When considering how to use data, marketers aim to gain a competitive edge. In today’s landscape, showing your customers that you understand and appreciate them is key to achieving better marketing results. Besides boosting revenue and cutting costs, marketers can also reduce risks by developing a complete view of customer data that helps them provide relevant experiences and messages.
Privacy is crucial and can be costly if the wrong processes or systems are used. Regulations like GDPR, whether from federal, state, or industry sources, are significant for marketers and their organizations. However, with strong customer data platform (CDP) features, managing consumer privacy and compliance can be automated, significantly lowering business and technology risks. Building a complete and accurate single customer view is a practical and potentially rewarding way to reduce risk.
Customer data platforms decrease risk through four primary ways:
- Improve compliance through strong closed-loop processes, e.g. for GDPR,
- Increase data quality, and lower costs of maintaining customer data through advanced matching and streamlined Master Data Management (MDM) for data governance,
- Improve cross-team collaboration through connecting all data across the enterprise,
- Future-proof your enterprise to enable innovative customer experiences through an open garden approach.
Customer Engagement Optimized
Companies often work with siloed data. For example, robust demographic and purchase data in one system, and rich online behavioral data in another. To bridge those silos, the primary goal should be to provide frontline systems and staff with access to the real-time data they need to provide the most relevant interactions, offers, and communications to customers. But without the right tools and processes, there remains the risk of a data free-for-all that leads to non-compliance with regulations, poor data quality and maintenance practices, as well as siloed operations.
With the help of new technology, creating a holistic view of customer data that solves these issues is easier, and more cost-effective than you might think. A customer data platform is a marketing technology that enables brands to integrate all types and formats of customer data to build a golden record of a customer. This includes both batch and streaming data, anonymous-to-known behaviors, preferences, and purchase history, which enables hyper-personalized cross-channel customer interactions in real time with the added benefit of a reduction in the risks associated with siloed data.
According to systems integrator Dimension Data’s “Global Customer Experience Benchmarking Report”, only 48 percent of executives have a customer analytics system, and only 36 percent have a big data analytics solution in place. Companies embracing analytics and big data have a distinct advantage when it comes to both personalized customer experiences (CX) and risk avoidance.
Risks Mitigated
With the vast amount of customer data most marketers have at their disposal today, compliance risk is one of the biggest concerns. New marketing technology can lower these risks by helping you achieve compliance with regulations and industry mandates such as GDPR, HIPAA, PCI, and GLBA that focus on personally identifiable data.
One of the best ways to decrease compliance risk is by linking a customer data platform to a customer preference center. Providing a consent-based preference center for individuals to select the exact ways they want their data accessed, processed, and forgotten. It should also enable them to set their preferences for communication across all interaction points along the customer journey. This creates a closed-loop process between data capture, preferences, and use. This approach will ensure a superior and personalized customer experience, while reducing compliance risks. This also delivers high value to consumers, providing the option to opt-in rather than opt-out of your communications.
A CDP can also lower costs and reduce the efforts of maintaining and managing customer data. For example, automating manual data processes, Xanterra Travel Collection reduced the number of hours required to prep data by 80 percent. That efficiency not only reduces marketing costs, it also increases marketing performance by allowing Xanterra to get new communications and offers in market faster and enables its marketers to focus on higher-value activities.
Golden Record Achieved
Through probabilistic and deterministic matching algorithms, a customer data platform creates a singular, accurate, and continuously updated golden record of each customer. CDPs with streamlined master data management capabilities also ensure that as data is curated in creating precise customer and household views, there is proper data stewardship and governance in place to ensure quality. This solves customer identity challenges that are essential to risk avoidance and will quickly surface any data quality issues.
According to estimates by The New York Times, most data scientists spend 50 to 80 percent of their time prepping data. Now, more than ever, maintaining data quality to cut that prep time is imperative. And, as it turns out, it is profitable as well: Companies that regularly maintain their database can see 66 percent higher conversion rates than those that don’t, according to research from Dun & Bradstreet and NetProspex.
The most important risk avoidance, ahead of regulation, is ensuring the business itself is future proof. Businesses need to continually innovate customer journeys in ways that take advantage of emerging technologies. This requires an open garden approach that allows for new sources of data and new touchpoints in the future, including real-time engagement through mobile, social and Internet-of-Things (IoT) touchpoints.
As an enterprise solution, a CDP can help you bring together data from across the organization. By knowing all this is knowable about your customers, you can deliver relevant, personalized engagement across channels and interaction touchpoints. And just as importantly, it enables you to decrease the risks associated with managing volumes of customer data, improve data quality and maintenance, ensure compliance, and enhance collaboration — all while improving the customer experience and building a profitable competitive advantage.
A version of this post originally appeared here.