Why your data culture is a direct reflection of your brand

IDC research director shares the rise of customer data platforms as the key technology for connecting the enterprise-wide customer data dots for better personalisation and experience

The way brands treat their customer data is a direct reflection of how they’re treating customers today, IDC’s research director, Gerry Murray, says.

Murray spoke at last week’s Twilio CDP virtual event about growing adoption of customer data platforms (CDPs) and how they can increasingly provide the foundation for enterprise-wide technology and data management to drive next-generation customer experiences.

According to IDC, making customer data a whole-of-enterprise service is a “huge competitive pivot point for every company in the world”. The reasons are obvious. In IDC’s Future of Customers and Consumers Survey, 92 per cent of respondents said customer experience has great influence on future purchasing decisions.

“As a result, many companies are now leaning into concept of a broad-base, CX programs. Unfortunately, many default to the ideas of little use cases of CX and bits and pieces of it in separate departments,” Murray said. “That represents a collection of on ramps and bridges. It doesn’t lay the superhighway of CX or backbone required for the whole thing, which ultimately is your data infrastructure. If that isn’t right, all the on ramps and bridges might improve but they won’t deliver the holistic CX you’re looking for.”  

Murray positioned CDPs as one of the big tentpoles of that holistic CX strategy.  “We are moving into much greater performance KPIs as a result of having better customer data feeding more and more use cases across the enterprise. These are not just front office or marketing applications anymore either,” he explained. “This makes a CDP an enterprise resource, not just a departmental application.

“You can’t no longer afford to create little use cases or automation islands in departments. Everything has to be thought about in terms of holistic CX. The reason is customers hop around in different parts of the relationship and they’re expecting high levels of personalisation and privacy every step of the way.”

Murray noted most marketers and brand managers now understand data is all connected; as customers hit different touchpoints, they leave digital signals with each function of an enterprise. For marketing, such data may include sentiment analysis, ad clicks and video views; in commerce, it could be product tracking and identifying categories a customer is looking for as well as cart value.

“What you want to do is create a data halo that follows the customers all over the business,” Murray advised. “We are very familiar with the customer journeys – those are the bridges and on ramps. But it’s the shadow journey underneath this where we need to focus: We need to start tracking the journey the customer’s data goes on inside our enterprise. That is where a lot of the gaps, bottlenecks and delays take place. And that is the superhighway of the customer experience.”

Key to achieving this is enabling different department and functional systems to talk to one another. “We want to ensure every use case and interaction is capable of enhancing all the other interactions that might be relevant,” Murray said.

“If something happens in support, we don’t want to be sending the happy customer emails to that customer. But if data is not fast enough to move around and keep up with experience, you cannot inform the points of interaction fast enough.

“But data also has to be governed, compliant, with identity resolution and consent and compliance management – this all has to be baked into that data. And increasingly, you need analytics, insights and activation capabilities to send pay loads out to all systems to interact with customers in a highly personalised way based on all the previous and last interactions and make sure your operational response is based on all of these personalised insights.

“CDPs are increasingly emerging as the foundation technology for delivering this infrastructure. The whole design is a set of broad-based infrastructure services for use cases that serve multiple roles across these functions.”

In a study on the top 24 solutions in market, IDC research found CDPs are serving both technical and front-office user bases, from marketing and brand teams to marketing operations, IT, customer service/support, loyalty and data science and analytics.  

“CDP is a remarkably well-designed solution for doing both: The depth of the stack of capability; and breadth of use cases and roles data can be used to support. Plus they connect into hundreds of third-party systems,” Murray added.

This capability is critical to elevating personalisation. As IDC research also shows, being able to personalise interactions presents huge top-line revenue benefits, including 30-40 per cent improvements across qualified lead gen to conversion rates, CSAT and loyalty, repurchasing value.

“In order to get to personalisation, you need to integrate the customer data, bring together multiple application environments to understand the data and have meaning… You also need to make sure AI and machine learning is baked into whole infrastructure. And we need insights to move around as well, so when we have an interaction with a customer, we are bringing in the right pricing, region, customer status, loyalty, supply chain, promotions, inventory and more,” Murray said.

“Multi-dimensional signals from all parts of the business need to be put together in a way that can very quickly respond to customer’s activity…Then it’s getting to identity – assign all the behavioural and transactional signals to the right person or account.”

Brand imperative: Rethinking customer data use cases and personalisation

To build these enterprise-wide data foundations, Murray advised marketers through to CX managers to start thinking about how every customer use case their teams define includes a dimension of how this connects to the rest of the enterprise’s data ecosystem.

“How does it contribute and consumer different customer attributes in that environment? This is so you can start to make better use of the whole enterprise customer data record. It’s a really new and important practice of marketers and anyone in the front office,” Murray said.

Murray also stressed the importance of thinking about personalisation not just as the output of data utilisation, but how you collect data in the first place.

“Personalisation is a big deal, but as an industry we overweight our investment on the output part of the equation. We are very concerned about the exact pricing and subject line is right. Think about it as a broader part of the relationship with customers and an I/O process,” Murray said. “Customers are very sensitive about data collection for example, which is a critical part of the input process. Think about broadening the concept to include how you collect information on customers to present the magic moment of personalisation during the interaction part of the relationship. The more you do that, the more magical those moments become, as opposed to mysterious or potentially suspicious.”

Murray also made the point “data culture is your customer culture”. “How you treat your customer data is how you treat your customers. If your data is all fragmented, then the way you treat customers is going to be fragmented,” he warned.

“If you engage in surreptitious data collection and decide it’s your data, you may massively underestimate the amount of value customers expect back for providing data to you. You want to get into the virtuous cycle of data collection and delivering appropriate value back, being as transparent and explanatory to customers as possible.”

All this is crucial because ultimately, your data ecosystem is your brand, Murray said. “The data infrastructure articulates the level to which you have put in effort to understand the whole relationship your brand has with the customer,” he said.

“It’s immediately obvious to customers which brands are doing that and which are not. There are huge tech and data transformations going on, but there are also practice transformation and mindset shifts marketers and brand managers need to make as a result of having all this new tech and data capability at their disposal.”

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