How Customer Data Platforms can Power D2C Brands Deliver Omnichannel Personalization
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How Customer Data Platforms can Power D2C Brands Deliver Omnichannel Personalization

Published : August 4, 2020
cdp power d2c

Don’t you as a marketer wonder sometimes that if data is the new currency how should you spend it wisely to get the best returns? Well, to start with, a lot of D2C brands are going omnichannel to enhance their digital presence. And to outlast the cut-throat competition from e-commerce giants, their focus is now shifting from in-store sales to creating cohesive user experience across all touchpoints.  

D2C brands are beginning to adopt the modern approach of using a consumer-centric mindset and the best way to do that is by using consumer data to derive marketing campaigns and Marketing Experience (MX).

And if data is your new currency, you have to have a safe place to store and manage the flow of your currency. This is where the Customer Data Platform (CDP) plays a significant part. It’s a crucial component of your omnichannel marketing technology stack that helps create a unified and comprehensive customer behavioral database.

What is a Customer Data Platform (CDP)?

As defined by the CDP Institute, “A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems”.

A CDP gathers data from your pre-existing sources, collates the information related to the same customer to create customer profiles, and tracks the behaviour over time. The data gathered by CDP can be in any form, structured or unstructured, and it can be used by other systems to analyze and manage customer interactions.

It empowers marketers to a level where they don’t have to depend on IT teams to manage and unify their data to use it seamlessly for their omni-channel and personalization-driven marketing campaigns. If integrated correctly, a CDP impeccably ‘talks’ to other systems such as CRM (Customer Relationship Management), analytics engine and marketing automation or campaign management platform.

Why is CDP important for D2C Brands?

Customers these days are getting the best possible online shopping experience from some of the best e-commerce brands. These brands make them feel that they know and care about their preferences and provide them unified, consistent and relevant experience across all digital touchpoints. These brands are setting some groundbreaking examples and raising customer expectations to a level that is difficult to meet for a lot of marketers.

Marketers are battling obstacles such as technology, budget, strategy, operations, and so on. Your customers don’t know about these challenges and they don’t care about them either. Most D2C brands, especially the established ones, can sought out budgets for CDP-powered omni-channel personalization tech stacks. 

No wonder creating a unified customer experience has become the top priority of D2C brands that are striving to compete with some of the best e-commerce giants. And you need to have unified data to create unified experiences for your customers. According to the CDP Institute, most systems, where data originates, are not designed to share it with other systems. A lot of traditional data collection and management systems fail to unify and organize data effectively.

Popular D2C  brands like Nike, Puma, Bose and Zara are yet to go full throttle on their omni-channel personalization strategy. They have the opportunity to take full control of their data unification from both online and channels. Based on parameters such as demography, geolocation, purchase history, preferred products, mode of payment and RFM, they can create a single view of customers to deliver true personalization experience to their customers.

How CDP helps bring data together to engage and retain shoppers

1. First, it collects data from omni-channel sources

Everything starts with collecting data from multiple sources such as digital (emails, website, App, social media, CRM) and physical (stores, call centers). This data can be structured or unstructured, personally identifiable or anonymized, and gathered in real-time to develop customer intelligence based on attributes like content consumed, purchase history, and interactions with marketing campaigns across channels.

2. Match data to the same individual

The smartest job, which CDP does and other systems fail to do, is matching data with each individual or customer profile. A lot of marketers still primarily target devices but if you want to stay relevant to your customers, you need to build your conversations and content around individuals. And CDP collects data for a people-based approach by linking information coming from different devices and channels to specific individuals.

3. Segment and Activate data for personalization strategy

Being relevant is the only way to form personal connections, and modern marketers are always questing to form a personal relationship with their customers. If you want to stay one step ahead of your customers’ needs and preferences, segmenting your data or customer profiles is of utmost importance.

Your aim should be to increase these segments based on past buying behavior, real-time browsing behavior, geography, demography, and devices. Marketers can use these segments to activate their personalization campaigns via web personalization, 1:1 marketing automation journeys, personalized product or content recommendations, and social media ads. Perpetual growth is inevitable if the potential of each segment is maximized through a data-driven approach.

4. Analyze and Optimize campaigns

Apart from efficiently collecting database, CDP also uses its intelligence to leverage data such as ideal customer profiles, intent data from CRM, demographics, campaign response rates, and so on to make it accessible to AI and ML algorithms. And build smart insights to predict how many more customer segments can be created and nurture those rich segmentsby optimizing or updating themfor your next big campaign or best product promotion.Simply put, your job does not end at knowing who your customers are, you need to act on the data you have gathered and behavioral insights that are generated about your customers. And CDP helps you bring that information into action.

CDPs also play a vital role in offering consistent and relevant customer support by bringing in all customer interactions done on different customer support interfaces such as chats, voice chats, calling data, emails, all ticket resolution at one destination. These interactions are then synced with data such as customer transactional value, overall lifetime value, and loyalty index. This allows customer support associates to identify best customers and provide them with the quickest possible solution.

How CDP helps D2C Brands deliver true Omni-channel Personalization experience

If you are a D2C brand, most of your data sources must be offline and the good news is some of the advanced CDPs are designed to use data efficiently from both offline and online sources, which was previously not possible. It is important for D2C retailers to incorporate previous offline engagements to build a complete customer profile and deliver a truly personalized experience.

