Customer data becomes the turf for companies' competitive advantage

Corporations are using customer data to gain a competitive edge in the market, but new analytics technologies pose privacy downsides.

Today, intelligence about customers can seal the deal. Thanks to the age of the customer, consumers have more power in their transactions, and companies can lay claim to only razor-thin competitive margins. So sales and marketing intelligence has become the turf on which companies are fighting for supremacy.

To gather that intelligence, companies need accurate, real-time data on customer preferences and behaviors -- and they need to be able to link that information with existing data in financial systems, customer databases, Web content management systems and more. If that sounds hard, it is. Most companies' application landscape is rife with data silos and legacy software.

First, consider how some companies are using marketing automation software and customer personalization techniques to better target customers. By linking website visitors' behavior with email marketing, companies are trying to upsell and cross-sell their products in real time. Still, the majority are still struggling to put two and two together.

Most companies' application landscape is rife with data silos and legacy software.

Next, we look at how companies are using new devices like iBeacons to communicate with and sell to customers through mobile devices. Companies have become deft in using these new tools to target special offers to customers and engage them in ongoing relationships -- and even bring them back to physical stores through digital communication. But just as Beacons offer companies a better view into customers' digital personas, they can also present privacy concerns.

New data analytics and data visualization tools have also made the business of gaining insight more democratic. Today, analytics are no longer the sole province of statisticians and other scientist types. Instead, tools are emerging that enable executives to get a bird's eye view or zero in on problems with just a few swipes on a tablet. And they are also giving sales people a view into their customers on the go, and before those ever-important client meetings.

But great data brings great responsibility. Companies need to target customers carefully rather than barrage them with offers or pretend to know them. They also need to be careful stewards of data and give consumers the opportunity to opt out of these approaches at any time. Using this data responsibly poses a double-edged sword for companies.

While new technologies like geolocation and marketing personalization offer a chance to gain customer insight, companies don't always demonstrate care in how they use this data. In 2012, Target successfully marketed to a pregnant teen based on data that suggested she was pregnant -- unbeknownst to her father. So companies have to balance insight with responsible use of that knowledge.

Finally, new marketing automation tools are helping marketing departments become more effective, and are helping sales by taking more responsibility for closing the deal alongside sales teams. Steve Robins has written recently on how sales departments can use these new tools to be more effective. It means more cooperation between departments, but also more sales and better data.

Next Steps

If you think you know your customers, you might be wrong

How can you make data actionable?

Is your Web strategy on target?

Can data mashup tools help your business intelligence analytics efforts take flight?

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