Modern businesses rely on customer data to improve their services and outperform their competitors. In a report by Deloitte and Touche, companies that use customer data to make decisions increased their profits by 60%. Unfortunately, data collection is now more difficult due to stricter privacy laws resulting from the rising number of security breaches. This article will show you how to collect customer data while remaining compliant with these laws.
1. Prioritize security
The IBM Cost of a Data Breach Report found that the global average data breach cost reached $4.24 million in 2021, up by 10% from $3.86 million in 2020. Small- and medium-sized businesses, in particular, lose an average of $120,000 per data breach incident.
To avoid such costs and ensure the safety of customer information, you must invest in modern security systems and train your employees in data privacy best practices.
2. Exercise ethical data collection
You need to be honest and transparent about collecting customer data. This means developing clear privacy policies, allowing customers to choose what information to share, and disclosing how their data will be used.
3. Collect only the data you need
Approximately 60% to 73% of customer information collected by organizations is unused during the analysis process. This flood of data can overwhelm analysts and distract management from making effective decisions. Therefore, before gathering customer data, companies must first decide on the following:
What information to prioritize
How the information aligns with business objectives
How the data will be analyzed
How this data can help improve the business
4. Back up all data
All of your customer data collection efforts will go to waste if you lose the data because of cyberattacks, natural disasters, and IT failures, among other disasters. This is why you need to make sure that your business has an effective backup and data recovery plan.
5. Update customer data regularly
Having outdated or incorrect data, such as phone numbers, emails, and addresses, can prevent you from nurturing your relationships with your customers. To prevent this issue, regularly check and delete unnecessary data, duplicates, and inactive contacts.
Collecting and analyzing customer data will greatly benefit your company’s overall marketing strategy. If you’re looking for reliable IT solutions to optimize data collection, give us a call today.