Customer Data: staying ahead of the curve
In many cases, we voluntarily give more data to companies in return for having a high value or more convenient experience. But this is not the case when losing control over the data and how that data is used. For example, 63% of customers will cease purchasing from companies that employ inadequate personalization strategies.
Customers may offer their phone number to a company in order to receive SMS notifications on product arrival. Before they do that they must trust that the company will not use it for promotional or routine communications. Such customer preferences are pressuring businesses to find efficient and effective ways to collect, manage, and extract insights and value from their customer data. Eventually all businesses want to use it for personalization, AI, machine learning, CX and other purposes. This all while remaining compliant with customer privacy, consent, and protection regulations and standards.
If you can achieve the balance between customer and business value, your organization will stay ahead of the curve today and tomorrow. Organizations will either gain a competitive advantage or lose customers to their competitors. It's all depending on how rapidly they can make the organizational and technological jump to infuse data-driven customer-centricity in all they do.
360° perspective of a customer
CDPs for future-proof customer-centricity
So, how do Customer Data Platforms (CDP) assist firms in striking that balance and taking the necessary steps to achieve it?
CDPs are a relatively recent yet important component of the IT stack. They help you prioritize your client data so you can get the most out of your marketing investments, make your business future-proof and comply with privacy and compliance rules. Customer Data Platforms collect and consolidate data from a variety of sources to develop complete customer (anonymous and known) profiles. These profiles will include all data collected at various touchpoints during the customer experience. That way these unified profiles provide a 360° perspective of a customer while being compliant with current data privacy standards.
CDPs, unlike CRMs, are designed to scale data ingestion. With built-in machine-learning automation they can unify data, connect a single customer profile across devices, cookies, channels, and ad networks, and enable real-time analysis and activation of that data through omnichannel campaign execution. Because they are in charge of centralizing and analyzing all consumer data formerly maintained in siloed systems, such as advertisement networks, e-mail solutions, applications, websites, ... A CDP enhances the functionality of systems like CRMs, DMPs, and Marketing Hubs.
From there, it’s up to marketers to determine how, when and where to best reach their customers.
“Personalization is becoming more pervasive. Only by acting today, however, can companies hope to be in a position to deliver value to both their customers and their brands”
CDPs for today’s customer value
Organizations are at various stages of data maturity. However, no matter how far a firm has progressed, it will always have consumer data that might be put to better use:
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By leveraging personalization across channels: Marketers can already start unifying and analyzing structured and unstructured customer data using CDPs. They can use data to feed information to out-of-the-box algorithms that uncover product or content recommendations for specific customers, estimate customers' chance of buy or churn, and then use orchestrated campaigns to activate those insights across channels. These capabilities are frequently included into CDPs for teams with limited access to technical experience and skillsets.
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By ensuring the highest standards of customer privacy and protection: When it comes to dealing with consumer data, this is definitely the most essential necessity and challenge for businesses. Companies must have the correct solution in place to ensure legal compliance. They need to be clear about how data is used, limit personal data processing to what is essential, safeguard data from theft, and provide customers with the right to be forgotten.
A CDP ensures that organizations can maintain the required privacy, control, security, and transparency on all of the data they have gathered on any individual, as well as allowing customers to update their specific consent (or lack thereof) on their customer data and the company's use of it at any time.
CDPs for future-proof organizations
Organizations who want to stay ahead of the curve in the long-term, need to be able to set a solid foundation to prepare for the challenges and changes that the market is seemingly trending towards. In these three examples you will notice that data is a common denominator:
AI and ML analyze data using automated and predictive capabilities to discover patterns. These patterns can be used to create predictions and provide recommendations. For example, if the system recognizes that a customer is interested in buying a T-shirt based on their behavioral data, it will send an e-mail recommending similar items to the ones the customer last viewed.
However, AI and machine learning require a significant amount of data that can be processed in order to function. While it may be possible to collect enough data to process within a single marketing channel, such as ad networks, a webshop, or social media, combining data from these channels is significantly more successful in supplying your algorithms with a large enough pool of data. Here's where the CDP comes into play.
It combines all client data from various systems into a single solution to feed your algorithms. This can be used to identify high-value consumers, ideal next steps, product recommendations, and customers who are likely to churn or buy. The more data pushed into those systems, the smarter they get, allowing you to make better decisions, conduct more effective campaigns, and intelligently automate operations.
The growing tendency of contacting customers across several channels can result in disconnected data across these fragmented touchpoints. Companies will always struggle with the pace at which they can communicate with clients, wherever they are and whatever platform they choose to work within. A CDP can serve as a solution because it is created to "simply" integrate all the data collected across these channels.
Organizations may begin to explore the next opportunity area within CX – seamless and relevant experiences across physical and digital locations that are individualized for the customer – by centralizing all customer data in a single solution. Connecting offline and online systems to determine whether a customer has made a purchase in the store and adapting product recommendations on the website in real time to suggest additional products related to that purchase.
The case for a CDP
With the above scenarios, we can conclude that investing in customer data and CDPs ensures that organizations are getting a solution to some of the data challenges. This while also building a solid foundation to prepare for a rapidly evolving future.
The sooner firms begin to take this jump or the next steps to go even further, the more likely they will be able to derive strategic value from it. With all of this in mind, one of the most typical CDP implementation blunders is forgetting that technology is merely a facilitator. Your company requires a sound strategy and a roadmap that includes the use cases that will add the most value to your business.
Because a CDP as a technological solution provides limited value on its own, you must extract it. This by leveraging the insights gathered through it, building value-generating journeys, and collaborating with other internal departments. The organization's lack of experience or preparedness to recognize this could result in a project with a negative return on investment. Make sure you have the required knowledge, whether internal or external, to enable a successful CDP implementation and proper use of the solution subsequently.