Buying consumer data: Everything you need to know before you invest

Highlights

You’ll learn about the essential details and processes of buying consumer data.

• Define your goals: Identify what data type you need and why
• Choose trusted providers: Verify reputation, data quality and privacy compliance
• Evaluate data accuracy: Ensure freshness and relevance to avoid wasted efforts
• Adhere to data privacy: Adhere to GDPR and CCPA guidelines to maintain trust

Make informed decisions and elevate your marketing success. Start leveraging quality data today!

A strong part of modern marketing success relies on how well a business understands its customers. Every transaction, online search and interaction produces data that businesses can use to improve their strategies, tailor campaigns and increase sales. 

Businesses that use consumer data are 23x more successful at customer acquisition and 19x more profitable.

However, stricter privacy laws mean that getting customer data is no longer straightforward. Businesses must deal with the challenge of buying consumer data lists while maintaining trust and staying in line with privacy laws.

What is consumer data?

Consumer data is the information that businesses use to learn about the preferences, purchasing patterns and behaviors of their customers.

Businesses use consumer data to understand what consumers buy, how often and through what channels. This allows them to predict future needs, refine strategies and create personalized offers to drive sales.

Types of consumer data

Different types of consumer data provide different insights that shape marketing strategies:

• Demographic or identity data: This includes age, income, gender and education. Businesses use it to group customers and tailor messaging.
• Behavioral data: This includes brand interactions, purchase history and website activity. Businesses use it to understand customer needs and engagement.
• Psychographic data: Also known as attitudinal data. This includes lifestyles, opinions, values and interests. Brands use it to create messages that resonate with customers.
• Engagement data: These are the digital touchpoints created by individuals when they interact with a brand. Think of page views, clicks, reposts, user feedback, complaints, etc.

Benefits of buying customer data for marketing

Businesses get a competitive edge when they have access to proper data. Here are some ways it improves marketing results.

• Better audience targeting: Customer data buying improves targeting. It removes the guesswork, allowing you to reach high-intent groups with precise campaigns.
• Higher ROI: With consumer data lists, a brand can align its ad campaigns and marketing messages to the needs of the customers. This improves targeting, reduces wastage and leads to better marketing outcomes.
• Stronger marketing strategies: With proper consumer data buying, businesses can track patterns, predict trends and adjust campaigns based on real behavior.
• Proven success: With the right consumer data, retailers improve promotions and marketing outreach and brands tailor experiences to customer preferences.

Data-driven marketing performs better when you source consumer data the right way, which is the point of understanding how to buy customer data.

How to buy consumer data

To get the most out of consumer data, here is a step-by-step guide to buying:

1. Identify your data needs: Define your business goals. Determine whether you want to retain existing customers or get new ones. Next, decide which type of data best suits your strategy—behavioral, psychographic or demographic.
2. Research data providers: Some data sources offer broad datasets, while others provide verified, industry-specific data. Choose reputable providers with transparent sourcing and strong privacy compliance. 
3. Evaluate data quality: Check for completeness, accuracy and relevance before buying. How recent is the data? Is consent documented? Does it include geographic and behavioral gaps? Avoid datasets older than 30 days. Poor data weakens targeting and leads to ad spend wastage.
4. Data privacy and compliance: Always use legally sourced data to avoid potential issues like risks, fines and lawsuits resulting from non-compliance with data privacy regulations.
5. Integrate data: Integrate purchased data into your tech stack. Use tools like a real-time CDP to unify data and create clear customer profiles, then deploy the data to deliver personalized customer experiences.

Beyond buying customer data for marketing, the source of the data matters.

Where to buy consumer data

Businesses in need of consumer data have two main options: data marketplaces and direct data providers. Both come with their pros and cons. The industry, budget and your customization needs are factors that come into play.

Data marketplaces

Data marketplaces function as a single location to access data from multiple industries. They provide consumer data lists for different marketing needs and connect businesses with vendors. Popular marketplaces include Datarade, LiveRamp and Snowflake. They offer different pricing plans and licensing terms. However, data quality and compliance differ.

Pros and cons of data marketplaces

Marketplaces offer ease of access, but they also have drawbacks. Here are the pros and cons:

Pros:

• Businesses can browse and compare different data sets in one location.
• Since data is accessible across multiple industries, it can be applied to different marketing needs.
• There are many providers to choose from, which can lead to competitive pricing.

Cons:

• Vendors may offer outdated data. To avoid this, you must screen vendors before buying.
• It is more difficult to get customized insights as the data is often inflexible.
• It is difficult to comply with data safety laws since data is collected from different sources.

Direct data providers

Businesses with specific needs often choose direct data providers. These vendors collect and manage their data to ensure better accuracy and compliance.

Unlike marketplaces, they focus on industry-specific insights, offering relevant datasets that align with business goals. Direct providers offer higher-quality, first-party data but at a premium. The buying process takes longer since businesses must negotiate contracts and verify sources.

