Why a Customer Data Platform Is Fundamental to a Personalization Strategy

April 15, 2019

download-1These days, most brands are trying to improve the way they engage with customers. This means giving customers a consistent, relevant, orchestrated experiences no matter when and how they engage -- over email, through social channels, on the website, in digital ads, etc. But as they embark into better personalization, marketers can be tempted into focusing solely on the execution channel (e.g., “I want to personalize, so I am going to buy a website personalization tool,” or, “I want to send personalized emails, so I need a new ESP.”), but lose sight of the data and segmentation discipline required to make personalization really effective on any channel.

Let’s look closely at website personalization, for example. Personalization solutions like Evergage, Monetate, and Optimizely can change the website experience based on who the visitor is. At a high level, these solutions can segment customers and target messaging, offers, creative, and experiences based on which segment that customer belongs to. This in turn increases website conversions, boosts customer delight and customer retention, and makes everybody happy -- at least in theory.

But, while a personalization solution alone is great at the act of delivering the experience, the customer data it is acting off of may be incomplete, inaccurate, duplicated, and will likely not be pulling from “single view” of the customer. Without this single view, any predictive intelligence, modeling, or analytics used for customer segmentation will not be effective, and marketers will accidentally leave out swaths of customers who should be in a segment, or worse, put people into a segment in which they do not belong (resulting in a confusing/laughable/irritating experience for the customer, and negatively impacting conversion rates).

CDPs unlock the true potential of a personalization tool

There’s a reason that Customer Data Platforms (CDPs) are really high on marketers’ wish lists right now: a CDP makes the personalization dream a real reality. Consider all the things a CDP does, (and a personalization tool does not), that enable the customer data to be fully leverageable by the personalization system:

  1. Identity resolution. Enterprise-grade CDPs offer robust identity resolution as part of their solution. For AgilOne, this includes a four-step process, as shown here:

    Without such a process, it’s impossible to know (a) how large your customer file really is (b) what your baseline KPIs are across customers (c) which customers belong to which segment. By definition, personalization solutions do not offer identity resolution. Marketers who personalize off of data that isn’t cleansed, deduped, or stitched, are likely to deliver the wrong message, offer, etc. to the wrong audience. But by leveraging data from a CDP, a personalization solution can deliver highly relevant 1:1 experiences based on accurate data. (Read what identity resolution criteria marketers should look for in this recent whitepaper written by David Raab, founder of the CDP Institute).

  2. Customer intelligence. Without a single view of the customer that has been through the identity resolution process, it is impossible to gain accurate insights into who your customers are. Without a CDP, anything you want to learn about your customers is tainted and likely inaccurate. A CDP gives you a true view into who your customers are -- and reveals segments that could benefit from personalization. For example, a CDP will show you customers who have only purchased once through any channel or a specific channel, customers who live within a proximity to a given store, customers who just took an action on your website, customers with a high likelihood to become VIPs… any segment you can imagine can be easily identified with a CDP and sent to a personalization tool. A CDP gives marketers much greater visibility into customers and the possibilities of personalization. For more information on the types of visibility AgilOne provides, read our recent announcement about Metrics Launchpad.

  3. Uncovering revenue-driving personalization strategies. In addition to giving marketers a view into customers, a CDP can also surface important opportunities for personalized campaigns. For example, a CDP can identify whether a product or category is trending for a given segment; marketers can capitalize on this insight and create a personalized campaign that will increase the profitability of the product/category while it is hot. Without a CDP, personalization is operating solely within its own universe, and is missing the holistic business view needed to maximize revenue of personalization approaches.

  4. Configurability to meet any segmentation criteria that matters to a business. Enterprise CDPs like AgilOne are able to be configured to meet the exact definitions, requirements, and specifications that are unique to any given business. For example, if you have a custom way of defining geography (i.e., you use weather patterns to define what types of clothing to sell in retail stores in specific parts of the country), this can be configured into the CDP platform and used for customer analytics, segmentation that can be sent to a personalization system, and it will appear everywhere else within a CDP for consistent reporting and action. (Read my previous blog post or watch our video from our Chief Product Officer about why configurability in a CDP is important.)

Personalization: More than email or the website

With a CDP, omni-channel personalization is truly possible, because the same real-time segments can be sent to multiple channels where personalization takes place. This means that the customer gets a consistent message, offer, and creative no matter where they engage. While a CDP can coordinate email and website personalization, a CDP can also enable personalization across other key channels such as:

  • Digital advertising. By sending CDP data to retargeting platforms such as Criteo or to Facebook and Google, marketers can:
    • Target ads very precisely to the right audience
    • Suppress in-store purchasers from retargeting campaigns
    • Create highly effective lookalike audiences using CDP data (e.g., lookalike modeling based on customers with a high likelihood to buy).
  • In-store clienteling. By sending CDP data to a POS terminal or clienteling app, in-store personnel can deliver a highly relevant in-store experience.

  • Customer service. Call centers and customer service teams need to know who they’re talking to. By sending CDP data to service cloud software (e.g., SalesForce, Oracle) or by giving agents direct access to the CDP application, service agents can deliver a highly personalized experience that results in shorter calls and greater customer satisfaction.

A personalization tool is not a CDP; a CDP is not a personalization tool

Because CDPs are so hot right now, some personalization vendors are calling themselves CDPs. But without being able to deliver CDP functionality like identity resolution from all data sources, or providing robust customer analytics, or by meeting any of the other requirements, they aren’t really CDPs.

But when a real CDP and a personalization tool are used in concert with each other, exciting things happen. Experiences become relevant. Customers become delighted. Marketers increase revenue. And that, my friends, is a beautiful thing.