Modern businesses essentially thrive on data that is generated by consumers. Most of the alternative data is user-based giving business owners a fair idea of the reactions of consumers towards various products, services, and even marketing strategies.
Alternative data is third-party free financial information that provides useful insights for making investments. The usual data collected is from conventional sources like SEC filings and press releases or other information gained from official websites. Alternative data, on the other hand, is obtained from financial transactions, satellites as well as reliable internet resources.
The internet can provide a wealth of information on user data. From surveys to questionnaires to simple reviews filled on casual websites, consumers are constantly giving out data about various products, services provided. All this information needs to be compiled and analyzed. The final result from all that compiled information is alternative data that companies are left with. In the case of qualitative data, as a further step, sentimental analysis is done to understand the tone of all those reviews and opinions about various businesses.
How do companies use this data?
Since alternative data is obtained on an annual basis for most companies, there is usually a lot of data to compile. What do companies do with all this data once they get hold of it? The main purpose of gathering the data is to develop strategies for promotion and marketing. Once companies have the data describing consumer reactions, suggestions, and preferences, the task is taken over by the marketing team. It is then time to design promotions in a way that will ensure maximum sales of their products or services. Marketing strategies include banners, posters, advertisements in audio-visual, as well as print media. For example, if demographic research concludes that a certain product does better in one specific city, then it will be marketed more using billboards and other eye-catching techniques in that area. In this way, the majority of the planning and strategizing depends on alternative data obtained from the internet.
How alternative data is used for product marketing?
- Building a brand image
Product marketing is an ongoing process. Right from the birth of a company, the focus is always on marketing their products to ensure optimum sales. A simple example is how retail websites offer similar products for you to purchase showing that people often purchase certain products together. This creates urgency and thus markets the other products along with something that you intentionally wanted to buy. When a company encourages people to click selfies and create hashtags of their brand on Instagram, it is creating an online community that will lead to more recognition and sales of that particular product or service. In this way, the alternative data makes way for business growth opportunities and companies make the best of the knowledge about consumer opinions of the services. These strategies help to strengthen the image of a brand in the mind of consumers. As you consume social media and come across these hashtags or selfies of the product brand, you are reinforced to go and buy it for yourself. This helps in increasing the ales automatically. Marketing strategies are all about imprinting on your mind so you are conditioned to buy from the company.
- Competitive analysis and consumer sentiment
Alternative data also helps to understand competition in the field. It gives insight into rival companies that may hinder the growth of a business. Using alternative data, businesses can weigh their profit margin and cater to different areas accordingly. It also helps to understand consumer sentiment. After designing marketing strategies, it is necessary to see how consumers are reacting to them. If it isn’t getting a positive response, then it needs to be modified, or else it can be continued.
- Getting personal with consumers
To get the most of customer habits and preferences, it is essential to communicate with them as if you have an acquaintance. Alternative data helps in this purpose too. By tracking consumer purchases, AI gets an idea about your choices and will suggest your products accordingly. This creates a personalized experience for customers, and they tend to look at the company as a reliable option.
Alternative data is the foundation to understanding the one factor that makes or breaks a business – customers. If used well, it can help with optimum growth and success and make a brand reach the top of the market.