Why a Customer Data Platform is the Missing Link to Unlock Massive Customer Loyalty

Why a Customer Data Platform is the Missing Link to Unlock Massive Customer Loyalty A tremendous amount of data is wasted every year.In fact, Forrester estimates that 60-73% of all data within an enterprise goes unused. Valuable insights remain hidden in spreadsheets while managers make decisions based on limited information and vanity metrics.It’s not that most companies want to ignore the data that is offered to them.Data is the new oil â€" companies collect millions of data points and hoard them to better understand their customers.However, most of this data is disjointed or siloed.A set of data that gets ignored by one team will be desperately needed by another. Data is wasted when teams aren’t able to gain full access to their various metrics and use them to their best potential.The results of this wasted data are poor marketing campaigns that never reach their full potential and employees who need to work twice as hard to reach their revenue and ROI goals.If only there was a centralized location where every employee and stakeholder could look at multiple s ources of data and use these interactions to glean meaningful, unified insights. If only there was a way to manage customer data on one clear platform.There is. And developing a customer data platform for your company will change how your team makes decisions to improve your marketing mix and customer loyalty efforts.WHAT IS A CUSTOMER DATA PLATFORM?Before you can dive into the value that a customer data platform provides to customers and the connection between customer data and loyalty, it helps to define the terms that we are talking about.This is notably important because the concept of a data platform is often overcomplicated by companies that really just need simple data solutions.A customer data platform is a central hub that connects all sources of data (from first and third party sources) in one location.This platform gives marketers a complete view of their customers, their business performance, and their promotional opportunities. With a clear view of the data, marketers a re better able to make decisions based on facts.Too often, companies have a disjointed data management analytics system.The social media reports don’t align with the data from Google Analytics, which can’t connect to in-store data or third-party research that provides industry benchmarks.As a result, teams spend hours pouring over various reports, trying to draw one conclusion with one set of data while hoping it isn’t disproven with the next set.A customer data platform ensures that all data is unified and accurate.Also, by keeping the data in one central location, it creates a single source of information that the entire team can turn to for information.HOW TO USE YOUR DATA PLATFORM TO UNLOCK CUSTOMER LOYALTYCreating a central hub for data management will completely change how you make decisions within your organization. It has the power to significantly improve your marketing and customer care efforts.There are definitive, measurable benefits that you can track to prove the value of your investment.When you can use data to better connect with your customers, then you can provide better messaging at better times. This leads to happier customers and higher conversion rates.Below are just a few applications for your customer data platform that will improve your overall customer loyalty. You can track improved engagement rates and ROI to notice how your promotional strategies improve.This can justify your investment in the customer data platform while proving the value of your marketing investment â€" when the programs are running at their maximum potential.Create Better User Profiles to Understand Your CustomersTapping into your vast pools of data will help you get to know your audiences and the customers who buy from you.Beyond typical demographics like interests and socio-economic status, you can start to create clear profiles of what your shoppers want to buy, why they need your products, and what causes them to buy from other brands.This insight into your customers is invaluable and can help you create brand messaging that really resonates.Too often, brands are disjointed between what they think their customers want (or who their customers are) and what they actually want. They base this information on their brand vision or on old insights that have changed over time.The result is a tone-deaf marketing message that isolates target customers while bringing in the wrong audiences.This can lead to drops in sales and even long-term damage to how the brand is perceived.Consider the video above, created by stock footage company Dissolve. The Generic Millennial Ad focuses on stereotypes and highlights the nature of tone-deaf messaging based on limited demographics and research.While this video is a fun parody, it highlights the very real nature of brands that try to connect with audiences without real investment in data and research.Not only can data provide factual insight into your customer base, and help you better develop audience personas, it can also adjust and adapt to smaller changes in your audiences.Your customers change over time. They grow out of your brand and new customers walk in, with different ideas, values, and interests. For example, the millennial generation isn’t in college anymore. That’s Generation Z.Most millennials own houses, have kids, and are in their 30s. If you have been targeting “millennials” since they first started graduating high school, then your target generation has changed. Following these changes and adapting allows you to pivot your messaging to stay relevant in today’s highly-personalized digital world.All of your