing strategies.
Contrary to popular opinion, hoarding customer data won’t guarantee business growth, but collecting the right data will. Regardless of its quantity, having high-quality, relevant data will enable organizations to make the best strategic decisions.
If you’d like to know more about sensitive data and how you can protect it, check out ManageEngine Data Security Plus.