Staying ahead of customer journeys with CDPs
In this day and age, customer journeys are no longer linear and customers can reach brands at multiple touchpoints, making customer journeys increasingly complex and difficult for brands to keep up. With ever-expanding touchpoints, customer data platforms (CDPs) have become an integral part of marketing for brands. Are CDPs the silver bullet to staying ahead of customer journeys? How can you leverage them to deliver better customer experiences?
Optimizely and Dept joined hands in ‘Optimizing the Future’, a virtual event that explored leveraging CDPs in digital strategies through 2022 and beyond. Marcel Amosse, Optimizely’s Director, Head of DXP DACH, Dept’s data and technology expert Marc Preusche and Senior Digital Business Consultant Carolin Bornholdt discussed how CDPs are becoming part of our digital future. These are the five key takeaways from the insightful session.
1. Defining CDPs
While CDPs are focused on the customer, different people and companies may define them differently thanks to their broad capabilities. Establishing a clear definition of what CDPs are can help us leverage their full potential.
A CDP is defined as “a packaged software that creates a persistent, unified customer database that is accessible to other systems” by the CDP Institute, a vendor-neutral organization dedicated to helping and educating companies in managing customer data. Customer data platform software collects a wide variety of customer data from multiple sources and analyses it. Real-time first, second and third party data from CRM, web forms, events, email, social media, websites, and more are collected to form customer profiles based on their demographic, historic behavior and browsing history. The collected and analyzed data presents users with a better understanding of individual customers that can be utilized for more innovative marketing campaigns and to deliver a more personalized experience.
“Basically, it’s about bringing together all these data silos to get a 360º view of the customer. There are two key parts of a CDP: the analytical part, where you gather intelligence about customers and their activity on your site, and the engagement part, where all the intelligence is orchestrated to drive action,” says Marc.
2. Customer-centricity: The shift to tailored experiences
Gartner defines customer-centricity as “the ability of people in an organization to understand customers' situations, perceptions, and expectations.”
In the past, direct relationships with customers were the basis of a customer-centricity where local businesses would remember details including customers’ names, birthdates, and preferences to provide a tailored experience based on an individual customer’s profile.
As digital interactions became commonplace between customers and companies, companies need to keep track of huge customer pools across various physical and digital touchpoints to deliver a customer-centric experience based on their needs and preferences.
Carolin said: “Everything is a lot more complicated today, but we still need to be customer-centric. To do that, we need to gather data and leverage technology to communicate with customers in a customer-centric way.” Only with the help of digital data and technology solutions can businesses keep track of ever-evolving customer journeys and be truly customer-centric.
To deliver the right message, to the right person, at the right time, businesses must innovate their marketing for personalization instead of a one-size-fits-all messaging. To make this a reality, businesses can leverage CDPs.
3. Engaging customers actively and effectively through the funnel
While CDPs are often tied to customer loyalty, utilizing their full technological potential can benefit businesses at every stage of the customer journey by identifying opportunities to acquire customers and nurture prospects through the entire funnel.
On customer acquisition, Carolin said: “When you meet someone in real life, you have a short introduction; in the digital world this could be a Welcome Cycle. This is something that every company should have in some form. A common approach is to incentivize the first purchase, then you can follow up with great content relevant to that purchase, or take a service-led approach to make sure they know where to find you if they have questions about products.”
At first glance, Welcome Cycles may seem simple to implement with minimal setup. However, constant testing and experimenting to find out the best messaging, timing, channels and number of interactions required is crucial to the continuous enhancement and success of Welcome Cycles.
Marcel shared how a brand successfully leveraged Optimizely CDP to turn around an initially underperforming product line that was newly launched. He said: “When the launch didn’t drive as much revenue as expected, the company was weighing up whether to continue investing in the product line. They used the ODP (Optimizely Data Platform) to do some research and found that it actually had a fantastic conversion rate, it was just missing visibility. When the products were put in front of relevant audiences, they sold. So instead of canceling the line, they used the CDP to understand the customer profile and target promotion towards audiences that fit this profile and had huge success.”
Converting customers and getting them into the funnel are just preliminary steps to a long-lasting relationship with customers. CDPs can be leveraged to reduce churn. Businesses that are hyper-focused on acquiring customers often spend significant amounts of resources getting customers into the funnel, but their effort fizzles out once customers have been acquired. The data and technological capabilities of CDPs can help bridge this disparity by presenting opportunities for businesses to engage with customers effectively and at various stages of the funnel, improve customer experience and drive loyalty. While this is important for most businesses, it is especially crucial for products and services with long buying cycles.
With the help of some empathy and basic CDP functions, businesses can greatly enhance their customer experience. “Few companies turn off marketing messages when a customer has complained. But it makes sense to make sure unhappy customers don’t receive a marketing email an hour after making a complaint. That can be a real ‘oops’ moment,” said Carolin.
Marc also shared an example from the insurance industry that businesses may relate to, saying: “Insurance contracts tend to renew every year until the customer cancels it, and what a lot of companies still do today is have a customer service team call the customers who canceled their contracts. But a way to make this process more efficient and cost-effective is to use less expensive channels, such as CDPs, as a starting point. In a push to retain customers, you could send a reminder about the renewal, then if they don’t react or convert, the customer service team can make personal contact. This creates an opportunity to quickly retain customers in a less intrusive and inexpensive way, which may also provide a better customer experience.”
4. Data, the digital age’s most important resource
Data has become a valuable resource in the digital age. “A metaphor I like to use with clients is: data is the new oil. But unlike oil, data doesn’t run out. The data pool just continues to grow, and this big data can be converted to smart data that companies can use to take positive action,” says Marc.
The importance of data holds, especially with B2B interactions. B2B customer groups and profiles are often more complex, providing businesses with a more holistic view of customers that leads to better, data-backed customer engagement opportunities. Marcel shared his sentiments, saying: “There are some fantastic B2B use cases where rather than marketing to an audience that a small group of people has shaped based on desk research, profiles have been built on cluster analysis, regression analysis, revenue and cost data, to really find out who customers are, which are the most profitable, and where they are in the life cycle.”
Businesses can strategically target their marketing efforts and create stronger engagement opportunities at any stage of the funnel by utilizing CDPs for deeper, more insightful analysis. With the help of machine learning, businesses can gather more robust and holistic data to predict what customers want from them, provided proper groundwork is laid and campaigns have been tested and optimized.
5. Integrating with the right culture
Tools are only as good as the hands that wield them. The capabilities of CDPs are clear to see, but not every business will be able to maximize its full potential. Hence, it’s critical for businesses to have the right culture and mindset towards leveraging CDPs to benefit from their robust capabilities. Businesses must have a clear vision and mission for the implementation and activation of CDPs to reap their benefits.
“Culture eats technology for breakfast,” says Marcel. “I personally don’t believe in silver bullets per se, but I believe in customer centricity, which must be at the heart of company culture for those that want to benefit from a CDP. Implementation shouldn’t be driven solely by making a technological change, it should be to optimize the customer experience.”
To ensure the success of CDPs, businesses should assess and define what they want to achieve or improve with the help of CDPs. Businesses should consider engaging with a digital partner, especially for CDP first-timers.
Find out how you can harness the full potential of your data to grow your business by watching the full session.