Leveraging Customer Data Platforms to Build Market Advantage

Many business leaders and investors think that having access to customer data can provide them an unassailable competitive edge. More customers means you have more data and you need to collect the data. Once the data is analyzed using artificial intelligence (AI) or machine learning tools, you can suggest better products to your customers and eventually push out the competition, much like a company with significant network effects does.

Most of the time, this assumption is incorrect, and individuals typically greatly underestimate the benefit that data provides. Businesses of all sizes need to use customer data to create a competitive advantage. Companies can gain a substantial competitive edge by using the wealth of data available to get insights into customer behavior and preferences.

Here are a few strategies for using consumer data to your advantage.

1. Personalized Marketing:

Customer data can be used to create personalized marketing campaigns that resonate with each individual customer. By understanding their needs and interests, you can target them with relevant and compelling messaging, increasing the likelihood of conversion.

2. Customer Segmentation:

Customer data can also be used to segment your customer base based on demographics, purchase history, and other factors. This allows you to create targeted campaigns for specific customer groups, which can result in higher conversion rates and customer satisfaction.

3. Customer Retention:

Customer data can be used to identify customers who are at risk of churning and create targeted retention strategies to keep them engaged and loyal. By understanding the reasons why customers are leaving, you can implement changes that improve customer satisfaction and reduce churn.

4. Improved Product Development:

Customer data can also be used to inform product development. By understanding what customers want and need, you can create products that better meet their requirements and increase the chances of success in the market.

5. Competitive Intelligence:

Customer data can also be used to gather competitive intelligence. By monitoring customer behavior and preferences, you can gain insights into what your competitors are doing right and wrong, and use this information to your advantage.

So, it is clear that leveraging customer data is essential for building a market advantage. By using customer data to create personalized marketing campaigns, segment your customer base, improve customer retention, inform product development, and gather competitive intelligence, you can gain a significant competitive edge and drive business success.

What is customer data? Types of customer data and how it can be leveraged for various goals:

Customer data is the information that customers give you when they interact with your business. Businesses gather behavioral, demographic, and other crucial data to comprehend the needs of their clients. As a result, you may interact and communicate with customers in a suitable manner.

Your website, mobile applications, social media, surveys, and marketing initiatives help in collecting customer data. It can be acquired both offline and online. The foundation of any effective business strategy is customer data.

Data-driven businesses recognize the importance of this and take steps to ensure that they gather the consumer data points required to enhance the customer experience and fine-tune their business strategy.

Types of Customer Data:

An organization collects myriads of customer data points throughout the buyer’s journey. The volume of these data points is quite vast and gives an easy understanding of the customer needs. So, let us look at the different types of customer data which is required for collecting and enhancing your business strategy.

Important tip:

It should also be noted that the data of customers which you are storing and collecting is an intricate topic which must be done abiding by a certain set of rules and regulations like the GDPR of the country and the organization which operates from and/or of your target audience. Studying about these regulations will help you to avoid legal consequences and it is better to take legal help if you have no idea about it.

1. Personal Data

Personally Identifiable Information (PII) and Non-Personally Identifiable Information (NIPI) are the two categories into which personal data should be segregated (Non-PII).

PII is the term used to describe information that is collected in order to establish a person’s identity. Linked information first. It is the data that is utilized to identify a person without the need for any other data or information. The full name, physical address, login information, SSN, passport number, date of birth, debit and credit card information, driver’s license number, phone number, and email make up connected information.

The second type of information is linkable information, which is any data that, by itself, cannot be used to identify a person but can be used to do so when combined with other data, such as a person’s first or last name, location, state, nation, ZIP code, age group, and employment information.

Non-PII is the reverse of PII, which is data that cannot be used to specifically identify any one individual and is anonymous. Non-PII examples include cookies, IP addresses and device identifiers. (For instance, the GDPR allows non-PII like cookies to be classified as personal data. So, we have gathered them under one heading to reduce any potential misunderstanding.)

2. Engagement Data

With the use of numerous marketing channels, engagement data reveals how your customers engage with your business. This data consists of details about how customers use your website, how they communicate with you through customer care and social media, and other things. Following are each channel’s inclusions:

Interactions between websites and mobile apps: visits, app stickiness, most popular pages, user flow, traffic sources, etc.

• Engagement on social media: views of native videos, shares of posts, comments on posts, etc.
• Email engagement metrics include email forwarding, bounce rates, click-through rates, and open rates.
• Customer service data includes the number of tickets, information on complaints and inquiries, and feedback.
• Engagement with Paid Ads: Impressions, CTR, CPC/Mille, Conversions, etc. 

3. Behavioral Data

Utilizing behavioral data, you can find hidden trends that your clients exhibit throughout the buying process. Behavioral data may or may not include engagement data. Here’s how to collect this information:

• Transactional information: information about subscriptions, purchases, previous purchases, average order value, information about abandoned shopping carts, and average customer lifetime value. Details about the customer loyalty program are displayed in a new window.
• Product Usage: Recurring activities, use of features, length of features, task completion, devices, etc.
• Qualitative data: user focus, heatmaps (data from mouse clicks, scrolling, and movement), etc.

