Using User Data Diligently

Recently, an online bookstore alerted me via email that a favorite author’s book had just been published. I thought to myself, “You know, that’s nice. I gave the site some information awhile back, and now that information is actually helping me.”

The bookstore collected data on me (my favorite author) and may benefit from it (I’ll likely buy my favorite author’s book from that bookstore) but only because it’s using the data I initially provided to benefit me. Using data for the user’s benefit often prompts users to buy, read, and click more on our sites.

Data can be great to have, but once you’ve got it, the burden really falls on you to use it to its full benefit, that is, not only using it for your benefit, but for the the user’s benefit as well. Below are my rules of thumb for dealing with data.

Have a clear privacy policy. Storing user data has its special responsibilities and privileges. You must have a clear, easily accessible privacy policy and follow it to the letter. You must practice discretion and employ stringent security methods.

Provide value in exchange for data. There are few things more annoying than filling out one form after another, only to realize you’re getting nothing in return except for some “targeted” ads. While we sometimes need demographic data to sell our ads, we should always try to give something back to the user in exchange for his or her data, like targeted news, special service, informational emails, or streamlined ordering. I have no problem filling out fields when I know I’m getting some return on my divulging. You must continually provide topnotch personal service in exchange for that data. Remember, it’s individual data that allows you to evaluate, improve, and personalize the user experience.

Use data wisely. If you’ve got detailed behavioral, demographic, and purchase data, and you’ve been able to segment your user population into distinct groups, then you’ve got some very powerful information. Fight the urge to immediately send targeted emails. Instead, think about how you could use your knowledge to improve your site. Do you have a large population of business travelers in your user population? Maybe you could make the portion of the site that they use most accessible via wireless devices. Do a lot of small-business owners buy from you? You could make end-of-year reports available to them for tax season. Once you’ve used the information you collected to help them, they’re likely to be much more receptive to your targeted emails, which can then include information that will be useful to them. See the pattern?

Data can be very helpful in driving revenue, but keep in mind that you can also use it to help improve your site. Use data to understand who’s using your site and to make changes accordingly. While user testing can help with this, analysis of user data can reveal interesting patterns in site usage you might otherwise not get any other way. You can use it to decide which sections of your site need fixing, which need more attention, and which need to be removed.

Data is great to have. We can brag all day to investors, partners, and analysts about how much we have or how detailed it is. However, if we actually use it diligently to make the user experience better, then we’ll really have something to brag about — lots of happy users getting exactly what they want.

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