Data acquisition today is a crucial factor for any industry sector to flourish, especially so for the financial services sector. Data and analytics, therefore, play a critical role in this, and management of data therefore becomes increasingly important. And the availability of data is also a major factor in acquiring customers. It is not just about defining the target group, but about making the target group paying customers.
There are various methods of customer acquisition. These depend on the relationship between the service provider and the customer. For example, there are cold calling, warm calling, mailing and emailing campaigns, online marketing, passive customer acquisition, referral marketing, affiliate marketing, personal contacts, promotions, and whatnot. It is often advised that one should not use just one method for acquiring customers. Instead, a healthy mix is more promising. There have to be few select methods, suitable for the services/products on offer and the target group and once certain methods have proven themselves and the system has a fair amount of success, those methods should be incrementally optimized.
Data acquisition trends are different for different mediums and often there are multiple levels of strategy, says Rachit Chawla, CEO & Founder, Finway Capital. “For example, there is ‘cold calling’. This requires a string of call centers, but these are too expensive and are not considered the right way of acquiring data. There are other data acquisition strategies as well, like ‘full strategy’. In these strategies, like-minded people, who are looking for your services, enter their details and the same gets converted and gets acquired. The trend in this perspective is that costs are getting higher and more expensive whereas, in the other perspectives, the cost is lowering because there is not much demand for cold calling data as the data has been there for a while. Moreover, there are costs being incurred in terms of customer data acquisition when the call center support team converts them into hardcore sales. So, there is a reverse trend which is going on right now. In terms of the pull strategy, the cost of acquisition is increasing and in terms of a push strategy, or maybe a cold calling strategy, the cost is continuously going down,” he says.
Everyone in today’s digital world is clear that data acquisition, storage, and efficient usage are key for a successful business, points out Rahul Chopra, Chief Digital Officer, Clix Capital. He reiterates that cost of data acquisition has gone down over the years. However, an important factor, according to him, is not just acquiring data, but rather knowing what to collect and then making systematic and efficient use of that data for strategic business initiatives. “Data is cheap to acquire, but the information is still and will always be very expensive,” he says.
NO ONE SIZE FITS ALL
While in general data is now widely available and can even be free in some cases, certain kinds of data can be expensive and difficult to obtain. This will depend on the sort of data that is required. Rahul Bhargava, CTO and Product Head, InCred, explains: “If the acquisition involves a bidding process, the whole exercise could get expensive pretty fast. If you wish to acquire the data from the audience profile of someone on Facebook, the active and competitive bidding makes it pricier. Therefore, it depends on who is requesting it and whether it is in real-time.”
He says if someone wishes to gather data on the users of an app, they can do so from the app on the user’s phone, or go through several vendors, after receiving the customers’ consent. “For example, bureau reports are available for Rs 7 to Rs 25. Therefore, based on the type of data required and the bidding process, the prices vary,” he says.
DRILLING DATA COSTLY
Prashant Deshpande, CISO, Shriram Transport Finance, stresses that as the saying goes data is the new oil, and just like getting oil, one needs to drill to extract proper, clean, and usable data. He says there is no one-size-fits-all here as each company – even the same industry – operates as per its distinct focus area.
“There is no cheaper or expensive way to get data, but we only believe in doing it the right way at our organization,” he maintains.
He goes on to add: “We acquire data in multiple ways on a regular basis. One of the most effective ways is through the existing customer base as they share the benefits with their peers based on the financial support and service that we have provided. We identify the areas where our potential customers could be through our strong on-field executives and well-connected channels across urban, semi-urban, and rural geographies. As part of our agile strategy, we do regular campaigns by selective targeting of customers based on their spending trends and requirements and come up with customer-centric schemes.”
Shriram Group, Prashant says, has many companies and the pool of data gathered as per statutory norms helps in serving the diverse needs of customers that reach the group’s industry-leading touchpoints, thereby providing more cross-sell opportunities. “All this is made possible by our robust technology framework that has been designed and built like a need-based ‘data mart’. We refine our technology back-end on a continuous basis and do multiple iterations regularly to get quality data,” he says.
VARIED DATA REQUIRED
Dr. Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance, argues that insurers especially have to rely more on diverse data to design and price their products to remain competitive in the market. “The need of related data is a pre-requisite for all. More data is needed at a personal level (like daily commuting routes, health parameters, driving patterns, and geographical presence) and is relatively limited under the current circumstances in the Indian context. Data is also needed to design products intended to address larger audiences like the rainfall, reservoir levels, and irrigation coverages in a specific period and geographical areas in order to price crop and weather-related products. The costs are usually proportionate to the data sets captured /available in each category, quality, and accuracy,” he elaborates.
How expensive or how cheap it is to acquire different types of data?
Rachit Chawla of Finway Capital says HNI data is very expensive to acquire whereas SME or middle-class data is cheaper. “However, there is still a lot of confusion in terms of the data set being activated. And that’s the reason why companies like Finway Capital invest heavily in terms of data and in terms of storage so that over a period of time, we have enough data and we are not dependent on a third party,” he says.
Nilesh Sangoi, Chief Digital Officer and Head – Data Analytics, Fincare Small Finance Bank, says data acquisition processes are today augmented by the ever-growing internet speeds, seamless integration of data with the systems and processes, adoption of technologies like IoT, and effective controls. “These trends have been instrumental in driving the demand for data acquisition. One of the examples of data acquired by us is credit bureau related data. Over time, there are multiple choices available this data, and the competition is a major factor that has resulted in the costs coming down,” he says.