Top 8 ways a CDP can make you a better customer marketer

CDPs – Customer Data Platforms – are often just evaluated from the viewpoint of facilitating
timely, relevant and personalised customer communications. Properly configured, a CDP can
also hold a complete history of every customer interaction, from online to direct mail,
opening up very valuable insights into customer understanding.

Here are the top 8 ways a CDP can help you better manage your customer marketing:

1: Measuring how each and every aspect of your direct marketing is performing.

Having every customer touchpoint in place leading up to each of your sales is a critical
requirement for delivering customer journey-based marketing attribution. This works best
when you have a scoring system in place that can share out the value of each sale across the
touchpoints that lead up to it, according to the contribution they make. In this way you can
not only compute the value of each of your online and offline campaigns, but also look at
how different customer groups, for example new vs. existing customers, are impacted by
your marketing activities. And you can start to look at how each channel performs in
different seasons.

2: Knowing the longer-term value of customers recruited through different channels and via different campaigns.

Longer term customer value varies hugely across the different types of customers you
recruit and different channels will attract different types of customers. So, assuming you
know how a customer was recruited, you can start to understand what their longer-term
value is likely to be. This can be problematical where several channels are involved in a
single sale, but you can look at the longer-term value of all the customers gained via a
particular channel or campaign. You can also drill down further and differentiate customers
by other criteria, such as previous relationship with your brand, geography, or even age
band. Understanding customer longer-term value allows you to set maximum costs for
acquisition and get a better understanding of the returns from marketing investments.

3: Predicting lapse levels and lapse timing for subscription products.

Anyone selling a subscription product, whether it be an insurance policy or a magazine, will
know how vital it is to recruit and retain ‘sticky’ customers. Fortunately, the data residing in
your CDP should allow you to model retention with a great deal of accuracy. This is because
you will be holding not only the payment records of each subscribing customer, but also a
great deal of information about them. There are several statistical methods for doing this,
but we tend to use CHAID as it divides customers up into identifiable groups with different
expected levels of longevity. Your historic data can also be used to show what proportion of
your expected lapses are likely to happen each month, which can be of vital importance for
cash flow planning.

4: Building customer segmentations to help you better understand the needs of different customer types.

Marketers need to simplify the problem of dealing with many different types of customer
requirement. The proven way to achieve this is to build a customer segmentation that gives
you a handful of groups for which you can devise different marketing strategies, or even
different products and propositions.
There are many techniques for building customer segmentations, but we like to use one
that allows you to allocate customers with relative simplicity into their correct segment, and
also to find similar types of people outside of your own customer base. For customers within
the customer base, criteria such as value, previous sales or enquiries, and types of
merchandise they buy, often groups customers meaningfully. For customers outside the
customer base, segments are often defined by, for example, affluence or age band. Once
the segmentation structure has been developed your CDP will allow you to allocate each
customer to a segment and plan your communications strategy accordingly.

5: Managing all your GDPR consents in one place.

Customers deposit their consents in many different places. They may unsubscribe from one
newsletter, opt-in to another, decline cookies on a website but approve receipt of customer
marketing when placing an order. A marketer has to establish order in what is often a very
untidy consents landscape and then define clear communications rules about what can be
sent to whom on which pretext.
Your CDP is the one place where, through identity resolution, consents can be bought
together and organised and rules about who can get which communication established. The
CDP can also provide most of the materials for fulfilling Subject Access Requests, as well as
manage anonymisation of data when the right to be forgotten is exercised.

6: Planning business development based on a customer value model.

Businesses need clarity on the growth and quality of their customer base, not least to
understand how to split the marketing budget between acquisition and retention marketing
to meet business objectives. Your CDP will hold a record of the historic value contributed by
each individual customer and you will know what that amounts to in any historic calendar
year. It will also tell you what percentage of customers recruited in previous years typically
order in the current period. Using this information you can, with reasonable accuracy,
predict what value, for example, your customers recruited this year will contribute during
the next year and how this will be distributed month by month.
You will also know how your new customer recruitment usually lands month by month, and
the value new recruits contribute in the period from when they were recruited to the end of
the year. Pulling all this together you can calculate how many customers you will need to
recruit in a future time period to meet a specific overall sales target. We call this the
customer value model, all made possible by data held in your CDP.

