Author: Matt McNeany | Chief Transformation Officer | OPMG
Author: Matt McNeany | Chief Transformation Officer | OPMG
Today’s high-growth businesses have discovered the power of turning data into revenue through a customer-centric approach with artificial intelligence-enabled decisioning. Companies like Apple, Amazon, and Spotify lead the way by leveraging customer interactions to enhance services, products, and experiences, fostering loyalty. This customer-centric model has spread across various industries and companies, including more traditional ones like Ralph Lauren and Mercedes-Benz.
Studies confirm that prioritizing customer-centric strategies brings substantial benefits. According to McKinsey & Company, companies emphasizing customers experience a 10% to 15% increase in revenue growth and 10% to 20% lower costs compared to less customer-centric peers.
The demand for data-driven customer experiences is reflected in every brief we receive. Therefore, developing an effective first-party data strategy is essential. Here is a concise to-do list to achieve this goal:
Conduct an audit of customer touchpoints to optimize data collection and usage. Simplify customer interactions, avoiding repetitive requests for information. Personalize the website experience and integrate customer preferences into their profiles.
You should also use each customer interaction to learn more. Capture which content the customer engages with and add that to their profile. Build an experience that asks the customer their opinion and what they like. Connect social data to customer profiles to build a more rounded picture.
Too many data initiatives get bogged down in legal. Collaborate with the legal team to clarify your legal and data privacy strategy. Then, add an ethical dimension. Just because you can capture data and use it, should you? How are you being open and honest with customers about what you’re doing? It’s good for business, and you’ll feel better about yourself.
Unless your brand was founded in the last few years, you likely have customer data spread across systems, making it difficult to create a single customer view, build insights, or activate. This is something you do need to change. It can be one of the bigger jobs to do, but it’s fundamental.
For most brands, the answer is to implement a customer data platform and use it to bring together current data silos while allowing them to continue to operate. The choice of CDP is essential. They are not all the same, and many have limitations or are specialists in one category — you should use a consultant to help you buy.
Once you have a CDP, prioritize the use cases based on your vision for customer experience within the business. What is most important to you: on-site personalization, e-commerce conversions, media effectiveness, retention, etc.? A CDP can help with all this, and you should set the priorities.
Now that you have brought data together, you are in an excellent place to make that data more meaningful and valuable. There are two basic routes here: Build more first-party data or use third-party data to enrich your data.
For the first option, aim to capture all customer interactions (including social and content interactions) and add them to the CDP profiles. Implement identity management so you can recognize customers when they show up in different locations and devices.
For third-party enrichment, implement a clean room that allows you to share your data with vendors to enrich your understanding in a privacy-compliant way. You want to understand who your customers are, what they like, where they go, and what they buy when they are different from your customers. Why? So you can then build predictive models of their next best experience and use their behaviors to find look-alike potential customers.
Third-party enrichment via clean rooms is a clever shortcut. But be careful: Renting data is not a long-term strategy; you need to build your own, or you will be forever beholden to others.
Connected decisioning is where you turn data into personalized experiences. This is where the hard work pays off, and you start to monetize your efforts.
Use first-party data to build predictive models and next-best experience recommendations to offer each individual the right product, channel, content, and offer. Use the journeys taken by current customers to identify new customers. Recently, when we implemented this for a global client, we delivered a 50% improvement in media efficiency.
Connect your data and decisioning models to your media, on-site/e-commerce, and customer relationship management martech so you consistently use intelligent decisioning throughout the customer journey across channels. And watch conversion, revenue, and repeat purchase numbers rise alongside your customer satisfaction.
Becoming customer-centric and data-driven requires dedication, but the long-term rewards for your business are significant. Embracing a coherent, first-party data plan will help you to truly understand and serve your customers better.
