Consumer trends that were already well underway have been pushed off a cliff due to the Coronavirus pandemic. Companies that perhaps were dragging their feet on digital transformation and a unified digital experience (DX) for their customers prior to the pandemic will need to accelerate their thinking and processes in 2020 to stay competitive, and in business.
Embarking on a digital transformation in order to serve up a unified DX isn’t just a technology discussion. A cohesive digital transformation encompasses the mindset, culture, processes and customer-centricity positioning that is required to implement and succeed in data-driven programs. Having the right people, skills, processes and attitude is critical to realizing ROI from your DX technology investments.
While there are multiple software and technology solutions required to tailor the digital customer experience (DCX) across the full buying journey, including DAMs to serve up assets, WCMs to tailor content and messaging, as well as a variety of personalization solutions, the foundational solution for DCX execution is the customer data platform (CDP).
A CDP gives organizations the ability to understand customers and prospects, across devices, locations and time for a holistic view, allowing companies to engage with people through personalized experiences at any point in their journey. While there are different niches assorted vendors and packages address, large global organizations should be looking for an enterprise-grade CDP to help them orchestrate customer journeys across all digital channels. Enterprise-grade CDPs provide the foundational functionality and tools that allow brands to fully deliver on the promise of personalized experiences at scale while protecting consumer privacy and data security.
In these unpredictable times, one thing is very predictable. The trend of consumer digital interaction will now become the primary way a customer interacts with a brand, and it is incumbent on companies to react appropriately to survive. Digital transformation and customer-centricity are no longer nice-to-haves and down-the-road efforts. Consumers who are stuck in their homes for an undefined period of time will increasingly expect more personalized content and better customer experiences, and they will expect brands to interact with them in the way they prefer. At the same time, customers and prospects increasingly want to make sure they can trust companies to fully manage and protect their data.
The challenge for marketers in the age of COVID-19 is to refrain from traditional one-size-fits-all push messaging and a hard sell. Marketers need to focus on building long-term relationships with their customers, and in order to do that there must be trust between customer and company.
Related Article: Why Your Customer Experience Strategy Needs a CDP
Customer Retention Is the New Acquisition
Any marketer knows there has been a tremendous increase in the cost of acquiring new customers (CAC) over the past few years. In just the past 5 years, the cost of acquiring a new customer has increased by 50%. This increase in cost is directly related to a few trends. First, people do not trust businesses as much as they used to, with 81% trusting their family and friends over a business. In addition, as more digital channels become available, and consumers increasingly use them to find the information they are looking for, the channels themselves become more expensive to operate and manage.
With acquisition becoming more expensive and trust dropping, businesses are shifting from acquiring new customers to retention of existing customers and focusing on life-time value (LTV). Enter the CDP for assisting companies in building that comprehensive understanding of the customer over time. Having this view will allow companies to tailor that users experience with relevant content and messaging, and to build a long-term relationship based on trust. If your goal is to increase customer retention and drive LTV to offset CAC costs, you will need a CDP to be successful.
A CDP Can Protect Customer Data, Building Trust
Security for CDPs, which by definition manage large amounts of dispersed customer data which may include sensitive PII, is not just about meeting compliance regulations like the GDPR and CCPA, which they certainly help with. Looking at it from a customer-centric POV, customers want to be in control of their data. They expect to provide consent for their data, know what is being collected, as well as how and where a company will use and share those data.
It is incumbent on organizations to balance the needs for customer privacy with data-driven personalization efforts. Staying away from invasive experiences and embracing value-driven experiences will allow companies to tailor the user experience to improve, and not erode, trust through personalization.
Look for a CDP with robust security and privacy measures so you can not only meet compliance regulations, but also be able to ensure customers that you put them first in terms of data privacy.
2020 will be a pivotal year for CDPs. As the pandemic accelerates the trend of consumer digital interaction, CDPs will jump into the spotlight as a need-to-have layer of the tech stack that every mid- to enterprise company will need to employ to keep the lights on.
Using an enterprise-grade CDP like the Arm Treasure Data CDP, organizations will be able to not only get insights from a holistic view of their customers, but also to engage those customers with personalized and relevant experiences, all while measuring those interactions to quantify return on investment (ROI). Marketers will be able to increase marketing efficiency by focusing more on retention and LTV of their customers. And with the right privacy and security controls, a CDP can help meet compliance regulations, as well as protect the privacy customers need to build trust with your brand.