How a customer data platform can add value to your business
Article by Segment chief product development officer Tido Carriero.
In an increasingly competitive business environment where rapid change has become the norm, understanding your customers has never been more important.
However, achieving a clear view of a customer is not a simple task. They may interact with your business via multiple channels and have relationships with different departments or product groups.
As a result, records of communications and transactions can be held in different systems and locations. For many businesses, pulling these records together to create an accurate, single customer view is little more than a pipedream.
The power of customer data platforms
As businesses grapple with the challenge of achieving better insights into their customers, increasing numbers are examining the potential of customer data platforms (CDPs).
CDPs offer significant benefits. They can provide a complete view of each customer, keep records organised, and allow powerful analytics tools to be used that can provide valuable insights.
Once deployed, such a platform can combine data that is being generated in different parts of the business. Interactions via email can be combined with call records and transactions carried out on a website or in a physical store. Their ability to add value to daily operations is significant.
Achieving a successful deployment
As is the case with the introduction of any new business-wide technology platform, it’s essential to establish clear rules and guidelines from the outset. Thorough pre-planning will ensure success once everything is up and running.
When it comes to deployment of a CDP, the four key steps are:
1. Careful data selection:
Businesses today tend to generate and store large amounts of data. While some of this will assist in generating good customer insights, some will not and instead add to the digital clutter.
Start by conducting an audit of all the customer data being collected and determine whether it will add value to the process. If the answer is ‘yes’, add it to the mix that will be used by the CDP. If the answer is ‘no’, review whether it needs to be collected in the first place.
2. Understand governance requirements: Having a comprehensive data governance policy is critical. It will ensure customer data is stored and used in line with legal requirements and that the business complies with related regulations.
An effective data governance policy will cover data tracking, validation, and enforcement. It will also provide a good view of the quality and consistency of the data being collected and ensure proper protocols are followed before any new data is added to the CDP.
3. Avoid data silos: When data is collected by different departments or groups within a business, it often becomes stored in silos that make it difficult to be located or shared. This can lead to inconsistencies in customer records and cause major problems for a CDP.
One way to address this is to undertake a business-wide review of all data to determine where it is being stored and by whom. Over time, work towards having a customer data infrastructure that ensures data is accurate and consistent across the whole business.
4. Remember data security: A key business benefit of deploying a CDP is that it can help to make business data more secure. Many CDPs are designed with strong data security practices in place.
Always ensure that the CDP selected operates with an ISO 27001-based security program. This means the vendor will be constantly evaluating, refining and augmenting the security standards being used.
Improved business insights
Once a CDP has been put in place and is operational, associated data analytics tools can be put to work. Fed with complete and accurate data, they will be able to provide insights that previously would have been impossible to achieve.
Some examples of what will be possible include:
- Personalised marketing campaigns, that are based on previous interactions and product purchases. This will boost customer engagement and strengthen loyalty.
- More effective inventory management, by providing a more accurate picture of exactly what is being sold and where. Stock mixes can then more accurately reflect real customer demand.
- Improved sales, by using existing sales data to improve the chances of converting a single purchase to a multi-buy. Offering customers new selections based on previous purchases can be a very powerful activity.
- Insight into higher-value customers, so that you can provide them with particular attention and ensure they remain loyal to the business over the long term.
Delivering business benefits
Selected properly and deployed effectively, a CDP can deliver significant benefits to a growing business. By allowing an accurate, single view of each customer to be generated, marketing and sales activities can become much more targeted.
For customers, the experience of dealing with the business will be greatly improved. More personalised interactions and a smoother experience will ensure they continue to return for more.
It’s worth taking the time to explore the benefits offered by a CDP today so that your business is ready for the opportunities of the future.