In an increasingly customer-centric world, the ability to access and gain valuable customer insights to shape products, solutions and the customer purchasing experience as a whole is critically important. For that reason alone, customer data must be seen as strategic.
For example, by pulling together rich customer profiles and rigorously tracking response rates, marketers can know precisely what types of content and over what channel are likely to have the greatest impact on the bottom line.
To achieve that, the Customer Data Platform (CDP) can not only be a key enabler, but also a marketer’s central knowledge store.
Historic view of customer value
As a CDP builds a single customer view, it also accumulates an historic view of all the visible customer interactions with the company, both online and offline. Over time these accumulate into an invaluable and extraordinarily rich data ‘reservoir’.
The ability to ‘fish’ in this reservoir via a CDP enables marketers to address some fundamentals, including:
- how much revenue is coming from existing customers, as opposed to new ones
- how much value last year’s recruits provide, compared with those from earlier periods
- dividing customers into cohorts defined by time periods or specific recruitment campaigns
- establishing the longer term value they bring to the company
In terms of sales, the data reservoir enables you to track the overall monthly trendline from year to year, and dig deeper into the areas that are showing the most potential. You can see if individual customers are spending more or less overall, or spending on particular product categories and, by using history to establish what the seasonal effects are, you can examine the underlying growth trends.
Impact of marketing
The CDP is also a valuable asset when it comes to looking at the true impact of your marketing campaigns on customers. It can help you answer key questions, including:
- what is the ROI for each channel for each time period?
- how are different groups of customers responding to individual campaigns and which ones are keeping their appeal?
- is the pattern of customer journeys changing?
- are customers putting more steps in the pathway and spending more time considering their purchase?
- are customers increasingly taking their own route to purchase and being less influenced by the campaigns you are sending them?
- are customers browsing for longer periods, or dropping more baskets
- is this the same across all customer groups?
Segmentation and propensity models
You can also use the data reservoir to build customer segmentations and propensity models – for example, the experience of some customers considered dormant to reactivate will provide the target variable for a reactivation model. Similarly, customer attrition can provide the target variable for an attrition risk model.
The algorithms derived from these models can then be reapplied within the CDP to score individual customers for retention or reactivation campaigns, or to predict next best actions.
So how best to access the reservoir and gain valuable customer insights?
How easy is it to access all this knowledge? Well, there are a number of different approaches that can be taken./ You can:
- use data visualisation tools like Microsoft Power BI or Tableau to provide a continuous dashboard of customer performance, with tables bespoked to your specific KPIs
- take a copy of the entire data reservoir and use data science tools like R or Python to answer specific questions and to develop predictive models and segmentations
- use out of the box capabilities for reporting metrics that have been developed inside your CDP.
Here at UniFida we have pre-packaged a large number of customer and marketing metrics within our CDP. For example, we provide multi-channel order attribution that allocates the value of each order back across the steps in the customer journey that led up to it. This means that we can report on the precise value contributed by each channel and each campaign, for any time period and across any segment of customers.
In summary, a key role of a CDP is to build a data reservoir over time to provide an invaluable and irreplaceable source of information about customer behaviour and marketing effectiveness. The reservoir should fill up naturally, and the marketer’s role is to ask the right questions and have the tools either built into the CDP, or applied externally, to obtain the answers.
UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.
Our technology focus has been to develop UniFida. Data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.
Marketing is changing at an explosive speed. Our ambition is to help our clients stay empowered and ahead in this challenging environment.