Written By: Russ Artzt
A new book, Customer Data Platforms: Use People Data to Transform the Future of Marketing Engagement (Wiley, 2020), by Martin Kihn and Christopher B. O’Hara, should be high on the reading list of anyone interested in using data to grow revenue. It’s well-written and extremely informative. The book also offers a great reality check for people who think bringing data into sales and marketing operations is easy. It’s not. This book explores why this is the case—while also revealing why it’s beyond worthwhile to deploy a Customer Data Platform (CDP).
The title alone is revealing. “Use People Data” is a telling phrase. Data about people is what drives better outcomes in sales and marketing. “Transform the Future of Marketing Engagement” also communicates a great deal about the potential for data in sales and marketing. The better you can harness people data, the more transformative your efforts will be in engaging with customers in marketing.
The authors start off by highlighting the incredible potential of personalization in marketing. With stat after stat, they argue that personalization in marketing will be the driving force behind sales growth in the coming years. For example, 80% of customers told researchers that their experience of a brand is as important as its products and services. Eighty-four percent said some level of personal treatment was key to winning their business. And, they cited the explosive growth of platforms like Facebook and Amazon, which perform incredible feats of personalized marketing.
However, they then offer a great example of how challenging personalization can be to implement: They describe a scenario that most of us will know. Imagine, they say, getting personalized emails advertising a car you’ve already bought. The car company doesn’t know you already bought the car, so they pester you with cloying, personalized ads for months or even years. In the view of the authors, this process actually creates a negative perception of the brand. If you already drove off the lot in the four-door model in blue, then why do they keep pushing the red hatchback? Not only does the company look incompetent, they also don’t “get” who you are. Plus, they’re wasting money as they irritate you.
How does such an incredibly common and understandable mistake occur? According to the authors, the problem comes from what they call “disconnected data.” The record of the car purchase is in system A. The documentation of your “building your dream car” on their website is in system B. The email marketing occurs in system C, and so forth. Indeed, as they point out, the average enterprise has 900 applications running, only 28% of which are integrated with a system of record. No wonder the car company has no idea that you’re already a customer!
As customer data spreads out onto third party systems, the challenge gets even more serious. For instance, customer data required for accurate personalization might be sitting on Customer Relationship Management (CRM) solutions, customer databases in operational systems like Enterprise Resource Planning (ERP), programmable ad platforms, email marketing services and on and on. These become data silos that can be difficult to breach.
Enter the CDP. The CDP offers a solution. Yet, as the authors note, confusion about CDPs is rampant at all levels of the organization. People don’t know what a CDP really does. They’re not sure if they need one, or even how it will work if they buy it. Part of the blame rests with vendors, who may over-hype the CDP and minimize implementation difficulties. The authors strongly encourage potential CDP buyers to be thorough and circumspect about claims of CDP capabilities. In their view, a true CDP will have the following capabilities:
“Anonymous to known” transition — Capturing customer data so anonymous web visitors become known prospects, with their proper consent.
System of engagement — Providing real time engagement such as channel optimization, next best offer management or dynamic creative optimization.
System of insight — Presenting a persistent single view of the customer, i.e., “Customer 360.”
Data portability — Moving data between systems with relative ease
A true CDP can do these things, thus knocking down, or at least reducing the data silo barriers. A CDP also needs to handle an increasingly complex assortment of what the authors call “Journeys and Devices.” The reality of today is that customers tend to engage with brands using multiple devices, often for the same transaction. They note that there are 4.3 connected devices per adult in the USA. Forty-one percent to 67% of all online purchases are the culmination of a multi-device journey, e.g., browsing an ecommerce site on a smartphone but making the purchase on a PC. They further point out that 66% of retailers fail to recognize the same customer as they switch devices on their path to purchase. And, other industries are far worse at this.
To make matters even worse, even without siloes, the business organization itself can be an obstacle to realizing the value of a CDP. Each team has its own CDP needs. These include the e-commerce team, the customer support team, email marketing groups, online advertising teams, data analytics and more.
The authors’ intention is not to be discouraging about CDPs. On the contrary, they see the CDP as the ultimate answer for the many issues confronting companies that want to make better use of customer data. They just want to discuss the real challenges that can arise on the way to success with a CDP.
Getting a CDP up and running successfully may involve parallel efforts to manage data quality. Data orchestration, for example, is necessary to create the kind of unified, normalized and enriched data that a CDP needs to function properly.
Data orchestration allows businesses to master data management and analysis with minimal resources, quickly surfacing the necessary information to operationalize demand generation campaigns, personalized emails, direct sends, and targeted messaging for effective sales engagement. Through a series of automated processes to continuously cleanse, enhance, segment, and route your data, data orchestration offers leaders consolidated and reliable reporting and dashboards, setting the stage for better communication and outcomes.
Revenue operations leaders that combine data orchestration technology with their CDP investment will undoubtedly be given a competitive advantage over their counterparts.
With data orchestration and data quality as core elements of a strategic CDP plan, stakeholders will be able to discover the true power of their data to recognize positive, sustainable revenue outcomes.