2020 brought many changes in consumer behavior, especially the preferred shopping channels. Sanitary restrictions and the new normal fueled a growth of 24.1% in online sales.
According to McKinsey & Company, during the first three months of the pandemic, e-commerce experienced ten years of growth in just ninety days. In point of fact, Covid-19 has brought a shift from physical stores to online shopping by around five years, according to a IBM’s study about shoppers disrupted.
As purchase interactions increased, the amount of customer data generated increased as well, and so the need of storing huge volumes of data and sharing it cross-company.
What is a Customer Data Platform?
Within the omnichannel world we live in now, companies need the right technology solution that gathers all data in one place creating a single source of customer truth available cross-company, and this starts with the use of a customer data platform (CDP).
A CDP is a software that combines data from multiple tools in order to generate a unified customer database, creating a customer profile, usable to other systems that might need it.
While traditional CDPs are able to collect data, there are other CDPs that also have the ability to activate this data through different marketing or business activities such as personalized offers, communications, promotions, product recommendations, and more.
An actionable CDP as a tool for activating data
Actionable CDPs not only collect and store data but also offer users a way to activate that data in one place. This is major for marketers looking for a technology solution to improve retention and loyalty.
Companies need a CDP that allows them to leverage customer data and activate it through valuable tools to make their company grow. This is possible with an actionable CDP that not only allows them to analyze customer behavioral data but also allows retailers to create promotions, offers, personalized communications, or dashboards within the same tool. In this way, retailers will be able to push out the perfect content, to the right customer, at the right time.
Enriching customer profiles with the different types of data available
Customer data should be the basis of all operations within a retailer. It should be used to improve customer service, delivering hyper-personalized coupons, launching smart loyalty programs, offering a unique web experience, planning store layouts, and data sharing with 3rd parties for business-to-business purposes. For marketers, it is essential to know more about each one of their customers. They need to enrich customer profiles with different types of data and relevant KPIs such as frequency, churn propensity, purchase predictions, and calculated attributes, to better plan promotions, new products, store layouts, personalization activities, and more.
There are different categories of data such as demographic data, transactional data, interaction data, and interest data, which can be collect and shared as following:
- 1st-party data: This is the data collected primarily by the company, and it’s regarded as the most valuable data for a better customer understanding. This type of data is your history of your customer interactions and it can be collected from purchases, visits to the website, receipts, products, categories, and promotions.
- 2nd-party data: This data is collected by another company and shared or sold to a non-competitive partner. It can be used to scale promotions beyond existing customer bases and drive acquisition. One example of obtaining second-party data could be a mutual collaboration between an airline and a hotel booking, or a retailer and their credit card company sharing loyalty program data. In both cases, data is shared by both parties.
- 3rd-party data: This data is usually collected by data management platforms or data providers to enrich data previously collected. For example, it could be a useful tool for targeted profile segments that can be bought by companies or brands for their marketing campaigns. Demographic and transaction data are usually the most valued types of third-party data.
How actionable CDP’s manage and activate data
Once we’ve established the different types of data we can collect and share, let’s see how they are managed within a Customer Data Platform step by step:
- Collect Information / Ingest data from different sources:
Collect data from different sources through APIs or file exchange via both online and In-store to have a better 360 customer profile in real-time.
Auto-update your data by setting up your own cleansing rules or rules created by default. In this way, it will help you reduce errors and mistakes by using an intelligent technology.
Enrich profiles with customer analytics such as Churn Rate, Customer Lifetime Value. Also, enrich customer profiles with their preferences, affinity, and purchase behavior.
Store data and distribute them in different storage systems optimized for your business needs and each of your departments, such as sales, customer support, marketing, among others.
Allow all departments of the company to have a unified source of data to manage it in a way that helps better results in their operations.
- Identity resolution:
If retailers realized that they have multiple customer profiles, they can unify these profiles into only one profile, but keeping their history
- Activate data across channels and devices:
Leverage customer data to create effective loyalty programs, personalized offers, and deliver real-time cross-channel campaigns.
Benefits of a CDP:
A CDP is essentially built for marketers, but it also provides meaningful insights and information for the entire company as it reflects the customers’ behavior and sales performance. Here are 5 benefits of having a CDP:
- Get a 360 ° customer view: A CDP combines data from different resources and creates a single customer view. In This way, it helps retailers have a better customer understanding of their shopping behaviors, preferences, last purchases, and more.
- Reduce marketing efforts and boost ROI: It is difficult to know the real costs and returns of marketing efforts. Having a CDP you can know how channels and campaigns are performing and which ones are doing it better.
- Gain insights that are translated into superior analytical capabilities: By gathering data, its interpretation is greatly facilitated which allows extracting more precise insights about the customer and making better and reality-based decisions.
- CDPs improve/enrich the relationship between partners and suppliers: Retailers that have a CDP, are able to provide suppliers with accurate information that helps to work together in delivering personalized campaigns to customers.
- Single customer view: By having a 360° customer view companies can have a better customer understanding, and offer them a better shopping experience. The new consumer expectations are getting higher and thanks to a CDP, companies can exceed their expectations.
Use Cases of a CDP: Personalization
With the correct use of a CDP, it’s easier to personalize interactions because two requirements for personalization are met: the amount of customer data that is available relating to purchasing behaviors, habits, and even locations and the ability to effectively deliver experiences across a variety of channels.
The biggest remaining hurdle is the difficulty of managing the data smartly to create these personalized experiences and communications.
CDPs offer one way of surmounting that hurdle. For retailers that do it in the right way, there is a big payoff in terms of sales lift, customer satisfaction, and a whole business organization that is able to connect data and use it to personalized experiences.
Enhancing business operations in one place
In order to improve personalization and take customer loyalty to the next level, retailers need a Customer Data Platform that makes customer data available to teams that drive the business and customer experience.
Loyal Guru’s retail-specific CDP is built especially for retailers to collect customer data from all online and offline channels to create a single source of truth with a unified customer view of their historic transactions, and real-time. Users can immediately use this data smartly to create personalized communications, automate their couponing operations, launch loyalty programs, build audiences in an exceptional time to market.
If you’re looking for improved marketing effectiveness through data activation, our customer data platform can help. contact us for a demo.