Businesses that claim to be customer-centric are a dime a dozen these days. More often than not, companies position themselves as customer focused without executing it well enough to have a competitive advantage or an impact on the bottom line. Although 81% of the executives polled in the Dimension Data Global Customer Experience Benchmarking Report recognized that customer experience is a competitive differentiator, only 13% rate their company’s customer experience efforts as a 9 or 10. So what exactly is the challenge? According to 44% of the respondents, customer experience is simply too difficult.
As challenging as overhauling a brand’s entire customer experience efforts may be, it is still possible to improve the experience and increase revenue within the framework of current engagement systems. The most efficient way to do so is by using a customer data platform (CDP). By effectively powering intelligent cross-sell and upsell, along with relevant targeting, a CDP will allow your company to create frictionless customer experiences that positively impact sales. The three key performance indicators (KPIs) that brands will use to measure increased revenue when implementing a CDP are:
- A rise in revenue per customer
- An improvement in customer retention
- An increase in customer acquisition
These metrics may seem straightforward, yet most brands are falling short of optimizing their results against them. A robust CDP is essential to both moving the needle on these results and gaining competitive advantage from customer experience efforts. Customers today want to feel both understood and valued. According to the Wantedness study by Wunderman, nearly 80 % of U.S. consumers say they expect brands to show they understand and care about them before they consider making a purchase. Additionally, 56% of the consumers polled in the same study said they’re more loyal to brands that get them or show a deep understanding of their purchase history, preferences, wants, and needs.
For most marketing and martech professionals, delivering those expectations are a tall order. Few marketers can consistently deliver truly personalized and relevant experiences across all channels. The reasons? What marketers traditionally have known about customers is limited, stuck in siloed databases, and marketers are unable to keep up with the cadence of today’s always-on consumer.
Enter the CDP
A CDP connects data from across your company in real time to enable an always-on, always-processing holistic view of your customers. Marketers can use that unified and complete golden record to deliver unique and relevant experiences. Through using a CDP, marketing professionals will have easier access to robust and timely data and an advantage over competitors who lack a robust CDP, and so are more likely to deliver a customer experience that improves revenue, retention and acquisition rates than their non-CDP using peers.
CDPs also allow marketers to perform advanced predictive modeling and enhance their customer data with information to help determine customer intent and anticipate their preferences. This enables the use of highly personalized tactics, such as next-best actions and dynamic customer journeys that are tailored to individual consumers. Because the data is available in real time, brands can now react at the speed of the customer, which is essential for delivering the real-time 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 a revenue increase by 6 to 10 percent, at a rate of two to three times faster than those that don’t.
Investing in a CDP for customer experience provides marketers a myriad of opportunities to increase revenue: including increasing upsell and cross-sell, wallet share, average order dollar value, purchase frequency, and customer lifetime value. Additionally, 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.
As brands struggle to keep up with competitive digital transformation efforts, it is imperative that marketers leverage the correct technology ahead of the competition to build superior customer experiences now. Not only because it will deliver a game-changing return on investment, but it could also provide more of a competitive advantage than you would think. According to Econsultancy, 43% of organizations claim to have a single view of the customer, but a mere 12% say they’ve implemented the required technology to achieve that holistic view.
By bringing data together from across their organization and unifying it for a complete view of the customer, marketers are able know all that is knowable about their customers. In doing so they have a distinct advantage. A Forbes Insights and Turn study found that leaders in data-driven marketing are 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. The reason: the customer experiences these leaders deliver by using data-driven marketing are personalized and provide a better experience by honoring the needs and wants of each customer.