“We’re customer centric” is little more than an all-too-common refrain today. The reality is that more companies talk about being customer focused than are actually doing it well enough to create a competitive advantage. Although 81 percent of executives polled by system integrator Dimension Data for its “Global Customer Experience Benchmarking Report” say they recognize customer experience as a competitive differentiator, only 13 percent rate their company’s CX as a 9 or 10. The challenge? CX is too difficult, according to about 44 percent of respondents.
Yes, completely overhauling your customer experience is difficult. However, it’s still possible to increase revenue through improved CX while leveraging existing engagement systems. The not-so-secret formula for doing so is by using a customer data platform (CDP) to create uniquely personalized, innovative customer experiences that spurs sales. You can see revenue lift using a CDP in three primary ways:
• Improved revenue per customer through intelligent cross-sell and upsell
• Improved customer retention through frictionless experience
• Improved customer acquisition through relevant targeting
These approaches are so effective because customers today want to feel both understood and valued. Nearly 80 percent of U.S. consumers say they expect brands to show they “understand and care about me” before those consumers will consider making a purchase, according to the “Wantedness” study by marketing agency Wunderman. Additionally, 56 percent of consumers polled in that study say they’re more loyal to brands that “get me” as a segment of one; in other words, showing a deep understanding of customers’ preferences, needs, wants, and past purchases.
Delivering on those expectations is a tall order for most marketing and martech professionals. Despite the advantages of using CX as a competitive differentiator today, few marketers have the ability to deliver truly personalized, relevant experiences consistently across all channels. The reasons? What marketers know about customers is limited, and marketers are unable to keep up the cadence of today’ always-on consumer.
That’s where a CDP comes in. A CDP connects data from across a company in real time to enable an always-on, always-processing holistic view of the customer. Marketers can use that unified and complete golden record to deliver unique and highly relevant experiences.
Marketing professionals who use a CDP have easier access to more robust, timely data than their peers who don’t use one. Which means that they’re more likely than those peers to deliver a customer experience that improves revenue per customer, as well as increases retention and acquisition rates.
Using a CDP, you can perform advanced predictive modeling and enhance your customer data with information such as propensity scores to help determine customer intent and anticipate needs and preferences. This enables tactics that are individualized to each customer, such as next-best actions and dynamic customer journeys; for example, by presenting personalized, relevant communications and recommendations for the content and offers most likely to convert. Because the data is available in real time, marketers can now react at the speed of the customer — essential for delivering the experiences customers expect today. According to Boston Consulting Group, “brands that create personalized experiences by integrating advanced digital technologies and proprietary data for customers” see revenue increase by 6 to 10 percent, at a rate of two to three times faster than those that don’t.
The Impact of Transforming the Customer Experience
The business results of using a CDP to support your CX efforts are numerous and invaluable. They include increasing upsell and cross-sell, wallet share, average order dollar value, purchase frequency, and customer lifetime value because interactions and communications are contextually relevant and personalized. And, personalization can deliver five to eight times the ROI on marketing spend and can lift sales by 10 percent or more, according to Harvard Business Review.
Now is the time to start using a CDP to build the customer engagement that marketers covet — because not only will it deliver game-changing ROI, it also could provide more of a competitive advantage than you think. Although 43 percent of organizations claim to have a single view of the customer, a mere 12 percent say they’ve implemented the required technology to achieve that holistic view, according to Econsultancy. Further, 64 percent of respondents to the Dimension Data study say they have no big data capability that combines data from across channels.
Marketers who use a CDP can bring data together from across their organization to know all that is knowable about their customers. In doing so they have a distinct advantage. Companies considered leaders in data-driven marketing are about six times more likely than laggards to achieve a competitive advantage in increasing profitability and five times more likely to do so in customer retention, according to a study by Forbes Insights and Turn. The reason: The customer experiences these leaders deliver by using data-driven marketing are competitively differentiated. And there’s no greater advantage than using the robust, continually up-to-date customer data that a CDP provides, delivering a deep understanding that informs the interactions, messages and offers that comprise your CX.
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There are four primary ways marketers and martech professionals can use a CDP to drive immediate and long-term business value. One is revenue lift. The other three are:
• Innovation – Increased market value through breakthrough innovations
• Operational effectiveness and efficiency – Decreased costs through improved operations and customer understanding
• Risk avoidance – Decreased risk through a holistic view of data
You can read more about innovation impact in “Increase Market Value Through Customer-Led Innovation.” We’ll cover the other two topics in upcoming posts.