Customer Data Platforms – the Biggest Marketing Trend of 2021?
Coronavirus has rapidly accelerated the customer’s migration to online platforms across sectors, and legacy brands are facing increased competition from digital-native players, all of whom are angling to attract new customers. With the current climate creating pressure on operational budgets, companies must optimize their marketing spend while generating revenue streams by building new and loyal customer bases. It is therefore essential to create highly targeted, personalized and unified interactions. Customers are looking for consistency, contextual relevance and alignment from the brands they interact with. However, this remains a challenge for many organizations today, as they grapple with fragmented systems, legacy technology and internal silos acting as roadblocks to effective sales and marketing strategies and campaigns and customer service methodology. Below, I’ll explore these challenges in more detail, and identify how customer data platforms can help marketing leaders propel their strategies into the digital age. Fragmented data: Information is captured at every customer touch point, from marketing and sales to commerce and service. This leads to huge volumes of data stored in many locations. Many organizations utilize different systems across their technology stack, leading to both silos and duplications of customer data. Organizations struggle to connect it all together to provide a single, real-time view of the customer, and with no unification across these tools, customers are often spammed with disconnected and too frequent communications from brands. Lack of efficiency: Having these siloed systems also means that marketers and customer experience professionals have to execute campaigns through heavily manual processes, moving and maintaining the same data across multiple systems. Marketers spend a lot of time building the same campaigns repeatedly instead of creating a higher number of unique campaigns built on ongoing data analysis. Incomplete picture: Without a single tool showing all customer data and history across channels, marketers struggle to leverage technologies such as artificial intelligence for personalization, as these technologies rely on consistent and accurate data in order to build a complete picture of the customer. Internal silos: Most organizations own and maintain multiple software enterprise-wide solutions to support their front-end, client-facing functions. This leads to disconnected data flows that result in a disjointed and incomplete view of the customer. Salespeople are often unaware of a marketing campaign running in their geographies. Similarly, the services team can be disconnected with the value proposition promised in outbound campaigns. Customer Data Platforms (CDPs) can help to overcome these challenges. These are packaged software solutions that integrate with other systems to ingest customer data from previously disparate sources – including customer relationship systems, digital advertising and social media channels. Using artificial intelligence and data analytics, CDPs then create a holistic, 360-degree view of customers and prospects. How do CDPs improve marketing? The more you know about your customers, the better the experience you can provide them with. For marketers, these platforms are essential to creating the highly personalized and timely communications expected by customers today. With a CDP in place, brands can automatically and seamlessly build targeted brand campaigns, with real-time personalized messages and offers across channels. The amount of data collected by CDPs also helps marketing teams continually improve their campaigns through automated measurement and reporting to improve understanding of how well messaging resonates with target audiences.
The benefits of using a CDP range from an enhanced customer experience, to increased customer conversion and retention as well as a higher return on ad-spend, combined with all-round business benefits such as better operational efficiency and agility. How to select the right CDP for your business There are many CDPs out there – and choosing the right one is essential both for a return on investment and to create the marketing experiences needed to remain competitive today. When looking for a CDP, it is wise to take the following critical success factors into consideration.
The first, and perhaps most critical, success factor is data management. A CDP needs to have the capabilities to ingest the growing volume of customer and third-party data and its sources – both unstructured and structured. It should also harness artificial intelligence to build intelligence and deliver the sharp insights needed, while addressing the challenges of fragmented, duplicate data. Secondly, a CDP needs to have an in-built analytics solution, enabling the brand to measure everything, extract insights about their relationships with customers, convert those insights into actions, and support channel-optimized actions across the customer journey. Organizations should also choose cloud-based solutions where possible. These supersede on-premise competitors, offering improved scalability, security and compliance. Using the cloud also provides more flexibility to add or modify customer platform applications to support new or emerging uses or journeys.
Finally, to get the most from a CDP, it must be intuitive to use, enabling effortless access and understanding of customer data, and the insights generated. With the right CDP in place, brands can obtain a single view of customers and prospects, allowing them to create highly contextualized and relevant marketing strategies. These platforms also enable organizations to better leverage their company ecosystem and emerging technologies so that they can build better relationships, one interaction at a time, across any touchpoint.
Darshan Shankavaram is the leader of the Global Digital Customer Experience Practice at Capgemini