January 6, 2014

Unprotected Customer Data Can Hurt More Than Just Your Customers

In reflecting on the recent loss of payment card data for over 40 million Target customers in the holiday season, I can’t help but think not only about how terrifying it is for the individual customer who’s credit card information might be sold on the black market, but also how catastrophically this can affect a company’s customer relationship database. 

Collecting, analyzing, and employing customer data is vital in today’s marketing campaigns.  Customers are coming to expect more personalized marketing and sales efforts.  Due to the ability to obtain big datasets on customers’ preferences, companies are able to do things like use purchase history to predict future spending.  This allows marketers to target relevant products and promotions to individuals.  Consumers  benefit from analytics-backed targeted marketing by receiving only relevant ads. Consumers no longer have to sift through all available products; instead, they find just what they are looking for when they open their inbox.

Targeted marketing from predictive analytics thus benefits both marketers and customers, allowing both to more efficiently use their time and resources.  Of course, there is a down-side to using customer data analytics.  The downside is the risk associated with using customer data in this way.  It is risky because companies must store their own customer data in a way that is easily accessible to marketers. Though the benefits generally outweigh the risks, marketers must be aware of the risk assumed both by their customers and their marketing operations.

Keeping customer data secure is an important priority for most companies, as it should be, because they need customer trust to create loyalty.  This is a valid reason, but losing customer data can have negative effects on all parts of the business. Once personal data is compromised, security measures might require a company to abandon their entire database or lose the purchase history for the individuals whose information is compromised.  This data can play a vital role in forecasting, budgeting, and purchasing merchandise for upcoming seasons.

Make sure that database security is a top priority for your customers and for all of the departments in your company that rely on customer data analytics to function.

 

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