Who am I really marketing to? How CDPs and CIAM drive successful personalization
Russell Loarridge, Director UK, ReachFive explains the important role that customer data platforms (CDP) and CIAM (Customer Identity and Access Management) have, to play, together.
When faced with multiple marketing channels to be activated, ever-growing competition and increasingly fragmented buying paths, brands – especially retailers – need to do their best to stand out with relevant content and ultra-targeted messages. But, the corresponding and necessary customer data that is required to drive effective personalized marketing is too often divided across silos. Silos that make it difficult for brands to form a true view of customers, upon which to base marketing campaigns.
83% of marketers acknowledge this problem and recognize that information about their customers is scattered among different departments within their company, completely disconnected from each other. To make matters worse, this data is generally compartmentalized, unusable and becomes obsolete very quickly. As obvious as it may sound, brands, therefore, need to work harder to improve how they manage data in order to support personalization efforts more effectively.
And it’s not just because this is best practice; consumers are actively crying out for this kind of targeted marketing to take place. 72% of consumers say they are ready to change brands after one bad marketing experience, highlighting why effective and accurate personalization is crucial. But, how can brands improve personalization and retain customer loyalty today?
The CDP and importance of a clear vision for data
Developing a clear and shared vision of customer data across all marketing channels is a prerequisite for marketing innovation. But, reconciling this customer user data and activating it across the many marketing channels available these days is a real challenge. This is especially problematic when you consider that data needs to be gathered and interpreted from around 28 different data sources in order to create effective customer engagement.
Now, add in the fact that the majority of consumers buy products for people other than themselves (e.g.) children; partners; parents; and friends) at some point, if not regularly; will approach different product purchases with different motivations; and may abandon carts for different reasons at different times. What does your siloed, inaccessible data tell you about these scenarios? Is the identity of the shopper the same as the recipient? Was this a luxury purchase that was abandoned at the last minute because it just wasn’t necessary, or because the shopper found it elsewhere cheaper? Did something in your check out process put the purchaser off? How is your website collecting, storing and using data effectively in these scenarios?
The challenge is complex and brands are, therefore, increasingly equipping themselves with Customer Data Platform (CDP) solutions to support capturing and organizing data from multiple online and offline contact points in order to exploit it intelligently. For this technology to succeed, though, it must enable marketers to centralize data, remove duplicates and reconcile it effectively in order to strengthen knowledge about their customers for marketing. Ultimately, these platforms should create better-personalized experiences, improve marketing campaign results and evolve product offerings. But, this is only possible if there is a clear and shared vision for data management within the organization – one that joins up data silos to make insights truly actionable.
A complex reality – dealing with silo chaos
The reality is that in striving to set and execute this vision for data, many brands face what we call a ‘silos and chaos’ scenario. This is because most data processing within systems – e.g. CDP, Data Management Platforms (DMP), ETL (Extract, Transform & Load) tools – is based on probabilistic reconciliation. Blocked by poor data quality, data warehousing and integration systems cannot reconcile brand data without a lot of preparation work upstream (e.g. data engineering). This process often requires heavy technological investments and only ensures an average reconciliation of 25% – 50% of the data.
Deterministic matching, on the other hand, based on rich, verified and secure identity-based data can not only achieve 100% matching that supports marketing more effectively; but it also improves the quality of the data that feeds the personalization algorithms. The customer data collection, cleansing and unification capabilities supported by advanced CIAM (Customer Identity and Access Management) then enable companies to move to an optimal ‘silos and identity’ configuration for data management that helps marketers better understand who they market to.
When CDP truly meets CIAM
If we come back to our example of who is really visiting a brand’s website – what if that brand had CIAM in place? They’d be able to establish effectively who is visiting their website, for whom and why they are shopping, and gather appropriate data to deliver personalized marketing effectively. During online shopping, a brand’s CDP typically centralizes and stores transactional data from ecommerce and point-of-sale systems. But, it does not bring up information associated with customer identity. Without this missing piece of information, it can only deliver part of the value that data promises. Identity information – email, phone, social identity, loyalty ID – is the crucial variable for success here.
Moreover, one of the main challenges CDPs face is to be able to attach anonymous, cookie-based data to a known customer from the moment they create an account. CIAM, in contrast, collects zero- and first-party customer profile data, including communication preferences and consent.
Added to this is the fact that we live in a world where consumers often move from one device to another. From the moment they hop from mobile phone to tablet, to computers, to connected TVs, it is essential that the message they receive can follow them wherever they go. CIAM reconciles all available data points for marketers to an identity, including those collected in first- and second-party scenarios.
CIAM is a true complement to CDP. It makes it possible to manage identity and treat it as a data source, in the same way that purchasing or browsing behaviour are sources. It links all the data and allows the CDP to achieve its full potential by ensuring that all transactions and interactions are correctly linked to a customer’s identity. Together they deliver and drive personalization.
Conclusion
Complementing each other, CDP and CIAM technologies help brands to identify the customer across all touchpoints; and collect and leverage useful data associated with their identity. This combined approach to data management ensures better recommendations; contributes to the development of relevant offers and products; and provides real and necessary prerequisites for true personalization.
READ MORE:
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Beyond that, this type of joined-up, data-driven strategy is the critical component across the marketer’s entire business; because it helps organizations to support and manage online and offline customer relationship building, sales and broader operations like product category management – all for enhanced engagement, long-term loyalty and – ultimately – profitability.
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