How to ethically acquire and use user data in 2024?

Audience data is one of the cornerstones of modern marketing, which is to be effective by reaching the right audience at the right time in the right place. However, in this case, the effectiveness of marketing often stands in opposition to the security of user data and the protection of privacy.How to reconcile these conflicting interests and how to acquire and use audience data in an ethical manner?

What is customer data in online marketing?

Customer data is information collected by businesses about their audience. It can include various types of information that help companies better understand the needs, preferences and behaviors of their target audience. This information is crucial for creating personalized offers and marketing campaigns, and for improving the overall customer experience. Data can be divided in various ways, one of which is how it is obtained:

• first-party data – are data collected directly by the company from its customers and provided voluntarily; thus, they come from interactions between the company and the recipients; these data include, for example. registration data (name, surname, e-mail), purchase history, data from contact forms, analytical data from tools such as Google Analytics 4 or Piwik and data from loyalty programs),
• second-party data – these are data shared by trusted business partners, usually under contract; usually companies that share data are in the same or related industry or have common customers; these include data from affiliate programs,
• third party data – this is information collected from a variety of sources and sold by third-party companies that combine them into rich data sets.

See what you need to know about moving away from third-party cookies

Data types in online marketing

What types of data can you acquire in marketing? The most important types of customer information are:

• Demographic data – this is basic information about your recipients, including, but not limited to, gender age, education, interests, income level, living and marital status, place of residence; it often also includes first name, last name and email address, which you can easily obtain, for example, through forms, newsletter sign-ups or when placing an order,
• behavioral data – this is information about user engagement and behavior online and on the site, and may include purchase history, brand interaction (how often a user interacts with the brand, in what channels and how, how they spend time on the site), browsing history on the site (what pages a user browses, what products they are interested in, what pages they leave the site from, etc.),
• psychographic data – this is information about the audience’s habits, habits and values, concerning, for example, interests, preferred forms of payment, contact with the brand, leisure activities, shopping habits, etc.,
• transactional data – pertaining to shopping habits and history at a particular store, frequency of purchases, retention rate, preferred payment and delivery methods.

How to collect customer data?

There are many ways to collect customer data without violating customer privacy and legal regulations. The most effective in this area will be the methods of collecting data yourself. How to collect data from customers in an ethical manner?

1. Build a marketing list

Your own newsletter with valuable information and tips is one of the most effective methods of getting data from customers who really want to provide that data. What’s more, you can promote your email marketing list in many different ways, such as

• offering additional value in exchange for subscribing to your newsletter (e.g., free e-book, discount on purchases, subscriber-only offers, informing subscribers first about news and promotions),
• adding the newsletter sign-up form to target pages,
• creating quizzes in which the user receives the result to the email address provided,
• creating a pop-up window with a special offer that appears when the user wants to leave the site,

2. Use surveys

How do you find out more about your customers and their needs? Ask them about it! You can do this with surveys, which are worth attaching to your order confirmation email or to your invoice or receipt. To increase the results, you can, for example, offer some sort of discount or freebie in exchange for sharing your opinion about the website or the ordering or fulfillment process. You can also survey your customers to learn about their preferences regarding, for example, marketing channels, preferred forms of payment and delivery, or the basis of their purchasing decisions.

3. Hold a contest

Whatever your goal, holding a contest is an excellent way to obtain valuable data about your recipients in an ethical and legal manner. To collect as much data as possible, you need to make sure the prize is attractive and that you advertise the contest through the channels where your customers are most active. You should promote the contest primarily on social media, but don’t forget about email and a banner on your website as well.

4. Use a lead management system

Not every recipient will become your customer, but leads, or potential customers, can also tell you a lot about the needs of your target audience. To stay up-to-date, invest in a lead management system (lead generation). This is a system that tracks the engagement of potential customers, identifies the channels from which leads come, and analyzes the recipients’ behavior toward your products or services (e.g., at what stage they abandon your offer). This method will also allow you to know the conversion path of a particular customer or after which customer’s contact with the brand a transaction occurs.

5. Offer a free downloadable resource

A free downloadable resource (aka lead magnet) encourages users to provide their information in exchange for receiving access to some resource not available to other recipients. The goal is to create a resource that is attractive enough to make a potential customer or client want to provide their data in exchange for your offer. While this is a popular tactic in the B2B world, it can also work very well for B2C companies. For example, a cleaning company could provide a downloadable spring cleaning checklist, or a dentist could provide a downloadable guide on how to brush your teeth with different types of toothbrushes. If you want to track the effectiveness of such activities, you can offer different resources and see which ones generate the most interest.

How to use customer data for marketing purposes?

You already know how to collect data in marketing in an effective way. However, what to do with them next and how to use them to support your brand’s promotional activities with the help of data?

