Storage Isn’t Strategy: 3 Best Practices for Customer Data Management
What are the benefits of customer data management for a marketer? It depends on your approach. Collecting and organizing your customer data is essential to extracting valuable insights and informing your decision-making, but it’s only one piece of the customer data management puzzle.
Too many businesses confuse customer data management with simply storing customer details in data lakes or logging customer interactions in customer relationship management tools. But unless your data is accurate, accessible and actionable, it’s just a collection of ones and zeroes.
In order to deliver the personalized customer experiences your customers demand, you have to connect all your relevant first-party customer data, provide an easy-to-use interface for business users to access customer insights and enable customer experience orchestration across channels.
If you’re a marketer looking to utilize your customer database to improve your customer journey and customer retention, this blog post is for you. Creating a data management platform with multiple sources will allow you to gain valuable customer insight and analytics for your marketing campaigns.
Use these three best practices to optimize your customer information management system and maximize its business value.
1. Make it Accurate
Up to 90% of consumer data is unstructured and — surprise, surprise — 95% of businesses struggle to manage unstructured data. That’s to say they’re working in the dark, powering their CX strategies with fragments instead of the full customer picture. If you want to derive insights from your customer data that will help you provide exceptional customer experiences, you first need to break down data silos, resolve incomplete customer records and build a single, comprehensive view of your customers.
The problem is, your customer data is probably scattered across numerous systems, including brick-and-mortar locations, e-commerce platforms, websites, call centers, social media, mobile apps, advertising platforms and SaaS point solutions. These systems all organize and store data in different ways and, unfortunately, they don’t “talk” to one another. As a result, you end up with multiple profiles for a single customer, each of which includes a small fragment of their history with your brand.
By investing in a customer data platform (CDP) that can gather and centralize all your customer data in a single location — and making it the basis of your customer data management strategy — you can get a handle on all the customer information flowing in from different sources without having to make any changes to underlying systems. CDPs use sophisticated identity resolution technology to create a single view of each customer so you can capture the complete history of an individual’s interactions with your brand across all online and offline touchpoints.
This gives you the foundation you need to quickly and easily enhance every downstream customer experience, regardless of channel. Even better, you no longer have to wait for time-crunched data experts to extract the insights you need.
You also set yourself up to take advantage of AI and machine learning capabilities. Using AI-driven lookalike modeling, you can quickly define which characteristics make up your “best customers” and let the model search for prospects and existing customers who share the same key behavioral and demographic attributes. Once marketers have identified this target audience, they can craft a personalized experience designed to increase conversion, retention and customer lifetime value (CLTV) for this particular set of customers.
Channel optimization modeling is another powerful way to use customers’ granular behavioral data to increase marketing return on investment. Marketers simply create relevant messages or experiences, and the CDP automatically chooses a channel or channels to activate them on based on customers’ individual behaviors and preferences.
2. Make it Accessible
Nearly 50% of all marketing decisions are still made on hunches rather than data. That’s why you should prioritize giving business users access to the info they need to build and validate an exceptional customer interaction and experience.
Unfortunately, that’s easier said than done with traditional tools. Without easy-to-use technology, building data-driven audiences remains a slow, manual process that requires lots of back and forth between IT and marketing. It can take weeks or even months for marketers to build segments and use them in a campaign, by which point whatever opportunity they were trying to capitalize on may have passed.
Even if marketers succeed, the challenge isn’t over. It generally takes four-to-five iterations to achieve 80% of the value of a new personalization initiative. And even the most useful data regarding real-world campaign performance won’t do marketers much good if it takes too long to update a campaign.
The solution lies in democratizing data for marketers, removing their dependence on IT and enabling them to build, deploy and refine campaigns on their own using the necessary audience and performance data.
This requires a CDP that combines a high-performance analytical engine with a user-friendly interface that “thinks” like marketers. This enables marketers to play with audience parameters along an unlimited number of customer attributes, giving them immediate visibility into the audiences they’ve built and the ability to make adjustments until they arrive at segments of optimal shape and size. By unleashing the creativity of marketers in this way, brands can speed up time to market, increase conversion and retention rates, foster long-term brand loyalty and grow CLTV.
However, it’s vital to maintain the security of customer data when making it accessible to business users. After all, it’s one of your brand’s — and customers’ — most valuable assets. Personally identifiable information (PII) must be secured to comply with the California Consumer Privacy Act, General Data Protection Regulation, Health Insurance Portability and Accountability Act and other regulations. So it’s important to work with enterprise-grade tools to manage data access, user permissions and privileges (and that integrate with the tools you already have). Work with CDP providers that enhance and update data privacy and security practices consistently, including undergoing regular audits such as SOC 2 Type 2 examination.
3. Make it Actionable
Identifying insights in your customer data is one thing — turning them into personalized customer experiences that drive results is another. You must be able to transform insights into multi-step customer journeys or highly relevant real-time experiences across any and all channels where your customers interact with your brand.
Brands that deliver personalized customer experiences across channels not only drive higher annual revenue, their customers also tend to be 23 times more satisfied when compared to brands without omnichannel strategies.
With that in mind, your CDP should be able to integrate data with your preferred execution systems, including engagement, sales, service, advertising and more, in any channel, at any volume, whether batch or real-time. Make sure your CDP also provides monitoring, reporting and easy implementation of control groups and A/B testing.
While data lakes and enterprise data warehouses (EDW) excel at storing data, it remains in an unrefined format that requires technical professionals to source it for analytics or integration with other tools. By contrast, CDPs empower business users to activate this data themselves via a semantic layer atop raw data stored in a data lake or EDW, allowing them to use this data to build attributes, design campaigns, orchestrate customer journeys and connect data to the appropriate marketing channels and activation engines.
Capturing and storing data is essential to customer data management, but to go beyond data storage and achieve your business goals, you have to prioritize making your data accurate, accessible and actionable.
Download our 2021 Customer Data Platform Guide to see how CDPs can help you achieve customer data management excellence.