Why is it necessary to understand customer data?
Four ways getting a handle on your customer data will help you thrive in the digital era.
Reason #1: Meeting expectations
We’re in a relationship-driven economy. Whenever a large-enough brand improves upon a particular aspect of its relationship with customers, every brand is then accountable to new, higher standards.
Zappos did this with customer service. Amazon did this with shipping speeds and price transparency. Netflix and Spotify have done this with personalization. Every brand must live up to the highest standards of every aspect of the business, lest you risk disappointment, churn, and revenue loss.
CDPs make it easier to connect the dots between customer events and overall behavior to better strategize and deliver experiences at customer expectations.
Reason #2: Maintaining emotional connections
Centralized, accessible customer data is the only way to make informed decisions about serving each customer.
When someone clicks an ad or sees a commercial or buys a product, they implicitly suspend their disbelief. At that moment, they’re not interacting with a complex, global company that employs hundreds of thousands of people across time zones and even continents. No. They’re satisfying an emotional connection to the solution you provide to their problem. This feeling of personal connection is mission-critical to bringing in new customers and keeping existing customers loyal.
Suppose everything you know about a customer isn’t pulled together to create the fullest possible view. In that case, the disconnect will eventually come out in one (or possibly many more) of your communication channels. And when that happens, the spell breaks. Not only are those customers dissatisfied; they feel betrayed.
Reason #3: Increasing ROI across marketing
When your siloed data don’t communicate, and you can’t get a full view of the customer, you will inevitably waste spend targeting campaigns to the wrong people. For instance, customer acquisition costs typically suck up the lion’s share of media budget. Without real-time communication between a conversion event, dynamic segmentation tools, and end-channel orchestration, you could be pushing pricey top-of-funnel ads on an audience of new customers or recently churned customers.
On the other end of the cost-saving spectrum, seamless customer data makes it much easier to measure campaign-, channel-, or medium-specific ROI so you can flex spend up or down accordingly.
Reason #4: Built-in compliance with data privacy regulations
Because CDPs handle massive amounts of PII and other customer data, their technology and security practices must be certified as compliant with privacy laws. A considerable part of compliance is having complete knowledge of your data, sources, and destinations. This consolidation lets users verify, modify, or delete their profiles.
Without a CDP coordinating your vortex of data, you risk non-compliance. If a user modifies their account, those changes might not reflect in your adtech automation, your ESP, or customer service. Siloed or disorganized data directly causes instances of noncompliance. CDPs simplify your data intake and end channel coordination and simplify staying on the law’s right side.
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Table of Contents
- Chapter 1 Note to buyers
- Chapter 2 What is a customer data platform?
- Chapter 3 Why is it necessary to understand customer data?
- Chapter 4 What should a CDP do?
- Chapter 5 How do CDPs differ from other marketing tools?
- Chapter 6 What outcomes should a CDP enable?
- Chapter 7 Are there different types of CDP?
- Chapter 8 Choosing the right solution for your business
- Chapter 9 How does a CDP in my future look?
- Chapter 10 How to talk about a CDP within your organization
- Chapter 11 Additional resources