Customer Data Platforms: Powering Personalized Customer Experiences

Ask any marketing professional, and most will agree that there is more customer data available now than at any other time in their careers. This is an exciting opportunity, but it is also one that often becomes profoundly frustrating as they navigate legacy systems and siloed data. The sheer volume makes identifying and using the right data feel like finding a needle in a haystack.

Customer touchpoints are everywhere: online via websites, multiple social media platforms, ecommerce, and apps as well as offline via in-person interactions, point of sale transactions, kiosks, call centers, and more. The internet has made it possible to know a staggering amount about customers, but the current data landscape makes it difficult to create an actionable, personalized experience.

Rather than making customer behaviors clearer, the deluge of data often makes customers more opaque to marketers. Gaining actionable insights is further complicated when much of the data is controlled by third parties, siloed off from other data, making it difficult for nontechnical marketers to access. Pulling together a single customer profile can involve finding and reconciling data points from more than a dozen different sources. This is nearly impossible to scale.

A CDP is marketing technology that brings customer data together in one place, streamlining analysis, testing, targeting, and other marketing-related activities. It provides the right data at the right time to provide personalized experiences across channels and interactions.

This is achieved through a five-step process: the capture, collection, and analysis of data; creation of unified profiles; segmentation; prediction and testing; and activation/personalization. Together, these provide a seamless customer experience.

Aggregating Data Sources

Right now, marketers are dealing with silos of data located in numerous places: Analytics, CRMs, email, ecommerce, point-of-sale systems, and many more. A CDP can aggregate these sources and more into one place, along with offline data, such as in-store interactions, event attendance, and more. Having the data collected in one place, without having to integrate multiple spreadsheets from a variety of sources, allows for more straightforward analysis.

Much of the data that is currently available is generalized. That means it is not connected with a particular customer. While this can be helpful in creating generic marketing personas, which have historically been the go-to tool for making assumptions about customer behavior, they are incomplete.

In the circumstances where data is specific to a single customer, small differences like a slightly misspelled name, inclusion or exclusion of a middle initial or suffix, title or position, or multiple addresses, phone numbers, emails, and social media accounts can cause duplications in data. This creates both frustration for the customer and a challenge for marketers as it yields incomplete and confusing profiles.

A CDP streamlines the process of reconciling these broken profiles into a single customer record, allowing for nuanced understanding of specific customers, as well as generalized personas.

Hand in hand with segmentation is testing. Data that is more quickly and easily segmented makes for a much more streamlined A/B testing process. This straightforward process allows marketing teams to test offers, promotions, and messaging that can help strengthen a customer relationship.

This level of testing extends beyond offers and promotions. It is possible to test image types, image placement, content types, button locations, CTAs, and more. Every interaction offers an opportunity to see what resonates best with your customers.

Activation and Personalization

With detailed, granular behavior information, the CDP enables marketers to activate customers across channels and develop personalized experiences. Customers will receive the best next interaction to meet their needs, whether that is the right incentive that will lead them to click, reminding them about a product they saved until later, or completing the check-out process for purchasing an item.

Third-party cookies are already on the decline with the inclusion of tracking blockers in iPhones, and Google Chrome, Safari, and Firefox. These data trackers from outside domains provide information on engagements, customer behavior, and analytics that have traditionally been critical to making decisions on how content and products are positioned online.

While third-party data comprises much of the siloed, hard-to-interpret data that marketers currently encounter, it will still need to be replaced to accurately understand customers. A CDP allows even non-technical staff to engage with data, will prepare your website for data collection changes that will arrive with the loss of third-party cookies, and will meet or exceed the expectations of increasingly sophisticated customers.

Rising Customer Expectations

Consumers are more sophisticated and expect better. The seamless digital experiences of giants like Amazon, Google, and Apple have changed consumers' expectations. They expect the same seamless interactions from every digital interaction whether from government, nonprofit, or a small business website. It is the new norm for digital experiences.

There are significant benefits both internally and externally. Within the business, time saved on currently arduous data collection, organization, and interpretation processes and on tasks like profile reconciliation can instead be spent on analysis, testing, and personalization efforts that can offer direct business benefit.

It is this opportunity for personalization that provides the clearest external benefit. According to Boston Consulting Group: Two-thirds of survey respondents said that they expect at least a 6% incremental annual revenue lift from personalization, with companies in several sectors anticipating increases of 10% or more.

Recognition and Help

Personalization has such a strong impact because of the individualized experience it offers customers, generally along two paths: recognition and help. Recognition includes things like knowing who the customer is, what their past interactions and purchases have been, and what they value. This kind of personalization is increasingly becoming a norm, though one that can be time-consuming to achieve without a CDP.

Help-based personalization is the next phase of the relationship-based customer approach that a CDP helps achieve. The kind of help a CDP can provide includes direction to relevant products, new information, and targeted special offers. This attention to past interactions and focus on individualized value boosts customer loyalty.

As demands on customer experience and data privacy continue to grow, a CDP is increasingly going to become standard for customer-facing websites across industries, including the private sector, nonprofits and government. With the end of third-party cookies on the horizon and rising customer experience expectations, the time to explore a CDP is now.

Making a switch of this magnitude can seem daunting, but the benefits of developing a streamlined data approach will prove worthwhile. Technical staff will spend less time focused on supporting marketers, allowing them to take on other priorities. Strengthened customer relationships, bolstered by seamless transactions and data transparency, will have a significant impact on ROI.

If your organization is ready to future-proof its digital ecosystem, strengthen customer engagement, and translate data into meaningful outcomes, AgencyQ can help. We unite experience design, technology and data to create personalized customer experiences that boost revenue, lower costs, increase customer retention, and improve employee satisfaction.