data sources (both from first and third-party sources) work to create your user buying profiles. Think of your customer data platform as a painting of your customer.Each set of data makes the painting more clear, by adding new colors and textures. When all of the data comes together, the painting is vibrant and clear. Without a unified data system in place, you can’t get the full picture.Use Personalization in Your Suggested ItemsThe next generation of consumers is more comfortable than ever with personalized marketing messages.The team at Conversant found that 87% of customers age 25-34 are “very likely to shop at a retailer if they are given personalized offers.”More people understand that if they exchange their personal data with a company, they will receive better-targeted ads and will have a better browsing experience.Image Source: conversantmedia.euDespite this willingness to receive personalized content, few brands are taking steps to use customer data platforms to improve their marketing efforts.Roughly 65% of consumers say brands send them too many irrelevant communications.This includes emails sent right after a purchase, emails promoting items they don’t need, and general messages that turn off customers and make them tune out your brand messaging.A customer data platform better connects user behavior across m ultiple channels and purchase paths.This means that the items your customers see are more likely to be the ones they want to buy.Bring Customers Back Into the Buying CycleUsing the data you curate to learn about your customers is only the first step when developing a customer data platform.The next step is to put your data to work and take action to improve loyalty.One of the most powerful ways you can use your data is to market to customers in a way that brings them back into the buying cycle.All brands have three goals with customer retention:Bring new customers back to turn them into loyal shoppers.Increase the frequency and average tickets of existing loyal shoppers.Prevent customer turnover.With relevant, targeted messages, you can achieve all of these. Your marketing efforts can prevent customers from forgetting about your brand or turning to your competitors â€" reducing turnover.High-quality marketing can also keep new customers engaged and eager to see what else you can off er them.The sweet spot, however, lies in engaging existing customers to grow their value to your brand.As you implement strategic marketing plans based on data, you can watch your customer lifetime value (CLV) increase. Your CLV refers to the number of purchases and average order value per purchase for customers over time.For Victoria’s Secret, if the average customer spends $75 per visit and shops there quarterly, then the CLV is worth $3,000 over a decade. If the women’s lingerie company can increase the AOV to $100, then the CLV jumps up to $4,000.While this is a simplified example, you can see how improving your marketing efforts through better data analysis can have a significant impact on your revenue.If Victoria’s Secret applies this single customer example to their entire consumer base, they would see how small drops in frequency or a lower AOV could be devastating for their business.Improving your data management efforts isn’t just about keeping customers loyal and engaged, it’s about keeping your business afloat.Improve Retargeting With Better Behavioral MetricsOne strategy that brands use to create better marketing messages for customers is the use of remarketing and retargeting content.Retargeting emails and abandoned cart triggers are incredibly popular in the eCommerce world â€" and for good reason.With an average cart abandonment rate of 79%, brands can significantly grow their sales if they can bring back even a fraction of those lost customers. Abandon cart emails are also often successful.SaleCycle has found that abandoned cart email open rates hover around 43% for most sectors â€" and have a conversion rate average of 2.9%. Marketing to lost customers is easier and more affordable for brands than starting fresh with cold leads. Image Source: blog.salecycle.comHowever, abandoned cart email triggers require specific customer behaviors. Customers need to be logged-in to their accounts and they need to add items to their carts before abandoning them.Better data, however, can change this. Today, brands are investing in retargeting through product views, rather than abandoned cart messages.Only a limited number of customers on your website add items to their carts.However, the vast majority (most of your customers who don’t bounce) at least look at products before they leave.Modern data can track the behavior of customers and send recommendation emails based on the products viewed, even if they were never added to the cart.Immediately, this exponentially increases the number of re-engaged customers, but that’s not the only impressive part.Behavioral data can sort customers and identify the ones that are most likely to buy while showing them a few top product options. A few metrics your retargeting tool might use include:Length of time spent browsing various products.Top products viewed (duration viewed, clicks on the product page, reviews read).Similar products viewed while comparison shopping.Past buying behavior and products bought.While the number of customers you reach increases by retargeting customers based on products viewed, the quality of email content ensures that your marketing efforts are profitable and drive results.Fill in the Gaps of Offline Interaction and Connect Buyers Across DevicesWhen a customer walks into your store, makes a purchase in cash, and walks out, do you know who they are and what they purchased? Can you link up their current purchases