written by Paola Alunni (Editor Manager at ByTek)
Getting to know your user in order to offer highly customized solutions: in web marketing, data collection is essential to study strategies more and more aligned with customer’s interests. There are many tools available to marketers that helps them to collect personal data for user profiling. Among these, the most valuable ones mainly concern users with a high propensity to buy, those who can become loyal customers and excellent promoters of products and services already used.
However, European privacy regulations have established some limits on the collection and automated data processing. So, let’s first see what a profiling activity consists of, what activities are allowed especially on users with a high propensity and what are the useful tools.
What user profiling means
The term profiling indicates the set of data collection and analysis activities concerning users. Profiling has as its main purpose the clustering and segmentation of customers according to their habits, their behavior, other demographic characteristics and every information that can help define a strategy that is as personalized as possible.
User profiling and Privacy
The European Regulation on the protection of personal data defines profiling as “any form of automated processing of personal data consisting in the use of these to evaluate certain personal aspects relating to the natural person, in particular to analyze or predict aspects concerning professional performance, the economic situation, health, personal references, interests, reliability, behavior, location or travel of said natural person “.
The European legislator has focused on the fully automated decision-making process, establishing a general prohibition in the event that this:
- produces legal effects.
- significantly affects the person.
Exceptions to the prohibition are allowed (and therefore the user can be profiled) if the treatment:
- it is necessary for the conclusion of a contract (with the exclusion of health data).
- It is authorized by law or regulation.
- There is an explicit consent to the processing.
To further clarify the limits and boundaries of profiling activity, in 2018 the European Commission published the Guidelines of the European Guarantors on the automated decision-making process relating to physical persons, establishing:
- the level of detail of the profile.
- the effects of profiling on the user.
- the adoption of all security measures to ensure fairness and non-discrimination.
- the possibility for the user to oppose the automated profiling processing at any time.
Phases of the profiling activity
In web marketing today, user profiling is carried out only through consent to data processing.
When a user responds to an online ad and fills out a form with their data, consenting to the processing of their data in order to be contacted, a lead is being generated. That is, through a marketing initiative, a company obtains useful information from the user by establishing a commercial contact.
There are two initial steps:
- prospect: the user, after the first contact, expresses interest in the product and it is identified as a potential buyer.
- lead: the user is a potential customer because he has shown interest in the proposal and he has left his data (telephone number, e-mail, etc.) showing his consent to receive commercial information. At this point, the company, having permissioned marketing available, can start a personalized communication for a targeted offer.
Lead generation campaigns are precisely all those activities aimed at acquiring qualified contacts, collecting precious data that will allow us to study increasingly specific and targeted proposals that could lead to a high number of conversions. To collect this data, search advertising, email marketing, social media marketing and many other activities can be used. The fundamental question is, at this point, how to analyze this huge amount of data and how to use them.
There are two phases that must be started immediately after the lead generation, which are: lead qualification and lead nurturing.
Thanks to lead qualification, the company classifies the data collected during the previous phase to focus efforts on the users most interested in the proposal.
Thanks to lead nurturing, communication between the company and the user is further intensified for the purpose of converting it into a full-fledged customer. Hot Leads are users who demonstrate a high propensity to buy.
The path to purchase, i.e. the path that the consumer takes from his initial interest in purchasing, is illustrated in marketing through a funnel (purchase funnel or marketing funnel) consisting of 5 phases:
- awareness – the user becomes aware of a product or service.
- familiarity – the user recognizes the product and begins to consider it “familiar” (because he has collected information, read reviews, etc.).
- consideration – the user begins to compare quality and prices.
- purchase – the user purchases.
- loyalty – after the purchase, the user uses and verifies the product.
It is clear that the fifth and last phase is fundamental, because it establishes the loyalty of the user who is now a customer who, if satisfied, not only is inclines to buy back, but he will spontaneously advertise the product as well.
User profiling and useful tools
Marketers must be primarly focused on hot leads. Knowing how to “recognize” them and offer them personalized experiences is essential to meet their needs and retain them. For this purpose, segmentation systems based on Artificial Intelligence algorithms are needed since they allow the most important data to be extrapolated with extreme precision and speed.
Companies that currently make use of innovative profiling technologies are able to offer increasingly personalized and therefore highly satisfying products in relation with customer experience. Marketers who are able to exploit the potential of proprietary data (first-party data) collected through profiling activities can now acquire competitive advanced and really put the customer at the center of the shopping experience.
DataLysm is the customer data platform based on first-party data that not only analyzes but predicts behaviors, allowing increasingly effective marketing actions. Collecting, analyzing and integrating thanks to the algorithm, allows you to have a complete view of customers, meeting their very needs.