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Ian Thomas
Managing Consultant, TCS Interactive.
8 December 2020

Abstract

According to Gartner, 80 percent of marketers will abandon personalization by 2025. On the contrary, personalization is only beginning to show its potential. The fact is that personalization, at scale, is very difficult, but it can be done with the right tool and the right approach.

The tool is the customer data platform, or CDP, which makes it possible to turn data into a better and fuller perspective of a customer, the first step towards true real-time personalization. The CDP ingests data from virtually any source to create ‘golden records’: highly unified and individualized profiles. Armed with this information and the insights that real-time, contextual data can reveal, the CMO is better equipped than ever to orchestrate multichannel communication, deliver a deeper, more personalized experience through the entire user journey, and accelerate conversion.

How can customer data platform help you deliver true personalization in real-time

You’re researching vacations in the tropics, and you start noticing banner ads promoting Ibiza or Florida or Hawaii. It doesn’t take a marketing genius to know you’ve been targeted using your search history. It doesn’t even take a marketing genius to know how to do this kind of rudimentary attempt at personalization. But this is low-hanging fruit – call it ‘Personalization 1.0.’ While it’s more effective than no personalization at all, it’s not that precise and not that granular. And, as we all know, this kind of personalization can go spectacularly wrong in ways that raise doubts, generate privacy issues, and cause real blowback to your brand.

If this kind of personalization were a tool, it would be a sledgehammer – effective but much too blunt to deliver a value-added marketing experience.

Marketers have long been searching for the holy grail: a way to personalize content and offers in real-time at scale, to create and serve market segments of one. We’re not there yet, but with the advent and maturity of the customer data platform, or CDP, we are closer than ever to real-time personalization and hyper-personalization.

Make no mistake: Personalization is the future of marketing, despite contrary opinions like the Gartner Group, which announced earlier this year that ‘80 percent of marketers will abandon personalization by 2025.

Delivering on the power and promise of personalization depends on three things: first, the ability to know your user (a prospect, a customer, or an employee) in minute detail; second, the clarity of purpose to turn that user knowledge into tactics and strategies; and, finally, the skill to execute those tactics and strategies in something close to real-time.

The winners in this new era of personalization will be the enterprises that are best equipped to take advantage of the enormous flow of data and put it to work in ways that add value to prospects and customers. The customer data platform offers the best approach to date to fulfilling the goal of turning the enterprise into truly a data-driven, customer-centric business and enabling the delivery of next-generation customer experiences (CX).

The rewards are enormous. According to Forrester ‘insights driven companies grow 10 times faster than the global economy, with average annual growth of 27%.

From Buzzword to Juggernaut

People began hearing about CDPs back in 2013. By 2018, CDPs were at the peak of Gartner’s hype cycle. But what may have seemed like hype in 2018 has now become a high-growth sector: Sales of CDPs are projected to total $2.4 billion this year, growing to $10.3 billion by 2025.

Here’s why: The CDP makes it possible to turn data into a better, fuller perspective of a customer, the critical first step towards true real-time hyper-personalization. The CDP ingests data from virtually any source to create ‘golden records’: unified, individualized profiles. Armed with this information and the insights that real-time, contextual data can reveal, the CMO can orchestrate multichannel communication, deliver more engaging, more personalized experiences across the entire user journey, and accelerate conversion, the key to driving growth and improving the bottom line.

The challenges for the CMO are choosing the right CDP and equipping the platform and the enterprise for success. When you consider the crucial point of ‘equipping for success’, don’t think of the customer data platform as the tool for delivering personalization; think of it as the tool for enabling it. A data platform is only as good as the data ingested. So a company wide data strategy needs to be embedded. A customer centric organization culture is a bare minimum with customer journeys clearly defined and cross functional product teams formed to guide the customer through their unique personalized journey with the brand. By return, the customer’s personalized experience is determined by the consumption of content (text, imagery, video, and sound) throughout their journey. This demands content velocity to keep pace with data velocity and is a challenge for even the largest content team (after all what is the point of being able to distinguish between two distinct audiences or individuals if they are served the same content). As customer journeys are distinctly omnichannel and no longer linear, the final piece of the puzzle is to have a martech and adtech stack that executes the insight created by the CDP and can deliver the right message at the right time in the right channel. All of these levers need to be addressed and aligned to business objectives and prioritized use cases to deliver significant ROI from a CDP investment.