with the ads they saw the day before? Can you compare their purchases this time with past purchases with your brand?With a strong customer data platform, you can.By connecting multiple sources of data, you can better understand the behavior of your customers with clear insights â€" even if they go offline or switch devices during the buying process.For example, you can compare your internal data of the items sold with items that your customers browsed online the day before.You can use store conversions in Google Ads to see which customers took action after browsing online. You can also compare the tickets of certain customers with other similar buyers (with past buying history and demographics) to estimate what that person likely bought in the past.Suddenly, an in-store sale provides a window into that customer’s behavior and allows you to learn more about the person walking into your store.Using data to identify cross-device behavior is becoming exceptionally important.Signal reports that the average consumer owns four connected devices and uses at least three of them daily.Unfortunately, most marketers only connect with customers on one device and lose them completely once they go offline.“And this is a problem. Because devices don’t shop. People do,” they write.Your customers are not about to simplify their browsing behavior to appease your marketing team. You need to meet your customer demands if you want to communicate with them effectively.This means unifying your data sources to create a platform where you can understand user behavior across devices, locations, channels, and any other divide that a user might cross during their buyer journey.Reduce Irrelevant or Repetitive Marketing MessagesAll of these efforts to improve your marketing and grow your customer loyalty boil down to one idea: you want to send the best marketing messages possible to your customers when they want to see them.Irrelevancy is the kiss of death for marketers in a world of strategic marketing and digital communication.According to SproutSocial, 41% of customers will unfollow a brand on social media because the information isn’t relevant.This is the most common reason beyond the brand posting too many promotional messages (46%).Image Source: sproutsocial.comThe company writes that the “A nnoyance Factor” is real. Users will unfollow a brand if they post annoying (irrelevant, tone-deaf, repetitive) messages that they don’t connect with.Outside of the social media world, these unfollow actions come in the form of high unsubscribe rates, lower website traffic, and dropped organic rankings as customers actively avoid your brand.At the bare minimum, your company needs to invest in data insights to reduce customer turnover.What starts as a defensive maneuver to prevent customer loss can eventually grow into a proactive motion to improve loyalty and increase the number of purchases each month or year.BENEFITS OF A CUSTOMER DATA PLATFORM FOR YOUR BUSINESSAlong with the measurable, targeted benefits of adding a data management platform to your business, there are also smaller benefits that you may notice within your internal operations.While these benefits are less tangible, you will notice that your teams operate smoother and your coworkers are on the same page more oft en.This is because everyone is looking at the same data sources and drawing similar conclusions.With a disjointed data system, each employee relies on the information that is available to them.Your paid search team uses their Google and Bing ads interface and Google Analytics results to come to their own conclusions.Meanwhile, your SEO, social, and in-store marketing teams each have their own analytics systems that they turn to.No one is able to take a high-level view of the customer and consider the buyer’s journey as a whole.However, once your data sources come together, it is easier to look at your audiences as whole people who travel through complex buying journeys, rather than snapshot customers who either converted or didn’t.This whole customer view keeps everyone on the same page. You can focus more on moving customers forward and meeting their needs and less on who has the right data or the best insights.BUILD YOUR OWN CUSTOMER DATA PLATFORMAs you start to understand the benefits of having a data management platform to your customers, your revenue, and even your internal operations, you can begin to identify what your company is missing. Where does your data become disjointed? Where is the data misaligned or missing entirely?These are hints that you can follow to identify problems with the data processes that you need to solve in order to grow your data maturity.Building a customer data platform starts with data identification.Once you have the data you need, the next step is to connect your sources into one hub.The final stage of data management comes with data sources that work together in a centralized hub and are easy to understand, analyze, and adjust.We recommend you start with a data maturity assessment to see where your company is within this process and how far you need to go.If your company is one of many that wastes 70% of their collected data, then it’s time to take control of how you collect and analyze information.The more informati on you are able to use and review in a clear manner, the better informed you will be as you make decisions for your customer, not just for your brand. About Author Craig Smith is the Founder of Trinity Insight, an optimization agency that helps brands grow faster online. Craig started Trinity in 2006 and prior to that worked as a strategist for Ebay Enterprise.   Craig is a frequent speaker at eCommerce events and guest lectures at NYU and Villanova on optimization business concepts.