B2C companies are implementing Customer Data Platforms (CDP) on a large scale, the major motivation being the potential of data-driven personalization to increase ROI. Having a CDP in place provides you with one single platform for all relevant customer data and allows you to synchronize all marketing promotions based on individual buyers or segments.
Ironically, the CDP also appears to be a crucial ally in protecting customer privacy. A CDP collects and unifies customer data from different sources, allowing privacy preferences of customers to be enforced across all marketing channels. Thanks to this overview of customer data, companies can respond quickly to privacy related questions. Altogether, this ensures CDPs are identified in trend watching reports as a key resource for agile marketing.
Leverage the discussion on customer data
It is tempting to see a CDP as the silver bullet for all your customer data challenges. CDPs possess the for marketers’ irresistible ability to unify disparate customer data that enables omnichannel personalization and other use cases and lead to less marketing waste. In practice, however, not one single system can meet the expectations marketers have of a CDP. Forrester warns that CDPs are often used as just a band-aid. Their findings from analyzing eighteen CDP systems show that:
- Many CDPs don’t offer the advanced identification level you would expect, hence cross-channel personalization remains manual work for marketers.
- Often, it’s impossible to integrate CDPs with the current marketing technology stack
- CDPs have major differences: some don’t even offer the basic functionalities needed to get a grip on data complexity.
Without a solid strategy and organizational approach, a CDP will not meet the expectations of businesses in facing their customer data challenges. As a result, CDPs become just another tool in the already crowded MarTech stack. They take up server space, cost money, and marketers invest time in learning to work with a new system in the hope it will give them good results. Without blindly following the CDP train, this trend does provide an excellent opportunity to put privacy and personalization on the agenda in your organization. The discussion should not be on the means, but on the goal: the sustainable collection, unification, and management of customer data.
Companies struggling to get a handle on their customers data and privacy are in good company, according to the FD (log in). That doesn’t make creating and adhering to a solid data strategy any less necessary. You should not only adhere to the law, but also to customer expectations of a personal customer experience. Therefore, you need to go through a data unification process. An additional advantage of such a process is the inevitable discovery of weak data leaks. It starts with seemingly simple questions; which customer data do you want to collect? With what purpose? And which KPIs? How do you get that data? How are you going to use it? This will lead to the inevitable question: do we need a CDP?
6 Steps to a sustainable customer data strategy
To start with data unification, you will need to critically reflect on the six topics below. For each topic, you will set objectives and KPIs and devise methods for:
- Customer data – What do you need to better understand who your customers are, what they need, what they like about your company, your products, and your promotions? Which similar audience should you reach, and how do you increase your customer base?
- Marketing effectivity and relevancy – How do you improve communication with customers based on what you know about them? Think about tone of voice, which products you can offer in which situation, and how you can further personalize the experience of users.
- Customer retention – How do you satisfy your customers in the long run? How do you build strong relations with them? How do you create trust?
- Marketing efficiency – How can you improve the list above with your current capabilities? How do you increase the ROI of marketing spend? Can you track and provide insight into the growing number of channels? Who is responsible for this?
- Future proof – Is your business ready to compete with the use of customer data? Is your company taking the right steps towards personalization, AI and machine learning? Which steps should you take to ensure competitiveness over the next 10 years?
- Organizational change – Are your organizational culture and internal processes adequate to meet customer needs? What can you change and optimize based on customer data insights? Keep in mind that organizational change is often the most difficult hurdle when moving toward customer centricity.
By implementing these actions, you are using the buzz around customer data to address the strategic challenges of today and tomorrow. The solution to data challenges is not just found in a technical solution such as a CDP, but in a company-wide approach.