Customer data, in particular first-party data collected and owned by the brand, is increasingly the foundation of delivering great CX, from acquisition to retention marketing, and across other channels, such as sales, service and support.
Data enrichment is the process of making that data better through third-party sources, where better can mean improved identity matching, higher addressability or additional demographic attributes to better understand each customer as an individual.
This richer and fuller understanding of a customer than was possible through first-party data alone can drive improvements across all aspects of CX, leading to increased revenue, lower acquisition cost and overall improved customer experience.
Secure a Data Strategy as Cookies Crumble
Justin DeBrabant, senior vice president of product for ActionIQ, an enterprise customer data platform company, pointed out as third-party cookies are going away, brands need to ensure they have solid zero-party, first-party and even second-party data strategies in place to ensure their customer data is authentic, scalable, fresh and accessible to the business users in a privacy-conscious, secure way.
DeBrabant said companies must start with getting their first-party data in order, as this is the most important and differentiated data set they have.
“They need to ensure it’s clean, accessible, accurate and scalable,” he said. “Next, companies can add privacy-centric third-party data sources that don’t rely on anonymous cookies to enrich their first-party data.”
Finally, companies can look to clean room integrations to add to their data sets validated second-party data, which is data from their retailer, brand and/or publishing partners.
Map Third-Party Data to Existing Records
Ian Clayton, chief product officer for Redpoint, a customer engagement and data management company, said "data enrichment is really an exercise of identifying a vendor and then mapping third-party information to existing records."
The types of data used in data enrichment could include geographic, demographic or psychographic information to continue to build perfected data. He explained deduping data will also result in financial savings, as third-party vendors charge on a per-record basis as well as limit/prevent duplicate data — particularly for the demographic and psychographic appends.
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Set a Cadence, Include Performance Marketing Teams
Clayton advised companies to set a strategy for how to work with third-party data enrichment tools. The most important aspect is to always protect the privacy of existing customers and only work with reputable vendors. “A critical aspect in working with vendors on trusted data, is to protect the PII [personal identifying information] required for the vendor to match the company’s customer record to their customer record,” he added.
They may also want to seek relationships where an escrow-like arrangement is available (e.g., a data clean room) so data exchanges occur with little or no PII required.
He said the cadence of data enrichment is also critical, building a strategy to enrich new and updated records as they come in and then a full refresh of all records on a regular basis (e.g. quarterly, semiannually, annually).
“Companies may have to navigate continued privacy regulations as they emerge,” he said. "Additionally, the sophistication and investment for marketers using data enrichment will also continue to grow — especially as the return on investment in data enrichment and data quality is felt by industry innovators.”
DeBrabant explained key stakeholders when it comes to developing a data enrichment strategy include performance marketing teams — sometimes called “paid media” or “acquisition marketing,” since they routinely seek enrichment of anonymous profiles to aid their retargeting efforts.
Other stakeholders include CRM/growth marketing teams, since they want to enrich their existing customer profiles to aid in cross-selling efforts, and analytics teams. “For the analytics pros, enriching customer profiles helps to increase the accuracy of their predictive models, given a greater number of inputs into those models,” he said.
Clayton said setting company-defined and agreed-upon goals is mission critical, with each stakeholder playing a role in determining the scope of enriched data.
“Marketing may need attributes that analytics doesn’t and vice versa, but that results in a superset of attributes," he explained. “The last thing enterprises want is a fragmented or multiprocess data enrichment."
He said once the strategy is set, data and IT can then logistically define what is optimized enrichment and cleansing that will meet the needs of the business.
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Understanding the Customer Through Data to Stay Competitive
Clayton pointed out that although the situations will vary from company to company (e.g., a retailer may have very different use cases from a healthcare provider), in today’s competitive marketplace with overall market uncertainty, every company can benefit from understanding as much as they can about each of their customers.
“Using data enrichment to help fill in missing gaps will help companies improve customer experiences at an individual level and ensure they’re reaching the correct segments within their larger customer base,” he said.
DeBrabant noted brands that deliver great CX do that by knowing and understanding customers at the individual level and tailoring experiences to those individuals.
“All of that is driven through data,” he said. "Historically, many marketers, especially on the acquisition side, have relied almost entirely on third-party data that was based on anonymous cookie tracking.”
However, with cookie deprecation looming, that is no longer possible, and many of the technologies, such as digital monitoring products, that enabled that third-party data strategy are being sunsetted.
“It also seems likely that even more stringent privacy regulations around data are on the horizon,” he added. “Because of this, it’s both critically important and urgent that brands shift to a first-party data strategy, augmented through data enrichment, now."