4. Attitudinal data

The thoughts and sentiments of your consumers are what shape your customers’ attitudes. It depends on how they view your company and products. Since attitude data tends to be qualitative and evaluative, it might be difficult to get specific results.

• Consumer satisfaction
• Sentiments
• Desirability of a product
• Preferences
• Motivators and difficulties
• Purchase requirements

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Benefits of CDPs

Data from various sources is saved on a customer data platform where it is utilized to combine apps and evaluate data. Since it produces an accurate and unified perspective of consumer behavior, transactions, and products, a CDP aids organizations in understanding their customers. Sincere and unified because, with the proper setup, the data is being cleaned, deduped, modeled, and kept in a single location rather than being fragmented in apps.

Having all data from various sources centralized in one place is crucial for companies to get a complete picture of their customers and make informed business decisions. For example, Rituals, a global cosmetics brand, was able to become more customer-centric by integrating all their data sources into their CDP (customer data platform) called “Rituals Information Lake”. With all their customer data in one place, they can now offer better customer experiences and gain valuable insights.

1. 360-Degree View of the Customer

A 360-degree view of the customer allows companies to understand every aspect of their customers’ journey, behavior, and transactions. With this comprehensive information, sales, marketing, and service teams can target the right people with the right message at the right time, leading to higher customer satisfaction and increased loyalty. For example, Rituals can now easily recognize customers when they contact them and offer quality service with all relevant information at their fingertips.

2. Increased Revenue

A well-implemented CDP can result in increased revenue through higher customer satisfaction and intelligent targeting. By having all customer data in one place, companies can create a comprehensive view of their customers, leading to better targeted marketing and higher conversion rates. Examples of marketing use cases include identifying and defining customer journeys, audience segmentation, attribution measurement, and smarter targeting.

3. Finding New Audience Segments

 With all customer data in one place, it’s easier to segment customers and audiences and apply basic and advanced analytics. The CDP may do the segmentation, but the specific features will depend on the type and brand of CDP. By working with all the data, companies may find new possibilities for audience segments, allowing for more specific and customized messaging.

4. Campaign Optimization and Long-Term Learnings

A CDP offers insights into the performance of specific campaigns, allowing marketers to see their efficiency and outcomes. This information can be used to improve future campaigns, saving budget and increasing conversion rates. By using a CDP, companies can continuously learn and improve their efforts over time.

5. Reduce Vendor Lock-In and Own the Platform

Having a loosely coupled customer data platform built by Crystalloids can reduce vendor lock-in and give companies ownership of their platform. By having the persistence of the data primarily in an information lake, it’s easy to switch applications with a smooth migration process. Companies can now have more control over their data and avoid being dependent on one vendor.

6. Reduces the effect of third party cookies

To mitigate the effects of losing third-party cookies, companies can adopt an AI-based Marketing Engine within a custom-built CDP on Google Cloud Platform. This solution allows for the utilization of first-party data, while maintaining compliance with data regulations.

Segmentation can be automated through the use of MLOps for activation across all digital marketing platforms. As third-party cookies become scarce, companies should consider utilizing first-party data as a means of reaching their target audience. A first-party data strategy is critical to delivering omni-channel customer experiences.

Statistics based on customer data use:

In 2021, the market for global customer data platforms was estimated to be worth USD 1.56 billion. From 2022 to 2024, it is anticipated to grow at a CAGR of 27.41%. (2022 – 2027). The market is anticipated to expand at a faster rate over the forecast period due to the rising need for studies of consumer behavior across sectors. Additionally, the development of customer channels, the shifting nature of customer intelligence, and rising investments and funding for CDP startups all contribute to the market’s expansion.

The growing demand for omnichannel experiences will probably accelerate market expansion since they adopt a customer-centric strategy that enhances user experience. This strategy greatly contributes to market expansion and gives firms a more comprehensive understanding of consumer behavior with which to better execute their marketing plans.

Collecting customer data is crucial for businesses as it helps them understand their customers’ behavior, demographics, and enhance their overall experience. The following statistics offer a comprehensive view of the customer data industry.

• By 2025, the global market share for Customer Data Platforms (CDPs) is expected to increase from USD 2.4 billion in 2020 to USD 10.3 billion.
• Retailers who use data analytics and information claim to have a competitive advantage in 62% of cases.
• 49% of businesses use marketing data to boost and enhance the client experience.
• Worldwide, 67% show variation that overall customer service is improving.
• Data-driven businesses have a 23 times higher chance of acquiring new clients.

46%, 43%, and 42% of businesses prioritize increasing customer loyalty, conversion rates, and improving customer experiences respectively. Customer experience and engagement are crucial to the success of a business. Without a plan to enhance the customer experience, companies risk missing out on opportunities to connect with their target audience and potential customers.

