Improving Customer Experiences with a Customer Data Platform

March 10, 2021
EVP, Technology

If you ran a coffee shop business, you would encourage your baristas to greet customers by name, right? What are some of the traits of an outstanding barista? They call customers by name, know their customers' regular order, can make an informed recommendation, notice when a customer leaves something behind, and can initiate some friendly banter when a regular customer orders something new or has been absent for several days.

These small things add up and are ultimately the backbone of a business, building trust and loyalty toward your brand.

Nurturing Customer Relationships

While Customer Data Platforms (CDP) are a little different from the collective memories of the staff at your neighborhood coffee shop, we can draw some very important similarities on building relationships and customer loyalty. Building relationships is crucial if you're trying to build loyalty, but it doesn't happen overnight.

Brands earn loyalty with their customers as relationships evolve, grow, and they learn and listen to customer patterns and likes/dislikes. Let me explain.

Stages of the Customer Journey

Customers have varying expectations when it comes to connecting with your brand. When a customer is new to a brand, they're searching for information that pertains to them and don't yet know about your brand's offerings. They're in an initial exploration phase, deciding if your brand is credible.

As customers become regular purchasers, they know what to expect and start to form patterns when they engage with your brand. As the relationship with our customers matures, their behavior changes along with their expectations. For example, a retail customer may connect with a brand based on a passing craving, which, after a few repetitions, becomes a habit and in the best case evolves into a ritual.

In our example, the evolution of cravings to habits to rituals results in a loyal customer. With a CDP, we can know our customer, and our marketing department has the tools to tune the customer experience to where they are in their journey. A wide net is cast but as time progresses, interactions are tuned to improve the relevance of customer experiences, resulting in an increased customer lifetime value.

Don't Make Customers Repeat Themselves

Forgetting someone's name is a great way to say "I don't care about you." We want our customers to share with us, and when they do, we need to reciprocate. Customers should only be asked to share information with your brand once and have it be remembered throughout the entire relationship.

If they have to repeat their "story," your brand looks like a mindless robot that doesn't value their time or interests. This should be avoided at all costs, and leveraging a CDP platform helps tie customer information together and make it available in real-time to avoid this common blunder.

The Ubiquitous Customer Experience

Brands that know where their customers are in the brand journey can provide information the customer is looking for, exactly when they need it, regardless of the channel. Being able to communicate at an individual level is an essential element of developing customer loyalty.

Customers own multiple devices and are accessing your brand on multiple channels. By building a unified profile and linking devices with a CDP, we provide a seamless experience by delivering pinpointed content to customers regardless of the channel or where they are in their journey. The benefit is amplified at the point of sale, whether it's completing a transaction on their own device or weaving the experience into the retail setting via signage or a point of sale device.

Have you ever visited a museum and downloaded a docent app where you can listen to a virtual tour and reference the exhibit map? A mobile app can adjust the digital signage for the visitors in real-time as they walk through the museum. Based on past preferences, the app can guide the user to exhibits it knows they will like. If the app sees the user spending an extended amount of time at an Andy Warhol exhibit, it might just make sense to show an image of the Campbell's Soup skateboard deck that is available in the museum store as they walk out.

Through smart use of data, CDPs are able to help deliver a concierge experience, and in doing so, build loyalty.

Better Targeting of Paid Media

It doesn't take a data scientist to understand that if you show someone content they are interested in, they are more likely to engage. By leveraging customer data and machine learning, we can not only gauge the content a customer would be interested in, but we can also estimate their level of interest. That gives us a great way to calculate how much we want to spend on an ad impression.

To give an example, say that after doing a slew of research, your customer takes the plunge and buys the perfect slow cooker from your store. They feel great and are thinking about the delicious slow-cooked meals that will follow. They do a search on "Slow Cooker Recipes" and are greeted with an ad from your store with the cooker they just bought. Ouch! You just wasted your ad dollars and killed their post-purchase euphoria! Boo.

