Customer Data Types and Privacy-friendly Collection Tips

Your brand growth strategy depends on having accurate and timely customer data. In fact, data is the new currency. The Economist compares data with oil and just like when oil was the hottest commodity, data mining has regulations in place to ensure ethical data collection and management practices.

Consumers are more protective of their data than ever and expect brands to be good stewards of the data they share. In this article, we dive into the various categories of data, the specific types of data brands can collect, as well as key considerations and tips on safely and ethically collecting and managing customer data.

Customer data categories

Customer data typically falls into one of the following categories based on the type of details it includes and insights it can provide:

Basic or identity data

This is the most basic, yet important, information about your customers. This data includes things such as name, contact details, date of birth, gender, age, etc. This information helps you identify your audience demographic as well as build a basic buyer persona. Most CRM data can be categorized as basic data. It includes both Personal Identifiable Information (PII) as well as Non-PII data. The former may help you accurately identify a person while the latter will give you relevant information without disclosing the customer’s identity.

Behavioral data

This is the information a customer shares with you while interacting with your brand. This data helps you identify the customer’s behavior and purchase patterns. It points out the customer’s preferred products, preferences, most preferred communication platform, what time he/she most frequently logs in, what application or features he/she uses most and other related data. This data helps you gauge the performance of your product as well as design and execute your marketing campaigns.

Attitudinal data

Also known as qualitative data, this data helps you understand the customer’s perception of your brand. It helps you gauge the emotional aspects of your customers’ affinity towards your brand, products and the efficiency of in-effect marketing strategies. Attitudinal data uncovers customer satisfaction levels, the product’s appeal to customers and the depth of your customers’ emotional association with your brand.

Interaction data

Also known as engagement data, this data shows how, when and where a customer interacts with your brand. It basically aggregates data from various brand and customer engagement channels, including websites, social media platforms, mobile apps and customer service as well as email and text messages. It helps you understand campaign effectiveness, the efficiency of media channels as well as customer behavior.

Quantitative data

This is basically operational data that gives you insights into customer’s interactions with your company. It may include transaction details and history, communication history, customer support history and aggregate data of the customer’s online interactions with your brand.

Types of data based on how it’s collected

Zero-party data

This is data customers willingly, proactively and deliberately share with your brand in exchange for receiving better service and a more personalized customer experience. This type of data fundamental requires consent and collection solicits a direct customer interaction. Collection may be performed via surveys, quizzes, polls, website popups, download forms, loyalty membership registration or customer profiles. Details may include purchase intentions and preferences, communication preferences, lifestyle or hobbies or how they want your brand to recognize them. For example, Sam shares with his local coffeehouse that his favorite beverage is an extra hot double espresso with oat milk, he stops every morning on his way to work, he’s allergic to soy, and he thinks the chocolate croissants are to-die-for. The coffeehouse can now use this data to make personalized product suggestions, incent Sam to stop again on his way home or try new breakfast treats, and more.

Zero-party data collection allows you to collect meaningful customer data for advanced segmentation and next-best action tactics.

First-party data

This is information your brand collects through owned channels as your customers perform various interactions with your brand, also with consent. Data may include personal information, purchase history, shipping information, subscription status, discounts used, on-site browsing data, and loyalty program data. These details may be collected through loyalty programs, cookies on your company’s website, mobile applications, feedback mechanisms, SMS and email. This data provides valuable insights from analytics and user behaviors. For example, Beth signed up for her favorite workout apparel’s loyalty program, shared her birthday is April 6th, and consistently views bright-patterned leggings. She also redeems used earned rewards within a week of them becoming available.

Second-party data

This is basically another company’s first-party data that they sell to you. This data enables you to target and market to customers based on niche or specialized data attributes. It requires you to establish a relationship with another company and negotiate the terms for data exchange. For example, a credit card company partnering with an airline to target customers based on travel habits and preferences.

Third-party data

This data is collected by a third party such as a vendor or data aggregator and made available for you to purchase. It may also be accessed by running tracking ads with companies like Facebook and Instagram. This data isn’t necessarily accurate or timely, and may use collection processes that violate many global data protection regulations. Google, Apple and others have made changes to limit access to this type of data.

