Big data and what this means to business.
From elections to supermarkets, big data is being used everywhere, rapidly changing how businesses engage with their customers.
And are you aware of the new legislation coming into force in 17 months time? The European Union General Data Protection Regulation (EU GDPR) comes into effect in May 2018 so marketers need to get to grips with their legacy data to ensure total compliance.
Firstly we look at three ways it can help businesses attract customers, with examples of companies who have reaped the rewards of studying the numbers and then we consider the legislation on big data and what this means for business.
1. Big data means knowing what customers want
Big data allows you to check a customer’s past behaviour and make recommendations based on this.
Think of it like this. If you lived in a small village and went to a small local shop every day, the chances are you’d start to get to know the staff there. They’d know what you liked and they’d start recommending products specifically for you.
Big data allows online stores to do the same. Amazon pioneered this in online marketing years ago with their ‘featured recommendations’. Now, similar initiatives can be seen everywhere. From Spotify to Netflix, big data is changing the way businesses do online marketing.
2.Big data means predicting customer behaviour
Many companies are using big data to predict customer behaviour. Through social media data, for example, you can learn about individuals or a whole demographic, analysing and predicting their behaviour.
American Express is a good example. They have replaced traditional business intelligence-based hindsight reporting with sophisticated predictive models based on historical transaction data. This allows them to predict, among other things, customer loyalty. In the Australian market, the company claims it can predict 24% of accounts which will close within a month.
3. Big data means targeted advertising works
Everyone on Facebook has experienced this one. Facebook’s Insights tool analyses the social network’s big data, opening up data about consumers’ lifestyle, social media habits, shopping preferences and much more.
This is causing a revolution in the world of digital marketing. Before, companies could only use broad demographic terms such as age or address to target their audiences through online marketing. Social media big data however, provides a massive number of parameters which in turn allow marketing departments to target their audience much more accurately than ever before. It’s a fantastic way for a business to identify new customers and target their advertising far more effectively and efficiently.
What’s the marketing law on data?
The European Union General Data Protection Regulation (EU GDPR) comes into effect in May 2018. This means there are only 17 months left for marketers to get to grips with their legacy data to ensure total compliance. Considering 68% of marketers think their business won’t be compliant in time it’s important to know what you need to do in order to make the deadline.
Where does the EU GDPR apply?
The EU GDPR affects any company that holds information on customers in the European Union – so that means any company, even if they are not EU-based, is held to account under the regulation.
Handling legacy data is one of the biggest problems facing marketers when it comes to the EU GDPR. Many will have obtained customer or lead data from purchased lists, or from old newsletter sign ups, or through partners, or via any other number of means. One of the most important changes in the EU GDPR is that the customer must give explicit permission for the use of their data. So any database holding purchased information, for example, could be in breach of the new regulation.
The right to be forgotten
The EU GDPR also includes the right to be forgotten. That means any EU customer can request that all data held on them is deleted. If you sell your data on to third parties, you may need to follow up the request with them, too.
How do we meet the legislation?
Setting your database in line with EU GDPR may seem like a mammoth task, but there’s still time to break it down into a manageable approach.
The first step is to ensure any data collection from this point onwards has explicit permission from the user – so you know that any data collected from March 2017 is compliant.
However, the new regulations and the requirement of explicit consent can make it much trickier to get around big data collation if you haven’t already had permission from a customer or lead to track their details. You can’t just hide this in your terms and conditions either: it must be made explicit.
Step 1 – Put a clear note on your home page and other popular webpages
A quick way around this is to not hide away but have a clear acknowledgement on your home page or a landing page, in a similar manner to how cookie acceptance banners were implemented a little while back.
Step 2 – Contact all existing customers
With your legacy data, best practice is to contact everyone on your database with a simple opt in/opt out form. While this may result in a mass churn event, you can see that as a positive action: anyone opting out of your communications is likely to be a cold lead anyway. Doing this will clear your database and confirm your quality leads, so you know that any communications from now on will be going to customers and potential leads who are genuinely potential buyers.
Step 3 – Be prepared
The EU GDPR is designed to increase personal data protection and it means a lot of work for marketers. However, in the long run, the explicit confirmation required to hold personal data means there is a strong possibility of more valuable connections and fewer cold leads, improving the quality of any marketing database.
And if in any doubt, seek legal advice to ensure your business complies with the law.