Customer Data: staying ahead of the curve

Mar 22 2022

Customers want to have personalized relevant experiences but not at the expense of losing control over what data they’d like to share with organizations and how that data can be used. For instance, 63% of consumers will stop buying from brands that use poor personalization tactics [1]

In many cases, we voluntarily give more data to companies in return for having a high value or more convenient experience. For example, customers might give their phone number to a brand so that they can get SMS notifications on package delivery, but only when they trust the organization will not use that phone number for promotional, regular messages.

Such customer preferences are pushing companies to find efficient and effective ways of collecting, managing and extracting more insights and value out of their customer data to later leverage it with personalization, AI, machine learning, CX and more, while ensuring they are compliant with customer privacy, consent and protection regulations and standards.

Being able to strike that balance between customer and business value will ensure your company stays ahead of the curve, today and tomorrow. Depending on how quickly organizations can make that organizational and technologic leap towards embedding data-driven customer-centricity in all they do, they will be either more likely to achieve competitive advantage from it or start losing customers to their competition.

CDPs for future-proof customer-centricity

So, in what way do Customer Data Platforms help businesses strike that balance and support them in taking the required leap towards it?

CDPs are a relatively new but critical solution within the tech stack. They help you prioritize your customer data to make the most of your marketing investments, future-proof your company, and ensure you organization meets privacy and compliance regulations.

Customer Data Platforms collect and unify data coming from many different channels to create complete customer (anonymous & known) profiles with all information generated on the different touchpoints along the entire customer journey. These unified and centralized profiles thus provide a 360° view of a customer while complying with current data protection laws.

Unlike CRM solutions, CDPs are built to provide scalability in data ingestion with built-in machine-learning automation that 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. Therefore a CDP extends on the functionalities from systems like CRMs, DMPs and Marketing Hubs because they are in charge of centralizing, and analyzing all the customer data previously kept in siloed systems, such as advertisement networks, e-mail solutions, apps, websites, and more.

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” [2].

CDPs for today’s customer value

Organizations are at different data-maturity levels. But regardless of how far along a company is, it always has customer data that could be put to better use:

By leveraging personalization across channels: with CDPs, marketers can already take the first steps to unify and analyze structured and unstructured customer data, feed it to out-of-the-box algorithms that find product or content recommendations for specific customers and even predict customers’ likelihood of purchase or churn and activate those insights across channels with orchestrated campaigns. CDPs with these capabilities are often built for teams with limited access to technical expertise and skillsets.

By ensuring the highest standards of customer privacy and protection: This is undeniably the most important requirement and challenge for organizations when dealing with customer data. Companies need to have in place the right solution to ensure compliance with the law, be transparent about how data is used, limit processing of personal data to what is necessary, protect data against theft, and grant customers the right to be forgotten.

A CDP ensures that organizations can keep the required privacy, control, security, and transparency on all the data an organization has gathered on any individual and can enable customers to update the specific consent ever given (or not) on their customer data and the usage the company makes of it, 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. Here are three examples below and you will notice that data is a common denominator:

Incorporating AI/ML: AI and ML use automated and predictive capabilities to process and analyze data to extract patterns that can make predictions and provide recommendations. For example, creating e-mails with dynamic content where, if the system recognizes a customer is interested in buying a T-shirt based on their behavioral data, it will send an e-mail to recommend similar items to the ones the customer last viewed, send a personalized voucher or create an outfit with one of the T-shirts they viewed.

But to work, AI and ML require large amounts of data that can be processed. While it might be possible to gather enough data to process within an individual marketing channel such as advertising networks, a webshop or social media, leveraging unified data coming from these different channels is far more effective in providing your algorithms with a big enough pool of data.

Here’s where the CDP comes into play. It unifies all customer data from different systems in one solution in order to feed your algorithms. This can be used to determine high-value customers, next best actions, product recommendations and customers likely to churn or purchase. The more data fed into those systems, the smarter these systems become, helping you make better choices, run higher performing campaigns and automate processes more intelligently.

Exponential growth of digital channels: The trend to increasingly contact consumers via numerous channels can generate disconnected data across these fragmented touchpoints. Unless a solution like a CDP, built to “easily” integrate all the data generated across these channels, is in place, companies will always struggle with the pace at which they can connect to customers, wherever they are and whichever platform they are choosing to work within.

Bridging the gap between online and offline customer experiences: By centralizing all customer data in a single solution, organizations can start to explore the next opportunity area within CX – seamless and relevant experiences across physical and digital environments that are personalized for the customer. For example, connecting offline and online systems to find out whether a customer has placed a purchase at the store and real-time adapting product recommendation on the website to suggest additional products related to that purchase, such as showing recommended bike gear after they’ve bought a new bike at the store – rather than showing more bikes.

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 current data challenges they are facing, while also building a solid foundation to prepare for a rapidly evolving future.

The sooner organizations start taking this leap or the next steps to go further, the higher the likelihood they will be able to extract strategic value from it.

With all of this said, one of the most common pitfalls of organizations implementing CDPs is to forget that technology is only an enabler. Your company needs to have the right strategy and a solid roadmap with the use cases that will bring the most value to your own organization.

Because a CDP, as a technology solution, on its own brings limited value, you need to extract it by making use of the insights gained with it, creating value-generating journeys, and involving different internal departments. Not having the right expertise or readiness within this organization to realize this may result in a negative ROI project. Make sure you have the right, internal or external expertise, to ensure a successful CDP implementation and that the solution is properly leveraged afterwards.