7: Providing data for building response and upsell propensity models.

Predicting response by different channels can save a considerable amount of the marketing
budget, enabling marketers to avoid activity that will not produce a strong return on
investment. To build a predictive model you need a target variable, like propensity to make
a second order, as well as predictor variables, which are facts known about the customers –
in this case, both for those who buy the second product and for those who don’t.
The role of the CDP is to provide this data to the data scientist, or the AI tool, which is going
to build the model. But as well as providing the data that allows the predictive model to be
built, it also provides the data that then allows every customer to be scored up with a
probability of doing whatever is being predicted. Indeed, without a CDP, developing and
using propensity models for marketing is made very much more difficult.

8: Recruiting customers to join research panels.

Many companies like to maintain continuous panels of customers who have agreed to answer market research questions, usually in exchange for some value given back to them.
The CDP can provide randomly selected customers for recruitment to these panels, as well
as managing the exercise of sending them questionnaires and recording their responses.
Customer panels are very much simpler to manage if you start with a CDP already in place.
Overall, a CDP should be seen as an essential component in the complex process of
maximising your customer revenue through improving your customer marketing.

 

UniFida logo

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.

Where do you go to get answers to your most pressing marketing questions?

Being tasked with finding answers to marketing questions to support your marketing decisions and advance your campaigns is no easy feat.

We are thinking of questions like:

– where are my most valuable customers coming from?
– what’s the best next offer I can make to each of them?
– how can I identify those dormant customers that are most likely to be reactivated?
– how much should I budget to spend in each of my online and offline channels?

In days of old you would most probably have fired questions like these at your advertising agency, and they would have responded using a smattering of science combined with a lot of judgement.

In today’s evidence-based world there are few one-stop solutions that can properly answer questions like these because to do so requires the right combination of marketing savvy, data, and data science.

However, there is something without which none of these questions can be answered, and that is the single customer view, where all data about your interactions with your customers are held.

For example, just taking the four questions we started with, you will at least need to know:

– how each customer was recruited?
– what their propensities are to buy from each of your main product categories?
– what sorts of customers are self-reactivating?
– all the online and offline events that preceded each of your customer orders?

So, what can we conclude so far?

That your single customer view needs to be skilfully designed to hold both the ‘raw’ facts such as details of a transaction, or a website visit, and also the ‘derived’ facts like a propensity to behave in a certain way.

But the single customer view is only part of the solution.

Our view is that the go-to resource you need is a combination of a customer data platform (the tool that builds the single customer view), with marketers to specify what it is expected to do, and data scientists to transform its raw data into sophisticated engineered predictions concerning your customers’ behaviour.

This is also the basis on which we have built our company. An understanding that marketeers need that right combination of people, technology, and data science to support their marketing actions and decisions.

If this is what you are looking for, then please email is at [email protected] and we will arrange a Zoom with our founder Julian Berry who will be delighted to discuss how we can help.

UniFida logo

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. Our 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, and our ambition is to help our clients stay empowered and ahead in this challenging environment.

How marketers can use data technology creatively

“Follow your own lamp”. This famous quotation from Buddha is as pertinent in today’s marketing world as it was in India in the 5th Century BCE.

We marketers get so much advice about how to go about our marketing from companies like the distinguished McKinsey down to blogs on LinkedIn that we need at times to take a step sideways and consider what our own lamp is telling us.

My personal experience from being at the receiving end of marketing communications is that thousands of them often merge into a uniform blur, with very little to take away at the end.

This has been caused by so many marketers not following their own lamps, but rather slavishly following the paths that have been specified for them by the great marketing consensus.

