With the covid-19 pandemic receding into the background, there is only one thing that has been strengthened – our reliance on Smart technology (also dubbed as SmartTech in the modern parlance). Right from the beginning of the pandemic, the decisions have been well thought of, well carried out, and well intentioned. But what anyone couldn’t foresee was the addition of data which kept on pouring in. With businesses and individuals preferring digital technology, and smart devices, online data consumption proliferated in leaps and bounds in no time. The pandemic has also placed severe limitations and constraints for businesses in terms of reduced workforce and limited available resources. This sudden influx of data of all kinds has made it imperative for businesses to derive value out of it. This idea of dealing with the avalanche of data brings in the idea of Customer Data Management Platforms into the picture. CDPs enable businesses to look out for potential customers with ease, and create efficient and effective strategies to communicate with them. This is particularly evident by the fact that 95 percent of senior executives believe that data is the pivotal fuel for their business strategies. With their eyes set on acquiring new customers and retaining existing ones, marketers can now look to achieve better customer satisfaction and overall best retention rates. CDMs can be used to further filter quality data and work towards gaining higher profits. But what exactly is Customer Data Management ? Put simply, it is a process of collecting, managing, and analyzing data throughout the entire customer journey with the goal of providing personalized, real-time, and channel-agnostic customer experiences. The importance of having an effective and proper CDM is highlighted by the fact unearthed by IBM that around 83 percent of businesses suffer from the consequences of data inaccuracy which costs around USD 15 million on average per business per year. So it is extremely important and vital to have the right type and highly accurate data. This being said, it is a burn of time and resources if a business goes about collecting all data from every possible touchpoint with the customer. This blog explores the importance of customer data management to supercharge your customer experience. Read on to find out how,
Right Types of Data
As already mentioned above, it is a futile and fruitless task to collect all the data from every possible touchpoint with the customer. The right types of data to be collected for CDM can be categorized as identity data, quantitative data, descriptive data, and qualitative data. Let’s explore each category in further detail.
As the name itself suggests, identity data is any piece of data which reveals the identity of the customer. Examples of identity data are: name, age, gender, contact number, payment info etc. Businesses usually encounter such data when customers sign up, make payments, subscribe to products and services etc.
Quantitative data is based on the interaction of the customers with the brand . It is usually obtained from:
● Web analytics tools embedded throughout the customer journey
● Cookies and cache in the browser
● Social media activity
Examples of quantitative data are:
● online /offline transaction data
● Customer service interaction
● Inbound/Outbound transactions
This data is of the kind which aims to collect more accurate and highly precise information of the customers which inturn can be used to predict:
● Seasonal growth/decline
● Lifespan of the customer cycle
It can be collected via surveys, questionnaires etc.
This category of data is encountered by analyzing feedback information, personalized newsletter interaction etc. Examples of qualitative data are choices, interests, inclination, preferences etc. A good heuristic to collect qualitative data is to employ the journalists six – who, when, why, how, what, where.
What is Customer Data Management?
Traditional marketing strategies have been shifted by the ever changing expectations of customers and the fast paced evolution of customer data from a persona-based marketing to Personally Identifiable Information (PII) marketing driven by AI-driven technology. Customer Data Management is the first primary factor which is used by marketers to perform data-driven marketing and advertising. AdTech and MarTech strategies are used by marketers to precisely target their audience. In order to leverage customer data completely and derive value to power an exceptional customer experience, it has become imperative for marketers to have an effective and efficient CDM strategy. Here are some statistics from Forbes to convince you about the importance of customer data management.
● 80% of customers replied they are more inclined to brands with a personalized experience.
● 96% of customers replied that customer service is the primary factor that determines their loyalty to the brand. ● Firms who use data-driven marketing experience a competitive advantage and profitability. Also, it is six times more profitable year-by-year.
● 64% of marketing executives have a firm belief that data-driven marketing is significant in the economy.
Components and stages of CDP strategy
CDM helps marketers by enabling the free flow of real-time customer data across the organizations. The ultimate result of CRM is to help companies reach the marketers goals – personalized experiences to every customer across the buying journey. The four components of CDP strategy are outlined below:
Data Collection and Integration
This is the first step to engineer a strategic and integrated customer data model dependent on data coming in across various touchpoints of channels, devices, and platforms. This data needs to be collected in a centralized storage system such as a RDMS database, NoSQL database, Data WareHouse, DataLake etc. Then, it should undergo a process called ETL.
● E- Extract
Ingest the valuable data which is of significant value
● T – Transform
Transform the data by performing operations such as making all the data in a standard format, removing the missing values, and removing the duplicate values.
● L – Load
Loading all the transformed data in a CDM platform such as CDP, CRM, DMP.
The ultimate output from performing these operations is that all the data needed is at a centralized place.
Data Management involves building a unified, complete, and single view of the customer by connecting all the relevant data points of each customer. In MarTech, performing this step entails building identity graphs, and 360-degree profiles of the customer by including:
● Probabilistic identities
● Building Identity Graphs
● Developing a single views of the customer
● Lastly, adding customer consent for regulatory compliance
This step entails building the targeted audience lookalike profiles. Then, marketers can run predictive analytics to create models of potential outcomes.
This step involves the selection of the best marketing platforms to run data-driven campaigns. Then, the data has to be integrated with performance tracking and predictive analytics system to optimize campaigns in real time.
Types of Customer Data Platforms
There are various types of customer data platforms in the market to choose from. Infact the worldwide customer data platforms market will grow at 19.5 percent CAGR from 1.3 billion USD in 2020 to 3.2 billion USD in 2025.
Customer data platforms
CDP software is used to aggregate and organize customer information touchpoints to be used by other software systems. CDPs also capture and organize centralized customer profiles in real-time by bringing in data from first, second, and thirty party sources to create customer profiles.
Data Management Platforms
These are digital data software platforms that collect and manage campaign and audience data to run digital advertising campaigns. To ensure compliance with government regulations on privacy and protection, this data is anonymized and comes from third party sources such as cookies, user identification identifiers, and IP addresses.
Customer Relationship Management
CRM softwares preserves data about customers and service providers. The unique difference between CRMs and CDPs is that the processing of data is different. CRM systems can access data only when there is an interaction between the customers and the brand. CDPs collect and store customer data using different online and offline platforms.
Digital Experience Platforms
A DXP platform is a set of software systems which enable the creation and management of blogs, mobile applications, forums etc. One way to enhance customer experience is to connect and have CDPs to supply customer data to DXPs.
The foundation of excellent customer experience lies in maintaining extensive customer data management. Personalized experience, tailored communication, and proper recommendation can be achieved by using customer data management.