Identify the right marketing channels

If you are not where your customers are, your marketing will never be effective. To be in the right place at the right time, you need to identify which marketing channels are most popular with your target audience. For example, if you know that the majority of your customers are Generation Z, you can assume that TikTok, Snapchat and Instagram will be important drivers of your business growth. If, on the other hand, a survey reveals that most of your current customers found your business on Google, you might consider focusing your marketing efforts on search ads and SEO to get more customers there. By collecting customer data, you can also identify new marketing channels worth adding to your existing strategy. Check out 8 performance marketing channels for your business

improve your marketing messages

When you understand how your customers interact with your company, what makes them buy from you and what their biggest concerns are, you can better refine your marketing messages This helps you personalize your marketing strategy to reach customers with the highest likelihood of buying. For example, after sending a survey to plumbing customers, you might have found that most of them value your quick response time to emergencies. You can then use this information in your ad text, on your website and in social media posts to influence potential new customers to call you or think of you when they have an emergency.

Personalize your marketing messages

Personalization has long been not just a nice-to-have in marketing but a necessity that customers simply expect. However, without access to data, personalization of content will not be possible. However, when you already have the data, what can you do to use it to personalize your communications?

• When people visit your store again, display on the homepage those products they previously viewed.
• Start remarketing campaigns, especially dynamic remarketing, that display to recipients the exact product they previously viewed in the store or added to their cart.
• Use email to remind users about products they have added to their shopping cart or products they may already be running out of—Allegro brilliantly uses this strategy.
• Enable personalized product recommendations on the store page and recommendations of related products.
• Display different banner ads depending on who is visiting the site, such as based on their previous visits or purchases.
• Offer special discounts or offers to regular customers based on their purchase history and level of engagement.
• If you have your own app, send personalized push notifications with offers, news or reminders based on user activity in the app.

How to ethically collect and use customer data in marketing?

The heavy emphasis on audience privacy and the (theoretical and slow) shift away from cookies in their current form requires entrepreneurs to be very careful when collecting data from audiences. How can they do it legally and with respect for privacy?

Always get explicit consent to transfer data

Gaining explicit consent from customers is a fundamental aspect of ethical data collection in marketing. This means that before any form of information collection begins, customers must be informed exactly what data will be collected, what purpose it will be used for, and the benefits of sharing that data The key element here is informed consent, which means that the customer understands and accepts the terms and conditions of their data processing.

Practical implementation of obtaining explicit consent begins with a clear and understandable message. Consent forms should be structured simply, avoiding complex legal language that could discourage or confuse. For example, instead of using general and vague statements such as “I agree to the processing of my personal data”, it is better to specify in detail what data is being collected and for what purpose, such as “I agree to the processing of my email address to receive monthly newsletters with promotional offers”. Also, place consent checkboxes on registration or subscription forms. It is important that these checkboxes are unchecked by default, which forces users to actively opt-in. The practice of unchecked checkboxes by default is inconsistent with the principle of obtaining informed consent and can be seen as misleading to customers.

Specify the purpose of data capture

To acquire data ethically, you must let users know what purpose you want to collect and use it for. All purposes must be communicated to users so they are fully aware of how their information is being processed, which in turn builds trust. Data collected should be relevant and limited to only what is directly needed to achieve the defined purposes in accordance with applicable data protection laws such as the RODO. In addition, organizations should regularly review their policies and adapt them to changing business or technological conditions to ensure ongoing compliance with privacy best practices.

Create a privacy policy

To ensure the privacy of your audience, create a privacy policy and publish it on your website. A privacy policy that outlines how you collect, use and store customer data is essential. Make sure you publish it on your website and include it every time customers provide their information or sign up for your email list. It is important that this document is easily accessible on your website and regularly updated in accordance with legal and technological changes.

Protect customer data

Companies must ensure that customers’ personal data is protected from unauthorized access, theft and loss. First and foremost, strong technical measures should be implemented, such as data encryption during transmission and storage. Regular software updates and the use of hacking detection systems are essential to protect against cyber attacks. Also, ensure that access to data is limited to only those who actually need it for customer service. Using authentication mechanisms, such as two-step verification, further enhances security. Regularly conduct security audits and tests to identify and fix potential security vulnerabilities.

Be transparent

Transparency in managing customers’ personal information is crucial to building and maintaining trust. However, how do you maintain it to earn the trust of your audience?

Transparency is the key.

• In case of a data security breach, natively send a message about the leak In the message, include the type of breach, the scope of data that may have been exposed, the time of the breach, the steps taken and recommendations for customers (e.g., changing passwords, monitoring bank accounts).
• Inform users about updates to the privacy policy. Specify the reason for the update (e.g., new regulations, new way of processing data), the type of changes, the effective date of the changes, and a link to the full version of the updated policy).
• Let customers know about potential data breach risks A proactive message should include: a description of the risk, actions taken and recommendations for customers.

Summary

In summary, ethical acquisition and use of user data in 2024 requires adherence to the principles of transparency, accountability and respect for individual privacy. Obtaining informed consent from users and informing them of the purposes of data collection and the ways in which the data will be processed is key. Organizations should also implement and adhere to strict data protection policies, conduct regular security audits, and ensure that users can easily access and control their personal data. In the interest of ethics, it is also essential to constantly adapt practices to changing regulations and public expectations.