So how can marketers follow their own lamp and use data technology creatively?

One of our clients called Muck Munchers sells bacteria that you can put down your loo if you want to keep a clean flowing septic tank. They have never failed to ‘follow their own lamp’, and their business is growing at an admirable rate.

creative marketing by muck munchers

Read their whole quirky blog here: Muck Munchers Blog

A large part of a marketer’s individuality must certainly be expressed by the creativity they put into their advertising content. However we should not forget that there is also room for considerable creativity in the way we use our technology.

Let me provide a few examples:

– Customers like to be recognised for what they really are, rather than what they have done in the last five seconds on your website; so a dormant customer who after a long absence suddenly appears would be delighted by a ‘welcome back Mr Smith, and we have been saving something special for you’.

– A small amount of customer analysis can tell us who is and who is not a bargain hunter, so why not restrict your sales catalogues to those who are, and leave the rest to carry on happily paying the full price?

– Customers can be frustrated by going right through your website to find the one item they want, only to be told that it’s out of stock; so browsers who leave your website soon after finding this out will be delighted by an email telling them that if it’s not too late the item is now available.

– And there are triggers when it comes to automating communications. Think garden center; the original purchase of a plant could be followed up by plants that go well with the original purchase with weeding tools, with pest control and even with appropriate winter plant protection.

So please do keep your own lamp lit, and don’t feel the need to follow the herd!

And do come and talk to us if you want to discuss how to use marketing technology creatively.

 

UniFida logo

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. Our 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, and our ambition is to help our clients stay empowered and ahead in this challenging environment.

What is meant by automating customer marketing?

What do people actually mean when they talk about automating customer marketing?

By ignoring the vast ‘black holes’ of programmatic, social, and other forms of adtech used to recruit customers, we can focus in this paper on automating marketing to existing customers.

This usually happens through three main channels; website, email and direct mail. However, what we would like to consider is not the channel used for the delivery process, but how the automation that applies to that should be set up.

To us automation can normally be applied either when a; a customer event takes place and you want to respond to that trigger, or b; when a campaign is being sent out to large numbers of customers to whom you want to deliver relevant communications that will make a return. In plain English, trigger or batch campaigns.

When planning trigger campaign automation there are always two perspectives to consider; which customer group or segment are we expecting to involve, and what actual trigger should initiate the communication.

When thinking about customer segments, it makes sense to first plan for the different stages in the customer life-cycle. This would be from recruitment to attrition, but also to look at the customers’ context. Are they for instance browsing, enquiring, or having just made their purchase?

Here are some of the segments we like to use:
customer segments involved in trigger campaign automation

Having analysed the segments to use, the next step is to plan the triggers that apply to them. Here some examples:
how to plan campaign automation triggers
Clearly creativity needs to run alongside automation to spot these trigger opportunities, and to provide a sufficiently interesting a response to increase customer propensity to purchase.

Automating batch campaigns is however a very different type of activity, as in effect the marketer is blind to what the customer is actually doing. There is no pressing need to communicate at that point in time, but nevertheless sales must be generated.

For batch campaigns we like to use propensities as our alternative to triggers. Propensity models can for instance tell us the product category that an individual is most likely to purchase next. Whether they are at risk of attrition, if there is likely to be a return from sending them a catalogue, or if they are sensitive to price reductions and more likely to buy from a sale offer.

Just as with triggers, there are no limits to the propensity models that could be developed to score customers, but we have over time developed a short list of some that we find most helpful for batch customer marketing:
batch customer marketing propensity model
There is great value to be obtained from automating customer marketing, and as this paper will have shown, a successful outcome from it is as much a question of creativity in terms of how to go about it, as it is one of technology or data science. In fact, creativity, technology and data science need to work in combination for success.

If you would like to discuss partnering your creativity with our technology and data science please email to arrange a call.

 

UniFida logo

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. Our 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, and our ambition is to help our clients stay empowered and ahead in this challenging environment.