How do you use data to generate loyal relationships? Michael Kustreba says It all boils down to relationship lessons life has already taught you.

It takes more than a handful of interactions to build strong relationships in life. We’re constantly taking in new information to establish and strengthen our connections. Creating this type of relationship requires responsive and relevant communications – all developed with the right data.

Meaningful data is needed to sort out what intelligence about your target customer is the most valuable. With such insight, you can engage customers in the right channel, with the right message, and at the right time to achieve relevance.

Getting the right data

Any time you decide to connect with another person, you start to collect data. You learn more details about them or perhaps, talk to others who know them to get a better idea of their background, personality and interests. Everything you discover becomes another data point that helps you understand that person more, and with each additional piece of information comes the opportunity to build a stronger bond.

You also intrinsically know, however, that not all data is created equal. You have to determine what data is most meaningful and then figure out how to create value with that information and take action. By pulling in data from a variety of different sources, you have the power to create the foundation for true brand loyalty for your customers. For marketers, this means pulling the best information from the four types of data: big data, third-party, transactional and small data.

1. Distilling big data

One common mistake you may face is the big data trap – collecting so much information that you become overwhelmed. Big data is often referred to as the ‘new oil’ that is driving the global economy. But long before oil became valuable, someone had to figure out what to do with it. Don’t collect data for the sake of collecting data, or because big data is all the buzz. You have to begin with an end in mind. Unless you have a destination in sight, you could just be collecting noise.

2. Managing transactional data

Too often, program managers fail to look beyond their own transactional data. Capturing data from the goods and services you sell is an important first step, but how much does that really tell you about a customer? Don’t focus solely on current customer behaviours, but instead utilise the other forms of data to complete a 360-degree view of the customer. This drives insight into customers’ preferences and behaviours, allowing retailers to establish relevant, targeted communications with those customers. Without relevance, you’ll never be able to generate value for – or loyalty from – your customers.

3. Tapping into third-party data

One of the best ways to start developing a holistic view of your customer is by collecting third-party data. Third-party data helps fill in the gaps. It can help you determine who is a bargain shopper versus who is a high-end shopper, which customers are more likely to respond to texts rather than emails, or even those that are in the market for a specific purchase. This deeper level of analysis can help define a much smaller, more tightly focused list of potential customers around which you can tailor highly personalised and increasingly relevant marketing messages.

4. Mining for gold with small data

The devil is in the detail, and that’s true with loyalty programs. Sometimes, the most valuable insight can only come from personal interactions with customers. This small data can be used to personalise every customer interaction, creating a reassuring link every step of the way. Authentic loyalty is about building a long-term relationship, and this is where many programs fail. Some companies are so focused on their own brands that they assume all customers think just like they do. To develop deep relationships, you must focus on your customers and their wants and needs.

The right data can help you identify what is truly important to each of your customers and allow you to develop a collaborative relationship based on each individual’s core values. By using carefully constructed, rules-based interaction models, you will then have the ability to not only fulfil customers’ immediate needs, but also anticipate their future desires and generate long-lasting loyalty.