How to Quantify the Value of Customer Data
The Value of Customer Data: How Much Could It Be Worth?
In today’s data-driven world, where information is power, an organization’s most valuable asset is its customer data. From purchasing patterns to personal preferences, customer data holds a wealth of insights that can shape strategic decisions, drive revenue growth, and foster unparalleled customer experiences. But can you put a quantifiable value on your customer data? Yes, you can. And if you can put a value on it, then it’s critical you invest in the processes and technologies needed to protect it.
Let’s explore the different ways you can quantify the value of your customer data and how to best secure it (and how Treasure Data is primed to help).
Uncovering the Value of Customer Data
Customer data is a valuable asset to any business. It helps us better understand customer preferences, behaviors, and purchasing patterns. It’s used to create insights that improve processes, increase efficiency, and drive revenue.
It also helps build relationships with customers, obtain feedback and insights from them, as well as understand their interests and preferences. And it’s used to develop new products and services based on customer needs and wants.
If we understand how customer data is used, why do so many struggle to define how much their data is really worth?
How to Quantify the Value of Customer Data
Quantifying the value of customer data isn’t as straightforward as quantifying the value of a building or a piece of property. However, taking the time and effort to do it can provide invaluable insights into how best to utilize it.
Here are a few ways you can quantify the value of your customer data:
Revenue Generated: Look at factors such as customer lifetime value (CLV), average purchase value, purchase frequency, and the likelihood of cross-selling or upselling, which all require different types of customer data to determine the revenue you generate or could generate from your customers.
Customer Acquisition Cost (CAC): Acquiring new customers can be costly, especially if you are starting from a blank slate. But if you examine existing customer data and use it to improve targeting or to create personalized experiences, your acquisition costs should decrease. If customer data helps reduce CAC, its value increases.
Increased Sales Through Customer Care: The more you know about your customers, the better customer care you can provide them and the greater opportunity not only for that customer to stay but to cross-sell or upsell. This won’t work, however, if you aren’t sharing your customer data across all your channels and departments.
Market Research and Insights: Customer data can provide valuable insights into customer behavior, preferences, and market trends. These insights can guide strategic decisions, product development, and marketing campaigns, leading to better ROI.
Many other use cases for customer data help you quantify its value, including using data to understand market share growth and identifying potential risks that could result in millions of dollars lost for your company.
There are formulas that help you identify how much a particular customer or segment of customers is worth to your company, like customer lifetime value (CLV), retention rate, customer acquisition costs, and others. What we tend to ignore is that without accurate customer data, we can’t build those formulas, and without those formulas, we can’t make the best decisions for our company.
If You Can Value Customer Data, Then You Must Protect It
By now, you understand that customer data is a valuable asset for your business, one that you can quantify. And if it’s valuable, then it’s critical that you protect it with a robust data security strategy.
A recent study by Cisco on Consumer Privacy found that 81% of consumers think that how a company treats private personal information strongly indicates how it views and respects customers. In addition, 82% said data security is a “buying factor” for them.
There are two aspects to protecting your customer data: data privacy and data security. Both are necessary. Data privacy focuses on how you collect, use, and share customer data, with a strong focus on trust and transparency. It’s the part your customer can see. But underpinning your privacy strategy is a security infrastructure that works to keep your data safe from internal and external threats.
A data security strategy covers access and permissions, audits, tracking and reporting activities, how data is stored and secured, and continually updating data policies (because things can change quickly).
How Treasure Data Protects Your Customer Data
By taking the necessary steps to protect their customer data, businesses can ensure that they remain compliant with industry regulations while avoiding costly fines associated with mishandling personal information. Treasure Data understands this, which is why they employ a multi-layered security approach to protect customer information. This includes physical, logical, and administrative safeguards to ensure data remains secure at all times.
It also includes compliance with a number of industry security standards, such as SOC2 Type 2, SOC 3, HIPAA, FISC, ISO/IEC 27001, and others.
In addition, Treasure Data implements the following platform features to secure customers’ personally identifiable data:
- Hashing data
- Encryption of data both in transit and at rest
- API authentication keys managed by customers are that needed to access data through REST APIs
Treasure Data also performs penetration testing against web applications, API endpoints, and in-scope external networks and has a robust security and monitoring service that ensures high responsiveness to any issues or alerts.
Find the Value in Your Customer Data
Customer data is the key to unlocking insights, driving revenue growth, and fostering great customer experiences. By understanding the various ways to quantify its value, we gain a deeper appreciation for its strategic advantage.
Once we truly understand its value, it’s easy to understand how important it is to secure that data in every way possible. Not only to adhere to regulations, but if we can’t assure customers that their data is secure, they won’t share it with us. And without it, we can’t make informed decisions that drive customer acquisition, retention, and overall company success.
You can learn more about Treasure Data’s approach to data security by visiting the Treasure Data Trust & Security Center.
To learn more about the ways you can use Treasure Data’s customer data platform to apply data privacy principles, download our white paper today. Want to learn more? Request a demo, call 1.866.899.5386, or contact us for more information.