The right data strategy is the foundation for better customer experiences
Third-party cookies might be going with the dinosaur ,, but organizations will still require data about customers’ online behavior to deliver the personalized experiences they want.
This means that data strategy should shift to include multiple types of first-party information, collected with customer consent. First-party data refers to data customers have agreed to share with brands. This includes their preferences, online behavior, and personal information. First-party data can be a rich source for intelligence, but it is often scattered and unorganized, making it difficult to use the data to help an organization make better decisions and take action.
This is where a customer data platform (CDP) shows its value as a “persistent, unified customer database that is accessible to other systems,” according to the Customer Data Platform Institute.
Creating a full customer profile
A CDP is a foundational layer for enterprises that manages and protects customer data, which is the bedrock for customer experiences,” explains Ryan Fleisch, head of product marketing for real-time CDP and audience manager at Adobe. By collecting and normalizing data in real time from a variety of sources–transactional, behavioral, and demographic–a CDP presents a single, focused view of an individual. This allows enterprises to deliver the best customer experience to each individual.
Fleisch notes that successful CDPs must excel at these core five abilities:
- Ingest data from different sources to create a 360-degree view of a customer
- Unify data to assembles a cohesive customer profile
- Keeps data fresh and accessible in real time
- Ensure compliance with all regulations and policies, which are frequently shifting
- Effectively use the data for customer insights and action
Because CDPs use consented, first-party data, they have quickly become an important solution for managing customer data in a future-proof way. During the last 18 months or so, as data deprecation has accelerated, companies have recognized an urgent need to get smarter and more responsible with customer data.
Respecting customer data is a big deal
Consumers are tired of companies that use and abuse their personal information, without permission and for profit. Data regulations were created to give consumers more control, transparency, choice, and control over the use of their data. Regulations like the EU’s General Data Protection Regulation (EU) and the California Consumer Privacy Law (CAPL) have changed the ways data can be collected and the customer consent required to do so.
CDPs provide integrated data governance capabilities that allow companies to apply both customer preferences and regulatory rules across every customer interaction. Fleisch says, “You must have a strategy that builds trust with customers and serves as a foundation for all other experiences and touchpoints to follow.”
Finding value in customer data
Because CDPs are built on consent-based data that customers willingly share with brands, the data is inherently higher quality, giving companies valuable insights into their customers. Companies used to rely heavily on third-party cookie, but these cookies were limited in their ability to provide a holistic view of a customer. As third-party cookies are no longer supported by browsers, CDPs provide a deeper understanding of customers based on first-party information. Organizations will need this data to get a better view of their customers. For years, Firefox and Safari have prohibited third-party cookies. And, Google, whose search engine Chrome claims 63% of the global browser market, is (slowly) working out a plan to kill cookies.
Integration is one reason CDPs provide a deeper view of customers than cookies. CDPs can connect with other technologies and data sources, activating and connecting–in real-time–both offline and online data that is scattered across an organization. CDPs are the brain behind all customer experience tools and the glue between marketing systems. Fleisch says that if you want to provide a connected experience for customers, you don’t want a web of disparate systems.
In fact, what you want is one centralized brain to manage data decisions and understand the next best experience for the customer. CDPs can be that central brain, providing information to all teams within an organization and across different channels. Fleisch says that the CDP is a great way to get a clear view of your customer and make sure all that data can be used in real-time. Fleisch refers to “real time” as a latency of milliseconds instead of hours or even days.
This real-time intelligence helps brands develop strong relationships with their customers by meeting them right where they are with the exact information they need. According to the 2022 Adobe Trust Report, 72% of consumers say their trust for a brand increases when content is relevant and delivered at the right time and place. Customers can only get the personalization they want when there is real-time action on their customer data. Customers love coupons that save money. However, it is important to send customers coupons for products and services only if they will actually use them. A generic coupon, or worse, one that isn’t targeted, can decrease trust in a brand.
Real-time data personalization for customers
CDPs are applicable across industries and regions. Fleisch suggests that CDPs can be used for larger companies with more complex deployments. CDPs can be used by smaller companies to focus on marketing and lead by teams that are keen to deliver consistent experiences from customer acquisition through retention, loyalty, and even customer acquisition.
For example, London-based TSB Bank determined it needed to unify its customers’ banking experiences across channels, especially with more of its customers going digital. Other objectives included providing customers with the most relevant content in real-time, establishing stronger consistency between online transactions and in-branch transactions and moving away from third-party cookie to consent-driven first party data.
According to Mike Gamble (director of analysis and design at TSB), “We needed a complete view of every customer who banks with us, their history, their needs, and how they move through their customer journey. That meant centralizing our data on a single portal.” TSB customers browsing new homes online might be able to receive information about TSB mortgages. Just one year after implementing a CDP, the bank saw a 400% boost in loan applications. Fleisch recommends that you confirm the need and use cases for a CDP before you start exploring options. Next, make sure you are clear about the long-term goals of your business and keep them in mind. Fleisch says, “Think long-term about how a customer platform can truly unify and connect data, teams, and find value from all that customer-provided information without running into dead ends downthe road.”
This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by the editorial staff of MIT Technology Review.
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.