The ABCs of the CDP

  • A CDP is ‘packaged’ – prebuilt, then configured to meet the needs of a user. A CDP ‘creates a persistent, unified customer database’ – persistent in that it tracks behavior over time and unified in that it captures data from multiple systems to create a 360° view of your user.
  • A CDP is ‘accessible to other systems’ – so that you can use CDP data with other tools for analyzing and managing customer interactions.

These attributes differentiate the CDP from both digital marketing platforms (DMPs) and customer relationship management (CRM) platforms.

A CDP serves up customer experience data that a CRM system can then execute. As the below illustration shows, only the CDP delivers all the functionality required for data-driven personalization.

 

A CDP captures all the data generated whenever and wherever a customer interacts with your brand: from your website and mobile apps, all your advertising channels (including email), plus your CRM and payment systems. That’s the 360° view.

Here’s why the 360° view is so important: It is complete. Say, for example, you have a good customer, someone who buys your product or service, more than once, and is very happy with how it performs. But that customer has had a bad experience with your service department or with their account or billing. To that customer, your brand has just been tarnished, significantly, in ways that are not related to the product itself. If you market to that customer without being aware of their bad experience in the extended enterprise, you risk more than just losing a sale. You risk losing that customer and the damage an unhappy customer can inflict through social media.

Putting the Pieces Together

Thanks to the CDP, we now have at our disposal truly humongous data, notable for its volume and diversity:

  • Identity: Name, address, IP address, phone number, device ID – any data that allows an individual to be uniquely identified.
  • Descriptive: Geographic and demographic data such as location, life stage, career, family status – any data that goes beyond identity to better understand a customer’s habits.
  • Behavioral: Clickstream data like page views, ads clicked, emails opened, etc., plus offline data such as store visits, service calls, etc., – any data generated by a customer when interacting with the company either through marketing or through use of the actual products and services.
  • Qualitative: Sentiment analysis – any data that speaks to the state of mind of the customer or user and how they feel about your brand and/or the world at large; typically, this is gathered by surveying social media interactions and increasingly voice channels (e.g., Alexa and call centre interactions).


The CDP excels at transforming these disparate data points into cohesive customer profiles for known users and can even profile ‘anonymous’ users. The platform applies standards to make sure the data you’re collecting is correct and compliant. This means you can diagnose data quality issues and get it production-ready before you decide to act on it.

When you use a CDP, you get the marketing equivalent of a superpower: You can see all the activity, from any channel, online and offline, in a single place. The CDP sees everything and ties everything together, but it must also connect to your other marketing tools that drive engagement, loyalty and lifetime value. And you must use this capability in accordance with legal requirements and your own compliance protocols.

Context is Everything

When you use a CDP, you have an enormous amount of contextual data that helps you make better marketing decisions. How valuable would it be if you could answer these questions?

  • What product did this customer buy before their current purchase?
  • Which segments/target groups does this customer belong to?
  • Is this customer likely to churn?
  • What have they shown interest in lately?
  • What is their (purchase) intent and timing?
  • What is the value and predicted future value of this customer?
  • Where do they prefer to interact and create moments?
  • What are their preferences and where are they in the customer journey?


Ultimately, by delivering the ability to answer these questions, a CDP provides the CMO team with a holistic view of the customer to help execute and optimise personalized journeys.

If the answers to questions like these would be valuable (and of course they would), then you should consider a CDP. The more challenging questions are: Which CDP do you choose? And whilst every company has different needs and marketing maturity levels there are five accepted MUST HAVES for a CDP.

  1. Unifying data to create a single view of the customer
  2. Enabling personalization by creating cohesive, relevant customer experiences across all customer channels
  3. Ensuring data governance/compliance for building brand trust and avoiding regulatory issues
  4. Standardizing and making data ready and accessible for ML and AI applications
  5. Leveraging a complete set of interaction data for deeper customer insights


As discussed earlier there is no magic bullet or out-of-the-box solution to address the challenges of personalization and hyper-personalization. But for the first time ever, the technology to get started is out there. Time to put it to work for your enterprise and join the CX leaders reaping the benefits of data driven marketing.

For our vendor agnostic view on how to unlock the power of data through a CDP please contact us.

About the author(s)
Ian Thomas
Managing Consultant, TCS Interactive.

DMA Awards Judge 2019 & 2020

Ian is a passionate advocate of data driven marketing with over 20 years’ experience across client, supplier and consultancy sectors. Bridging the gap between art of the possible and science of reality and with hands on experience of delivering business value through data driven marketing he advises our global clients on best practice marketing strategy and execution.

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