Wondering how to better leverage your customer data? For many, the journey from being a basic user of customer data, for example just providing lists for campaigns, to being a fully customer-orientated organisation, is perceived as being full of risks and traps for the unwary. As a result, the journey is often halted before it is even started.
However, you are not in uncharted territory, and by following some clearly defined steps you should arrive at your destination without too many damaging hiccups.
1. First off you will almost certainly be asked to justify the cost
Because the benefits of using a customer data platform can come from many different areas of the business you will need to bring together multiple use cases – they can range from making existing activities such as email campaigns more effective through personalisation, to understanding how much you can afford to spend on recruitment because you know the longer term value of different types of customer. Knowing how each area of the business works now, you can estimate the percentage gains from improving effectiveness or introducing efficiencies. At this stage they have to be estimates, but you can get colleagues to help you provide well-judged ones.
2. Next, focus on building a robust first party data platform
A first party data platform should include both online and offline customer activities. Don’t leave out online browsing data, customer contact history, or email opens and clicks. The platform needs to be updated very regularly and be open to integration with other systems such as email service providers. There is a lot of detail to be covered in this stage such as the customer data schema, and GDPR requirements, but always err on the side of including all available granular customer data as long as it is structured and can be linked through personal identifiers to the customer record.
3. As part of developing the first party data asset you will want to manipulate some of the raw data material into something more usable
We suggest developing a few key customer variables that are derived from your data inputs. For instance, customer lifetime value, and customer recency, frequency and monetary value can be of enormous use when planning recruitment or making selections for campaigns. You won’t need more than a handful of these derived variables at the start, so focus on those that will make your customer marketing activities work better.
4. Jump in and start testing new ways of undertaking your marketing
It might be that you start by testing the impact of segmenting your customer base, and giving different parts different treatments, or you could decide to reactivate some of your dormant customers with a carefully designed special offer specially targeted at those most likely to be reactivated. Whatever you do, focus on building a control group to shadow every test, so that you can properly evaluate how much uplift you have managed to achieve. And for every test carefully record what offer was made with what graphics, and how the target audience was selected.
5. Never stop testing
Even in a mature state you should expect to spend at least 15% of your marketing budget on tests. You will never run out of things you want to try out. If you test too little you will quickly run out of routes to move forward. And tests should take risks; we heard recently that 3D postal packages outperform flat ones – how strange is that?
6. Leverage your customer data asset for longer term business planning
When you understand the cost of customer recruitment, the value per customer, and their rate of attrition you can start to build a business development plan based around real customer numbers. So to increase turnover by £X next year, you will have actual customer numbers to recruit, and you will know how much that will cost, and over what timescale the value comes back.
7. Keep on investing in customer analytics
You may want to be able to project forward from a first order to predicting how much a customer is going to buy, and from this how much you want to spend on him. Equally if you have several competing brands, or different product categories, you may need to be able to predict which offer is likely to get the most valuable response from each customer. Customer analytics and marketing tests go hand in hand, and if you give up on either you may find yourself moving backwards.
8. Keep your sponsors engaged and behind you
They will need to see the big picture as you move forward, explained in relatively simple terms. Each quarter you will have spent £X, and got £Y back in terms of enhanced customer value. Sometimes £Y will be less than £X because you have been investing heavily. Don’t let this put you off; as long as you can explain clearly how that investment will pay back over time your sponsors will remain on-board.
9. And finally ensure sustainability
This means building a team that can survive without any one of its members, including yourself. It also means recording everything you do, the messaging, the images, the way campaigns were structured, the selection tools you used, the routes you chose for order fulfilment etc. All too often good people leave an organisation with little recorded evidence of what they have done and thus create a knowledge chasm that can take many months to fill.
If you want to improve how you leverage customer data and are looking for support, we are here to help.
We can help you develop your business case, build a customer data platform, undertake customer analytics, and evaluate results. We offer three complimentary services to help you develop a better understanding of what a CDP can do for your marketing and business:
- Data duplication testing: Identify how many duplicate customer records you have. Understand the impact of wasted spend on marketing.
- Suppressions run report: Identify and suppress individuals who have moved away or deceased.
- Business casing exercise: Identify and develop use cases and financial evaluation. See the opportunities and map out the ROI prior to any commitment.
Contact us to find out how UniFida’s Customer Data Platform could add value to your business.