Many marketers are under the impression that they strategize and deliver personalized communications to their customers on all the channels based on their activities and buying patterns. Unfortunately, such personalization efforts are siloed, meaning you are making decisions based on an incomplete view of your customers. Your personalized campaigns might not be consistent and relevant at all times and create a fragmented experience for customers while they navigate across channels and devices. However, CDP helps integrate all your channels together and gives a complete view of your customer interactions based on the real-time data it collates from your omni-channel sources.

It opens up a whole world of opportunities for marketers when they have a consolidated view of customers and their segments. And the best part is this information is accessible to the systems across your organization.

1. CDPs eases your effort to collect first-party data

D2C brands who want to go full-throttle on their omni-channel personalization should first tap into your first-party data trove as it is directly collected from your audience. Your first-party data is your lowest hanging fruit which includes email addresses, social profiles, geographic and demographics, data from website analytics, and customer support information. First-party data is simple to collect and manage with the help of CDP.

Once you successfully gather first-party data, you can then make use of your second (collected from partners) and third-party data (purchased data) and link it to individual profiles to create a more enriched view of customer profiles. 

2. Unify and activate data

Advanced Customer Data Platforms are powered to collect relevant data and help you to act on that data. As discussed before, gathering data is not enough unless you activate your data. So if CDPs unify your data in real-time, it means your D2C brand can deliver a personalized experience in real-time by leveraging the AI personalization algorithm.

Also, CDPs will allow your organization to implement both AI-led personalization (automated decisions such as web or app personalization) and rule-based personalization (marketer-led and controlled website customization). AI-led personalization will present dynamically individualized product or content recommendations by leveraging the power of predictive analytics.  

A 2019 personalization report says that “only 18% of marketers are extremely confident in their personalization strategy”.  So even with the right technology in place, a lot of marketers are not able to activate their data to deliver individualized customer experience. Your D2C brand can not only coherently collect data but also activate that data for omni-channel personalization.

3. CDPs are the center of all activations

A lot of organizations have database management systems that don’t sync with other activation methods. With a CDP as a foundation for all campaign activations, your marketing team can leverage this valuable feature of CDP to execute a comprehensive strategy across all channels to provide continuous relevance to your audience.

However, before taking the CDP route, your organization must have the clarity of business goals it wants to achieve, which should be improving customer experience. A strong strategy along with some use cases to improve customer experience will go a long way rather than adopting a shotgun approach of integrating your existing tech stack with CDP and then figuring out personalization strategy. This can lead to creating a poor quality database or data paralysis.

4. Build 1:1 relationship with customers

If you are a D2C brand, you are bound to have some loyal customers. And if you wish to build a loyalty program for your frequent buyers, you must be aware of their ever-evolving preferences. CDPs leverage advanced AI and ML algorithms of personalization platforms to collect data points such as clicks, search behaviour, eye-ball data, time spent, location, devices, product preferences and so on. It has the capabilities to create dynamic, always evolving, and a unified view of customers across channels and systems.

If you have all of this intelligence, you can always build content and offer individualized to each customer. You can send special offers, product updates, or product launch offers tailored to their preferences. For example, if you have launched a new product, especially of high-ticket value, you won’t blindly promote it to all your databases. You will rather prefer to promote it to your loyal or frequent buyers first and maybe provide them with a special price as your loyalty program. And that segment of your audience will be determined by a CDP.

A lot of new ecommerce platforms have revolutionized customer relationships and loyalty this way. They have successfully turned their data-driven customer insights into maximized ROI. This has changed customer behaviour and expectations forever resulting in fierce competition for both e-commerce and D2C brands.

5. Consistency and Relevance across all possible touchpoints

When you make customers experience your core strategy, it is important to stay relevant and consistent on all the channels your customers are using to interact with your brand. They might search about your product on your App or website, compare your products with other brands  on a tablet, or make a purchase via a targeted email campaign or visit your store to try your product. It’s important to deliver consistency, relevance, and personalized experience across all possible touchpoints.

This is where unifying your data with Customer Data Platforms pays off. It will track your customers’ interactions, map their journey and buying behaviour in real-time and help you understand their preferences, no matter which channel they use to interact with your brand. You can then make product or content recommendations tailored to the needs and preferences of each user.

This is what CDPs help you with

·  Unified and streamlined marketing orchestration from planning through execution

·  Unified customer profiles with cross-channel behavioral attributes

·  Identity resolution, device stitching, data enrichment

·  Ease of audience analytics, precision segmentation and targeting

·  Machine learning readiness (for content personalization and next-best actions)

·  Timely, contextually relevant, and optimally formatted messaging across touchpoints

·  Closed-loop analytics that informs segmentation and campaign strategy

·  Rapid response to changes in user behaviour across channels

  • Continuous marketing process improvement.
  • Increased conversion rates from more and better engagement across channels
  • Agility and overall speed to value.
  • Streamlined reporting and analytics
  • Effective data governance

Omnichannel technology Integrated with CDP

CDP helps modern marketers to succeed in their quest of delivering personalization by amplifying the value of their existing marketing arsenal.  The majority of D2C marketers are now adopting a customer-centric approach and focusing on data-driven personalization efforts. However, CDP isn’t a magic wand that will personalize your campaigns on its own and deliver results. Your data activation strategy will determine the quality of the customer experience you want to create.  

The complete customer view achieved with CDP when synced with your AI-powered automation and personalization solution, it results in more accurate and behavior predictions. The faster and better your CDP takes information from omnichannel sources, the quicker and more relevant your AI engine makes the product or content recommendations.

D2C marketers must invest in a comprehensive omnichannel personalization solution that allows them to integrate all channels and utilize a data-driven approach to impact customer purchase behavior and bottom-line metrics.

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