To make the best decisions about strategy, marketers today largely depend more on data than on their gut instincts. While data is valuable and can reveal important insights, there are risks involved in betting on consumer data alone.

What are some caveats that companies need to be aware of when using consumer data to inform their marketing initiatives? Here, members of Forbes Agency Council discuss 14 potential risks for businesses relying on consumer data to drive their marketing strategy.

1. Not Finding The ‘Why’

Data is an effective tool for finding out “what” consumers are doing. Where data falls short is in explaining “why” they are doing it. Smart marketers would be wise to take an “outside-in” approach by connecting with and listening to consumers to humanize the data and fully understand the motivations behind their behaviors. – Camille Nicita, Gongos, Inc.

2. Lacking Focus On Actual Buyers

Shopper insights are readily available and often tapped to inform marketing direction, messaging and overall strategy. I would argue that a more valuable group to tap would be the “purchasers” rather than the shoppers. Brands would be well-served by focusing on who is actually buying their items, then enhancing brand loyalty by targeting others who are of a similar mind and creating a dialogue with these purchasers. – Dave Wendland, Hamacher Resource Group

3. Relying On Hindsight

Too many times, people use data to look in the rearview mirror. This narrows action moving forward and leaves sales on the table. Instead, use data that helps predict what your target is looking for. Then, develop content that is valuable on their terms and start them down the consideration path. – Leonard Cercone, CerconeBrownCompany

4. Examining Numbers Rather Than Behaviors

The problem with consumer data is the way many brands analyze it. The data isn’t a bunch of numbers; it represents real people who are telling you something. Brands need to examine the behaviors behind the numbers. Only then can they maximize the data’s potential. – Roger Hurni, Off Madison Ave

5. Uncontrollable Variables Interfering With Collection

When relying on consumer data to help market, you’re relying heavily on pure online data. The data can lack quality due to many uncontrollable variables that could be interfering with its collection. To counteract these variables, research on the psychological data of consumers can be paired with online data to best market effectively. – Tony Pec, Y Not You Media

6. Failing To Consider The Data’s Context

You need to make sure that you’re thinking through the context of the data and any external factors that may cause shifts in consumer behaviors. For example, when planning for 2021, will you go off of 2019 consumer habits? Or will you look at 2020 and what happened during the pandemic? – Spencer Hadelman, Advantage Marketing

7. ‘Analysis Paralysis’ Leading To Indecision

When there is so much data, “analysis paralysis” can often cause advertisers to avoid making critical decisions. With Facebook ads, for example, we’ve actually seen an improvement recently with broad audiences versus highly targeted audiences because the AI and machine learning is processing and using that data at a faster and more efficient rate than an individual could. – Brian Meert, AdvertiseMint

8. Being Misled By Self-Reported Data

There’s always a chance that consumer data, and especially self-reported data, is misleading. Ultimately, if you are relying on consumer data to fuel your marketing, make sure that the value exchange for them providing good data is substantial. In other words, if you can offer users something useful and/or improve their experience, the likelihood of accurate data collection increases. – Donna Robinson, Collective Measures

9. Not Accounting For Inherent Bias

Be sure to understand and account for any inherent bias in the respondents. For example, if the research data is generated by online panels, then you are likely to have respondents who skew younger in age and are more comfortable using technology. If you are not aware of this, unadjusted insights may misinform your strategies. – Brian Handrigan, Advocado

10. Data Quickly Becoming Obsolete

Relying on data rather than instinct helps marketers develop much more effective strategies and results. One factor to always keep in mind when relying on consumer data is that you have to make sure it’s up to date. With rapidly changing times, data can become obsolete rather quickly. One way to avoid this is to narrow down and combine several data points to ensure the highest quality audiences and results. – Jonathan Durante, Expandify Marketing Inc

11. Being Careless About Data Collection

One of the main risks is not being careful enough about the information you are collecting and how you are collecting it. Many new laws have been put in place recently, such as the General Data Protection Regulation (or GDPR) in Europe, to ensure that standards of privacy are followed. These standards include things such as how long you can retain someone’s data as well as what you can do with it in the long term. – Jon James, Ignited Results

12. Being Misinformed By Imperfect Data

Consumer data should be used knowing that the data is not perfect. The collected data could come from another member of the household who was using the device the data was collected on instead of from the intended consumer. Keep the halo effect in mind because one person could influence the purchasing decisions of another member of the household. – Jessica Hawthorne-Castro, Hawthorne LLC

13. A Resulting Lack Of Innovation

Did people know they wanted an iPhone before Apple created it? All the consumer data in the world can’t replace innovative thinking when it comes to developing great ideas. If you take a color-by-numbers approach to marketing based on what customers say they want, you will never produce an original work of art that inspires them in ways they had never imagined possible. – Scott Baradell, Idea Grove

14. Not Seeing The Full Picture

You need to understand that the data doesn’t always give the full picture. I watch a lot of people make decisions with the data they have, assuming that is all the information there could be. You need to take a step back and understand the ecosystem in which the data sits so that you can use it to make informed decisions—but don’t solely rely on it. – Erik Huberman, Hawke Media