The incredible power of customer data cannot be overstated. When brands are able to tap into insights to better understand customers' experiences, they're able to deliver on the promise of customer-centricity, and see gains in key business outcomes like customer engagement, lifetime value, profitability, retention, and growth.

And it's not just us saying so. Customer-centric businesses are 60% more profitable than the competition and companies serving up superior customer experiences generate nearly 6X the revenue of competitors with sub-par experiences, according to Forbes.

Here's everything marketers need to know about customer data—how to get started collecting it, what's important to collect, how to use it and, ultimately, how to respect individual customer privacy.

#1: How to get started collecting customer information

In many cases, “data” means different things across different teams, departments, and organizations. That's why an important first step when beginning to collect customer data is aligning on an internal data collection strategy for your company. While your data strategy will ultimately be tailored to your brand and your customers' needs, there are some basic steps every company can take to get started in a thoughtful manner.

Data Collection 101

Step 1: Identify your marketing goals

Step 2: Identify the custom user data needed to support your efforts

Step 3: Collect only information that

• Is accurate and up to date

• Will be put to use

• Will have a meaningful impact on your customer engagement

• Is compliant with data privacy regulations

Step 4: Make sure the data you collect

• Gets updated (in real time)

• Gets centralized across systems in one location to power live customer profiles

• Can be updated directly by customers with a preference center

#2: What customer data is important to collect

While every company's needs will vary, at a high level, here are the three main kinds of customer data brands collect:

#3: How to use customer data as part of your customer engagement

For many brands, the challenge isn't necessarily what information to collect, but what to do with it. That's why per some estimates, more than half of the customer data that gets acquired sits unused.

With batch and blast (and spray and pray) marketing having shown to be ineffective, not to mention off putting, instead of aiming for mass appeal, savvy brands—from Burger King and Overstock to Canva to IBM—put their customer data to work to serve up marketing that's truly personalized at the 1:1 level using the following tools and technologies:

• Live customer profiles: Tie in key customer data from all of your company's data sources (point of sales, website, app, email, SMS, and more) and keep the information updated in real time.

• Dynamic segmentation: Static customer lists are out, and real-time user groups based on in-the moment behavior and interests are in.

• Connected Content: Send dynamically updated emails, push notifications, in-app and in-browser messaging, SMS, and more with the most up-to-date information and recommendations for each individual recipient.

#4: How to respect customer privacy

Between the EU’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and Apple’s recent focus on privacy with iOS15, it's crucial for brands to have a strategy in place for adhering to customer data privacy standards.

At a regulatory level, that means being compliant with GDPR, CCPA, HIPAA, and whatever new regulations come along. At a human level, that means following basic customer-centric data do's and don'ts:

1) DO...make it clear why you’re asking customers for their information. Explain how collecting and storing the details you’re asking for will benefit them and improve their customer experience.

2) DON'T...be creepy. Use your best judgment about how you put customer data to use. The day someone turns 65, it's probably best to send them a friendly "Happy Birthday" greeting or a retirement-planning guide, rather than, say, a guide to estate planning.

3) DO...ask for information at the right time. Establish an onboarding process that gathers information over time, continually communicating the value of each new request and asking only when the request is logical. No one likes sharing information before they know the value of doing so.

4) DO...offer a preference center. This can be a web page or app section where customers can adjust their opt-ins and otherwise manage their experience. Customers should have the freedom to personalize their preferences and tell you what they actually want to hear about (and how often).

Is Your Tech Stack Holding You Back?

The best laid data collection and customer data strategies can be foiled by technology—when systems don't speak to each other and share key customer details in real time. Get our guide to today’s marketing tech stacks and data ecosystems and learn how real-time, streaming data can help you eliminate silos in your MarTech stack and enable more effective cross-channel customer engagement.