Pros and cons of direct data providers

Working with direct providers may offer more reliable data, but there are disadvantages:

Pros:

• Since these providers collect and manage their data, there is better control over quality.
• Businesses can get relevant consumer data aligned with their target market.
• They follow data privacy laws, reducing legal risks.

Cons:

• Custom data sets and premium-quality insights cost more.
• They offer a smaller selection of data, which may not cover all industries.
• You may need to verify sources, negotiate terms and ensure compliance before buying.

Choosing where to purchase data is just the first step. To avoid risks and wasted investments, businesses must vet sources.

What you should know before buying consumer data

Buying marketing data is an investment. One wrong choice may cost you time, money and credibility. To avoid this, consider these factors before making a purchase.

• Assess provider reputation: Always research the provider. Check reviews, case studies and testimonials. Reliable vendors have transparent practices, clear data sources and positive feedback.
• Request sample data for evaluation: Always request a sample before buying. Reputable providers offer one to check accuracy, relevance and freshness.
• Balance budget with data type and volume: While the goal is to get quality data, overspending may hurt your ROI. Focus on the right kind of data. Buy only what you need, and choose a provider with flexible pricing.
• Ensure secure data transfer: Data security is key when handling customer information. Choose providers with encrypted transfers and strong security standards. This reduces the risks of data breaches and ensures compliance with privacy laws.

You cannot discuss customer data without safety, privacy, consent and other regulatory compliance that comes with it.

Customer data legal and ethical best practices

Buying customer data comes with responsibilities. By adhering to legal and ethical practices, you protect your business and build consumer trust. Here are the best practices to keep in mind.

• Respect consumer trust: Use customer data based on what is permitted, and where required, seek consent before use.
• Make better use of data: You should not misuse customer data just because you have access to it. Ensure your marketing meets the target audience’s expectations.
• Follow data privacy laws: The CCPA and GDPR, for example, set stringent laws for data usage. Ensure you stay in line with such laws and other regulatory compliance requirements.

How to use customer data

Once you have the right data sources, you also need the right tools to manage them. This could be a CDP or data lake, depending on your business needs. Here are pointers on effective ways to use customer data.

• Segment audience: Break down consumer data lists based on habits, demographics or interests. This creates audience segments that you can target with tailored content and offers, product recommendations, etc.
• Tailor marketing campaigns: Tailor your marketing campaigns and ad content to specific customer segments. This will increase engagement and click-through rates.
• Improve customer acquisition: Use customer data insights to identify ideal customer profiles and target audiences. That way, you can attract high-quality leads, optimize your marketing budget and enhance business growth.
• Enhance customer experiences: Use data insights to deliver relevant and personalized experiences across all customer touchpoints. This keeps customers engaged, helps you build trust and leads to long-term loyalty.

While there is great value in using proper customer data, you want to avoid some missteps when buying it.

Case studies

Land O'Lakes

Land O’Lakes chose Contentstack’s real-time CDP to manage its data for better segmentation. This improved CTR by 29% and conversion rate by 38%.

Steve Rude said. "Impressions are the metric of a failed marketing campaign…If you’re not getting the conversions, it means you weren’t hitting the right audience. You may not reach a million people, but we’re going to reach the right people with the right message. And that’s where Lytics helps us."

Keep reading to see how Land O’Lakes increased CTR with a real-time CDP.

Industry Dive

Industry Dive could not profile its customers based on the data it was collecting. Hence, they opted for Contentstack's real-time CDP to address the issue, harmonize its data and deliver personalized experiences. This increases its customer engagement by 40%.

"Our editors really see the value of Lytics. They’re using it every day to shape their editorial content." Robin Re said.

Keep reading to see how Industry Dive enhanced customer profiling via a real-time CDP.

Common mistakes to avoid when buying consumer data

Even the best customer data will not deliver results if common mistakes are made during the buying process. Here are common mistakes to avoid.

• Choosing providers that do not follow data protection laws
• Overlooking data segmentation options
• Failing to validate data quality before purchasing

FAQs

What is the consumer data?

Consumer data is the information collected from individuals who interact with a brand’s product or service. It can be used for market research, personalization and targeted advertising. 

Can customer data be sold?

Yes, but only if it follows ethical procedures and aligns with data privacy laws. Businesses must get consent and make sure they share data legally.

What are the four types of customer data?

The four types of customer data are identity data, behavioral data, attitudinal data and engagement data.

How much is my customer data worth?

Customer data's value depends on accuracy, relevance and demand. Well-organized, high-quality data that improves targeting is worth more.

Learn more

Buying customer data can help businesses reach the right audiences and improve marketing efforts. However, you must choose trusted data sources that adhere to data privacy and safety regulations.

Using the data better—organizing it, tailoring messages and tracking results—are all effective ways to improve customer engagement and increase sales.

A customer data platform (CDP) allows you to make sense of the data. By profiling your customers, you can create relevant experiences and build strong relationships. Talk to us today to get started with a real-time CDP.