Digital Transformation and the Role of the Customer Data Platform
For a business to succeed, it must embrace its online presence — customer data platforms allow companies to streamline this transformation.
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A business that wants to be successful can no longer afford to ignore its online presence or think of its online and offline presence as distinct entities. Seeing how customers expect a seamless online and offline experience, businesses have started paying their digital transformation some serious thought. The COVID pandemic accelerated this transformation and made companies look at the different ways data can make their operations more streamlined, efficient, and profitable. Customer Data Platforms (CDPs) have become one of the key technologies with the potential to drive this transformation.
What Is Digital Transformation?
Digital transformation is a change in the way a company operates. It involves digitizing data and making it available throughout the organization so that decisions can be data-driven. This is aimed at providing customers a consistent and contextually relevant experience across touchpoints and increasing revenue from digital channels. While it may seem simple, the scope is vast and hence the process has a number of challenges.
Digital Transformation Challenges
Customer touchpoints from where businesses gather data are growing every day. There are offline data ingestion points like retail outlets and calls to the customer care center as well as digital touchpoints like the website, mobile apps, landing pages, social media platforms, search ads, IoT devices, and more.
For digital transformation to be successful, companies need to be able to ingest data from all of these sources and make sense of it. According to a study, 70% of all companies are unable to integrate customer data from online and offline sources to their desired level.
Once the data is collected from different sources, it needs to be linked. Siloed data gives companies a fragmented view of the customer profile and hinders the digital transformation process. Creating connections can be quite challenging as each system may use a different identifier and may be formatted differently. There’s also the challenge of verifying data for authenticity, validity, and completeness.
Making Data Universally Available
Even the highest quality data is useless unless it is accessible by those who need it. Data must be operationalized — i.e., the same version of data must be made available across the business to optimize customer experiences and drive real-time decisions.
Why are CDPs Critical to the Success of Digital Transformation?
A CDP plays a critical role in both improving omnichannel customer experience as well as increasing digital revenue.
Improve our Understanding of Customer Profiles
CDPs are designed to unify data from all sources, both online and offline. This packaged software solution can ingest data from any number of touchpoints and find links between data from different sources to create a single golden record for each customer. In the process, it standardizes formats and verifies critical information such as the customer’s identity email address, and street address to improve data quality and reliability. With unified customer profiles, companies get a better understanding of customer needs and can use this information to make decisions that will benefit them as well as the customer.
Revolutionize Customer Experience
CDPs give businesses an in-depth understanding of the customer’s experience and activities at online and offline touchpoints. With this, they can tailor-make experiences for each customer and improve the level of personalization.
In some cases, it may be as simple as addressing the customer by the right name at every interaction point. It also helps businesses predict customer needs and aids with targeted advertising. For example, if a woman bought maternity clothes from a retail outlet a year ago, the company could send her targeted advertisements for baby clothes. This type of personalization revolutionizes a customer’s experience, increases revenue, and builds brand loyalty.
Enable New Business Opportunities
Part of the digital transformation process is using technology to create new services and thus amplify customer satisfaction. Through CDPs, businesses get a better understanding of the customer’s needs and can use this information to improve their products and services. Pioneer’s AI-based predictive accident risk scoring system is an example of this.
The Advanced Driver Assistance System gathers and analyzes data about a driver’s behavior and tendencies as well as vehicle and driving conditions to produce a real-time risk score. Drivers can change this score by changing their behavior, for example, slowing down.
Design Relevant Marketing Campaigns
When it comes to marketing, a CDP’s contribution is immense. Firstly, by creating comprehensive customer profiles, it helps marketers segment audiences according to demographics, buying behavior, etc. Audience segmentation for marketing campaigns helps ensure that customers receive relevant advertisements and thus increases the chances of converting leads.
For example, insurance agencies could send promotional emailers only to those customers who have policies that are nearing expiration. It can also affect how this message is conveyed to the customer. For example, an emailer linking insurance and a family’s happiness would be more effective when sent to married customers.
Strategize Decision Making
Rather than deal with fragmented data collected from marketing campaigns, customer management systems, etc., CDPs pull all the data together and make it actionable. This allows decision-makers to see the whole picture and identify patterns behind trends. Based on this, they can make strategic decisions for the business’s future.
It also makes this data accessible to all departments and thus puts everyone on the same page. By doing so, it improves internal and external communication and encourages collaboration. With this data, teams can leverage each other’s insights to create growth opportunities.
To Sum It Up
There’s no ignoring the need for digital transformation, and a CDP can be just the tool needed to help businesses use customer data not just to personalize their experience across one channel, but to transform the organization’s processes and move into the future. By unifying data collected from diverse touchpoints it gives businesses the power to orchestrate strategic initiatives that revolutionize customer experience, power collaborative efforts to improve services, and boost revenue collection. In the current situation, these digital advances are critical to a company’s agility and ability to compete.
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