Creating a positive experience not only increases revenue but also builds trust with customers, leading to long-term loyalty. The following statistics demonstrate the impact of strategic customer engagement on a business:

• 94% of customers who rate a brand’s customer experience as “very good” are more likely to make additional purchases from that business.
• 97% of customers have avoided a purchase due to an inconvenient customer experience.
• Brands that prioritize customer experience see an 80% increase in revenue.
• Customers are willing to pay 13% to 18% more for luxury services if they receive a better customer experience.
• 54% believe businesses need to change their approach to customer engagement and communication.
• In 2022, 73% of consumers anticipate reviewing their budgets and expenditures.
• Only 13% of Americans waited for a product that was out of stock, whereas 60% of Americans had experienced out-of-stock products. 32% of Americans completely changed merchants while 39% switched products.
• 40% of Americans think that brands have shifted their emphasis to providing great customer service.
• 52% of people worldwide think that companies should respond on customer input.
• Consumers’ experiences with chatbots are neutral or favorable for 87.2% of them.

Tools That can help you learn more about the customers

Understanding customers has become a top priority for businesses, shaping product development, marketing, and customer service. Brands must stay attuned to customer perspectives as they make key decisions.

This has led to a rise in experiential marketing and a focus on customer experience, where businesses offer consumers the chance to try their products, leading to increased conversions.

However, what brands may overlook is that these marketing events also present a prime opportunity to gather customer data. With the right tools, businesses can gather valuable information about their target market while showcasing their products to potential customers. A few best solutions are listed below:

1. Anydata

Knowing your clients and the most devoted supporters of your business can be learned through marketing. AnyRoad is setting the standard for experiential marketing thanks to solutions that are integrated across the whole consumer journey to gather feedback from real-world experiences. Individual feedback delivery can undoubtedly aid in honing and improving experiential marketing, but AnyRoad goes much beyond this. Additionally, it features a layer of data intelligence to track changes in consumer behavior and brand impression.

Then, you can view this data in real time and have a deeper understanding of who is taking part in your brand’s experiences as well as how to establish enduring bonds with new brand champions. Even businesses are using AnyRoad to discover more about their most ardent supporters, including the world champion Golden State Warriors.

2. Zoomdata

Dynamic visualizations of large data sets within an organization provide a clearer understanding of their significance. Numbers and figures in spreadsheets can be overwhelming and may not provide immediate answers, leading to important insights being missed.

Zoomdata solves this problem by offering an intuitive, easy-to-use, and collaborative platform. With Zoomdata, individuals across the organization can gain valuable insights into their customers, even without extensive data analysis skills. Additionally, custom visualizations can be created and embedded for web and mobile use.

3. UserVoice

UserVoice doesn’t just gather customer input for businesses; it also offers advice on how to use the data. The tool can be configured to continuously collect client feedback via a company’s website or app, whether the data is supplied by customers or by employees who obtain it from those customers.

That implies that while your employees are in the field showcasing your products at trade shows or other industry events, they may enter consumer feedback into the app while they are there. When feedback has been gathered, it is simple to filter it so that teams only view the data that is most pertinent to their work.

4. Segment

Segment is a platform for customer data that enables you to gather, purge, and activate your customer data and send it on many integrated routes. Its popularity is a result of its simple setup, real-time tracking, and configurable dashboards.

This platform’s strong integrations, which allow you to easily add a new service to your business analytics, are a key benefit. Other features include personalized data pipelines, manual analytics, loading and converting consumer data, and cross-channel engagement design.

5. CareCloud

CareCloud provides a comprehensive view of customer data, including both digital and offline information, with a specific focus on retail and e-commerce. Its native apps allow for targeted audience filtering and immediate execution of email, SMS, or push campaigns. Automation workflows can streamline the entire customer journey, and pre-made workflow packages simplify the automation process.

CareCloud’s analytics and prediction capabilities ensure efficient use of customer data and proper monetization. The platform’s native RFM segments and recommended actions drive up customer lifetime value and retention rates. Additionally, its Loyalty Engine offers a user-friendly way to create a customer program based on points or membership levels.

CareCloud is the ideal CDP for businesses looking to directly monetize their data without the need for external marketing systems.

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Final Words:

Declaring that using data increases income is simple. Actionable insights undoubtedly enhance leads and conversions. The reason for this, however, is simple: a company that has access to reliable consumer data will accurately market its products and services, producing positive outcomes.

Providing firms adjust appropriately, properly leveraging data gives a long-term marketing plan to get workable results. Switching to a customer data platform (CDP) can help alleviate the difficulties of managing multiple outdated systems for customer insights and improve the outcomes. CDPs work as a centralized repository that gathers data from various sources and integrates it into a single, unified database.

With the crucial information obtained through CDPs, such as user feedback, customer service data, and campaign metrics, businesses can design a personalized digital marketing approach.