Ways to safely and ethically collect customer data

Loyalty programs

There’s no better means of extracting vital first-party data than through a loyalty program. Customers are more than willing to share their information with brands in exchange for personalized value, recognition, rewards and incentives. Rewards act as a stimulator, motivating customers to engage and share with your brand, provided you offer complete transparency about what data you’re accumulating and how you’re planning to use their information. Annex Cloud empowers brands to collect vital customer data through our SaaS-based loyalty solution, purpose-built for global enterprises while complying with global data protection laws.

Subscriptions

A simple subscription form can collect detailed customer personal and behavioral information in exchange for unique value, communications, offers and discounts. It’s important to be mindful of the data you’re requesting. If you ask for too many details during registration, it’s likely customers may be hesitant to share so much information and fail to complete the form.

Social media

Social media has become the official hub for information. There’s a great deal of data available on these platforms that can help you identify potential customers, analyze customers’ responses to specific campaigns, as well as study customer behavior, likes and preferences.

Transaction records

Transaction data can prove to be highly informative. It’ll have important details such as name, item(s) purchased, total order value, date and place of purchase, and other useful information. Keeping track of your transaction records can help you extract basic yet important information about your customers, as well as identify purchase trends and preferences.

Online marketing analysis

Your marketing campaigns can be a great means to collect customer data. You can also collect plenty of data from your website and mobile applications. There are several tools and platforms in the market that will help you extract and manage data easily and efficiently.

Preparing for proper data collection

Stay informed

Before you begin the data extraction and accumulation process, it’s important to be informed about the latest updates with regards to data privacy laws. Data protection is a serious matter and it’s critical that you source your data ethically in order to improve brand sustainability, as well as maintain customer trust and credibility in the market.

Determine what needs to be collected

Once you’ve identified your marketing objectives, it becomes fairly easy to know what data you need from customers. Strive to collect only what you need without being invasive and be clear on how the data will be used. It’s best to use a cumulative approach, creating on-going opportunities for customers to share bits of information at a time. It feels more like a conversation than an interrogation.

Ascertain the means of data collection

The next step is to determine how you intend to extract your data. Ideally, you’ll want to establish consent-based channels and interactions to collect zero- and first-party customer data due to its accuracy and authenticity. This may include website popups, surveys, polls, a mobile app, a loyalty program, social media quizzes and more.

Set a timeframe

Although data accumulation can be a continuous process, most marketers believe in setting timeframes for reviewing and analyzing customer data. Some data may be specific to an upcoming campaign, which typically has a start and end date. It’s also a good idea to build in timeframes for refreshing customer data, or asking them to update their profiles.

Rely on partners

Data collection, storage and management is a complex process and a huge undertaking. Take the time to evaluate the many readily available tools, technology platforms and agencies that specialize in data collection and management to ensure you have the bandwidth and capability to not only abide by today’s privacy rules and regulations but effectively gain insights from and act on the data you collect to deliver the value your customers’ expect and deserve.

Key tips to remember when using customer data

Request confirmation

Use simple tools like Geolocation to confirm your data. This not only simplifies the extraction process but also gives customers an option to either share or not share their information with you. This way you’re extracting information with your customers’ consent.

Collect only what you need

You need to be mindful of the customer data you’re collecting and shouldn’t scare away customers by asking too many questions. Stick to what you need and skip what may be nice to have but isn’t necessary.

Keep it clean

Sorting, segmenting and routinely discarding outdated data helps protect your customers and optimizes campaign results.

Back up often

According to a survey by StorageCraft, data loss is a common problem due to various reasons, such as hardware or system failure, human error, viruses and malware. Make sure your data is backed up on a frequent schedule.

Data privacy is top of mind for your customers, and should be for you, too. Learn more about all the aspects of security, data privacy and data management you need to know to gain and protect your customers’ trust. Talk with our experts to explore how you can truly know your customers and deliver better experiences while protecting your customers and building trust.