Adoption of customer data platforms (CDPs) has really taken off in recent years, especially in retail. There are more than 9,000 marketing tools and platforms available today, and that number is growing annually. As more vendors have introduced CDPs, it’s created quite a bit of confusion about what constitutes a CDP and the breadth and depth of capabilities offered (and frankly, required). Some of the complexity lies in determining which CDP functionality retailers need to power use cases in terms of real-time decisioning, data handling, identity management, privacy compliance, and related services.
At their most basic, CDPs address the need to create a single customer view across data and marketing channels. This is especially important for retailers given omnichannel shopper journeys and path to purchase and the pending deprecation of third-party cookies. CDPs enable real-time personalization and can help retailers’ marketing organizations tackle the transition to an environment without third-party cookies, particularly when it comes to prospect and acquisition marketing. Retailers typically adopt CDPs for three key reasons: (1) customer data collection, analysis, ingestion, and integration, (2) marketing, advertising, and activation, and (3) real-time personalization.
To get the most from a CDP, retailers must first define their use cases and then determine how a CDP supports their data strategy, marketing goals and business objectives. More importantly, this is essential to helping them decide which CDP is right for their use cases and the customer experience they want to enable.
Here are four tips for retailers to consider as their start or continue their CDP journey.
1. Double down, no triple down on defining use cases.
It’s critical that retailers understand exactly what they’re hoping to achieve with their CDP and how they will measure success. Without this step, CDP efforts will fail. It’s like hopping in a car with no idea where you want to go. There are many use cases a CDP can support. Here are some of the top ones:
- Personalization – deliver relevant content in real time
- Remarketing – target instantly based on relevant behaviors
- Product recommendations – predict products customers are likely to purchase
- Scoring – segment in the moment for real-time experiences
- Conversion optimization – help customers complete purchases
2. Clean up data.
A CDP can only deliver value based on the prescribed use cases and the data loaded into it. If a retailer’s first-party data isn’t clean, correct, and normalized, its efforts for personalization will fall flat. As much as 2-3% of consumer data degrades each month, meaning 25-35% of customer and prospect files likely won’t be accurate a year later. Bad data leads to inefficient marketing and wasted marketing spend. Quality data regularly goes through data hygiene. It has been standardized, updated and is void of duplicate information. It is correct, complete, and current. And it’s never a one-time thing. Going through a quarterly data hygiene review is key to maintaining accurate contact records and achieving customer centric personalization.
3. Strengthen the identity spine.
Identity can be one key area of weakness for CDPs. They create identities via customer interactions and stitching behavioral data across connected channels for a moment in time. They are not intended to replace longitudinal data and databases, but rather, to bring the right data together in the moment to power a decision or interaction. By itself, this simplistic approach to creating a single customer view is often incomplete and inaccurate, undermining performance over time. The basic concept of householding, for example, is alien to most CDPs. So, unless a brand connects the dots from real life to digital behavior, it can lead to marketing that ignores the overall opportunity spend in a category, life stage considerations, and lifestyle factors that may be vital to maximize return on marketing investment. The result would be ad bombardment that is incongruent and misdirected. Retailers can overcome these challenges by using outside identity resolution technology with enriched personas to increase customer intelligence accuracy.
4. Don’t go at it alone.
Over the past few years, many brands flocked to CDPs to power real-time personalization and to reduce martech infrastructure costs. Unfortunately, many have found their CDP implementations cost more, took longer, and have not yielded the expected or desired lift in performance. We recently commissioned market research to explore the challenges marketers around the world face with regard to personalization and CDPs. In response to research, 98% of respondents said they’ve experienced significant challenges in implementing a CDP. The challenges most commonly faced included upskilling the team, the investment required, and the wider use of CDP insight across the business.
CDPs have the potential to create enormous value for the retailers that use them and the customers who interact with them, especially in digital channels. But no single tool or platform can solve all the complex challenges retail brands face. To be successful, retailers need to have a marketing strategy that is powered by proven omnichannel solutions, and CDPs can play a key role. The most successful retailers will rely on experienced partners that have the expertise to orchestrate data between digital and offline environments.
To learn more, visit: https://www.acxiom.com/trusted-advisor/ or contact us at [email protected]
