Why Do Companies Need Your Data?

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Everyone is talking about data and the various issues surrounding data collection in recent times, but it is not always clear exactly why data is such a big deal and why it is so valuable to companies. With this in mind, here is all that you need to know about data collection, why it is so useful for businesses and the importance of protecting this data.

Types of Data Collected

Typically, there are a few different types of data that a business will collect and for a few different reasons. These include:

Personal data: Name, age, gender, location, and non-personally identifiable information, including IP address, web browser cookies and device IDs.

Engagement data: How a consumer interacts with websites, apps, social media posts, paid ads, emails etc.

Behavioural data: Transactional details including purchase histories, mouse movement information and product usage information (repeated actions etc).

Attitudinal data: product desirability, purchase criteria, customer satisfaction etc.

How Do Businesses Use Data?

Collecting the above types of data can be incredibly useful for businesses and help them to identify patterns, trends and behaviours which will help them to improve and, in turn, make their customers happy. This can take the risk out of strategic decisions and help them to compete at a higher level. A few of the key ways that businesses use data include:

  • To improve the customer experience
  • To refine their marketing strategy
  • Finding new customers
  • Increasing customer retention
  • Tracking social media interaction
  • Predicting sales trends

Data Protection

Many consumers worry about businesses collecting their data and what it means. While it is certainly understandable that people are cautious about businesses collecting personal and potentially sensitive data, it is worth keeping in mind that this is often used to help improve the customer experience. Additionally, rules and regulations are implemented to protect this data which businesses must follow.

Of course, cybercrime is on the rise and a data protection breach can occur even if a business has stringent measures in place which is why it is so important for businesses to make cybersecurity a priority and keep their defences up to date against the latest threats. A data protection breach can lead to identity theft and cause significant financial damage which can take a long time to overturn. If a data breach ever occurs, a consumer can take action and make a claim against the company that was trusted with the data.

Everyone is talking about data in today’s day and age and it certainly plays a big role in many parts of life. Businesses will collect many different types of data as it can be incredibly useful for making intelligent strategic decisions to boost the business and customer experience, but businesses must also take great care to protect this data particularly in a time where cybercrime is on the rise.

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