By maintaining customer profiles, we can use data science models to have the best next product recommendation ready when we need it. In the case above, maybe we would rather show them a cookbook. Or better yet, show it to them at checkout so it arrives with their appliance and we skip an ad spend entirely. Based on what we know about our customer's buying habits, an ad is unlikely to have positive ROI.

In some cases, we may not want to say anything at all. Identifying those who are not interested in an offer is just as important as identifying those who are. Take one of Bounteous' hotel clients as an example. We used a data science model on CDP data to determine who was not likely to act on calls to action or offers. As a result, the client reduced the ad spend by eliminating disengaged consumers from their efforts.

The use of data drives the individual customer experience. Every touchpoint should work toward improving a customer's experience, and if an interaction will be negative, it should be skipped. Your customers absorb a huge amount of content every day and overall, appreciate brands who don't waste their time with content that is not relevant to them.

Building Trust With Your Brand's Customers

Believe it or not, trust and loyalty, while intertwined, mean vastly different things when it comes to the customer journey and your customer data platform.

Loyalty is developed at the onset of a relationship and is generated from surface-level customer values. For instance, say your company is a big box, well-known brand. A customer might be loyal to your brand because you have everything they need under one roof, send items to their home quickly, and offer free shipping. However, while your brand does a healthy business by leaning-in on products and services, a customer might not actually trust you. Why not?

The answer: Sometimes brands move too fast and make customers feel like the brand knows a little too much about them. As an example, let's say your company sells blue light blocking glasses. A customer visits your website once, stays for a few seconds, then loses interest and leaves. Then your brand uses "remarketing" to market the glasses to this customer on their Facebook page, email ads, and Google Ads. The customer gets turned off. In this case, the hard sell your brand used got too familiar, too fast.

So how do we get the timing right? We see what works and do that.

In a game like tic-tac-toe, we can look at all the possible games and not make any moves that lead to a loss (spoiler Tic-tac-toe has 255168 possible games in total). The worst we can possibly do is tie. Marketing is more complicated than a game of tic-tac-toe but we can take a similar approach. We look at who had a successful experience (winning game) then use a look-alike data model we can deliver similar people a winning experience.

By using data effectively, we can leave our customer asking for more. Those brands create a relationship where they are confident of what their customers want and know when to rest. Then, when the customers need a product or service, they won't avoid you.

How CDP Earns Trust and Reinforces Data Security

Data regulations are here, and they're here to stay.

When taking the current and future state of data regulations into consideration, it becomes clear that if your brand wants to personalize marketing content, you will eventually need to manage your brand's customer marketing data. Though it is possible to use a patchwork of systems, this becomes an expensive and legal liability when it comes to compliance with customer data regulations. A CDP system has the tooling to address compliance regulations at the platform level.

58% of customers are comfortable with their data being used transparently, but only 63% say companies are generally transparent about how their data is used.

Browsers like Safari or Firefox pioneered stricter security measures and will severely limit the implementation of third-party cookies. Brands won't be able to buy customer data due to these stricter regulations, and this will result in a greater influx of enhanced first-party data security measures. Plus, regulations like General Data Protection Regulation and California Consumer Privacy Act are amongst the first of many regulations to come.

Brands need to own their data or they will find themselves at a distinct marketing disadvantage. By storing sensitive customer information and data, brands are accountable for security and compliance associated with that data. With a CDP, brands are less vulnerable to security and monetary risks. Their most valuable asset, the loyalty and trust they've worked so hard to earn with their customers, remains intact.

Providing Better Customer Experience

These days, data is everywhere. The premise of a customer data platform is simple—improve revenue by providing your customers better experiences. Data does this by providing a unified profile of your customers that is actionable in real-time and ensures your customer data is secure.

While getting started isn't that hard, it does require some coordination and updating a few processes. However, the results speak for themselves. Brands that effectively use CDPs have an uptick in marketing effectiveness, better trust with customers, stronger regulation of data, access to more accurate data, and data that is overall safer and easier to use. CDPs allow your brand to store data and process it into one place, then use that information to allow you to provide your customers with a concierge experience.

Which, in digital, is about as close as we can get to a barista greeting someone at the door by name, and that's good enough for me.