Over the past year, the COVID-19 pandemic has caused unprecedented shifts in consumer spending. From Q1 to Q2 alone, online user acquisition increased by 60 percent — compared to a pre-pandemic 15.5 percent increase from quarter to quarter. Further, 83 percent of consumers say they plan to continue online shopping even as the world opens back up. (1)
With all that online spending comes a wealth of new customer data companies will be acquiring. But getting data and putting it to actionable use are two very different things. Companies might acquire data on consumer spending habits, but not have the technology in place to turn that data into actionable insights.
Companies also want to be smarter about their data. Common concerns include being able to know with some certainty how to reach a specific group, what offers are more enticing to customers and how companies can be more efficient with their marketing spend.
With so much consumer spending moving online, companies should look into customer data platforms (CDPs) to generate those actionable insights. While CDPs haven’t yet entered full mainstream adoption, Gartner expects them to do so within the next two to five years. (2)
What are the key deciding factors to acquiring a CDP? Companies should invest in a CDP if they collect a great deal of data from different sources (both anonymous and personally identifiable) and in different formats (structured vs. unstructured). Using a CDP allows companies to use the data they have to gain a unified view of their customers — regardless of how and where they engage.
Customer Interactions: Engage to Retain
Over the past six months, companies have been strategizing about the best ways to engage with their customers. Online shopping is increasing, but companies who had little digital experience before the pandemic are feeling the pinch. Also, just because consumers are going online doesn’t mean they’re buying the same brands they do offline. Research suggests that customers acquired during the pandemic have an 82 percent lower retention rate than those acquired before the pandemic. (3)
To retain customers, companies must meet customers where they are, present the most pertinent offer at that moment, and serve them in a manner that’s the most convenient for them. By importing data from all relevant sources into a CDP, companies can make smart decisions in real time and drive marketing campaigns that will develop customer loyalty. Gartner identifies such real-time marketing strategies as having a transformative benefit to businesses. (4)
The more companies understand who their customers are, the better they’re able to personalize the buying experience. One of the major advantages to a CDP is the ability to market to customers at the right time with tailored, personalized messages and offers. This makes CDPs the perfect solution for companies whose customers value personalized interactions, such as retail, entertainment, personal care products, gaming or life sciences.
Another advantage of a CDP is its ability to be useful beyond marketing. Customer interaction with your brand doesn’t end at the sale; customers often return to interact with other departments such as customer service. By centralizing disparate data, the CDP can create customer personas, which then can be shared to different business lines. If a customer gets in touch with customer service over an issue or question, they expect their problems are known. Customer service can benefit from CDP insights by having the knowledge of that customer — what they’ve purchased, how they like to be contacted and why they interact with your brand.
Build Trust by Protecting Customers’ Privacy
Attitudes around data privacy are changing, both at the consumer and the business level. “We’re seeing a shift toward more data privacy on several fronts,” says Thomas Kurian, director of industry solutions for Treasure Data. “Stricter privacy measures are being driven partly by regulation and partly by consumer interest. In this environment, technology companies are doing all they can to meet these stakeholders’ expectations. In the future, the companies that put privacy first will build more loyalty and trust over companies that don’t.”
With the passage of GDPR in the EU and CCPA in the United States, privacy awareness is increasing and stronger regulations are on the way. The announced sunsetting of cookie technology means companies are scrambling for the best way to gather customer data. (5) As they do, companies not only need to change their attitude around privacy, they must act to ensure they comply with various regulations.
Forward-thinking companies should invest in technologies and partners that prioritize customer data privacy. In doing so, they demonstrate their commitment to customers, which can instill goodwill and improve brand reputation, potentially affecting the customer lifetime value. “We’re moving into the era where privacy is a right and customers will only engage with the brands they trust,” says Kurian.
Increases in customer interactions and the proliferation in the number of devices customers use to interact with brands are jointly responsible for the growth in the CDP industry. As customers spend more time shopping online, companies can gather data and use it to create crafted messages that will aid in customer acquisition, engagement and retention.
Such insights aren’t possible without a well-designed CDP. With the ability to aggregate customer data and generate real-time insights, CDPs will be invaluable in the coming years. By understanding your customers, companies have the ability to craft tailored messages and develop brand loyalty — which will be necessary for the future.
Learn how Treasure Data’s CDP can help your business at treasuredata.com.