We have the technology. According to a McKinsey report, technology is now at a point that marketers can effectively deliver real-time personalisation. The pay off they say is improved customer experiences and ultimately, real returns for businesses.
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“It can boost total sales by 15 to 20 per cent, and digital sales even more while significantly improving the ROI on marketing spend across marketing channels.”
The heartbeat of modern marketing: Data activation and personalization is authored by Julien Boudet, Brian Gregg, Jason Heller and Caroline Tufft, and examines how activating data unlocks true personalisation.
While using data and insights to improve the customer experience is well utilised, organisations often hit a roadblock when they attempt to scale, the report said. When customer experience experiments are pushed beyond isolation “they smack against the challenge of understanding what to prioritize”.
Current strategies of customer-relationship management (CRM), master-data management (MDM), and marketing-resource management (MRM), while critical, often “don’t take full advantage of digital signals customers provide”.
This is where the customer data platform (CDP) comes in. CDP is a data discovery and automated decision-making platform that operates in real time. According to the report, this platform allows marketers to scale their customer interactions effectively as they occur. The platform is “gradually becoming an industry-standard concept, with a small but growing cadre of third-party platforms emerging that will soon shape the category,” the report said.
One of the advantages of the platform is that it doesn’t require a system overhaul and can “Piggyback” on existing data management and customer relationship management. Whether incorporating the platform into current systems or starting from scratch it requires a “mastery” of four main areas, the report said.
- Data foundation: Building a rich view of customer
By combing and utilising existing data, CDP can provide a more “meaningful” customer profile, which is then accessible across the organization, the report said. “Many companies have the elements of a relatively complete view of the customer already. But they reside in discrete pockets across the company. Just as a recipe does not come together until all the ingredients are combined, it is only when data is connected that it becomes ready to use.” The insights can inform more than just campaign response, for example, it may drive future product development, the report said. The process is powered by analytics and is ongoing, improving as it is fed more data. “Over time, as the system “learns,” this approach generates ever-more-granular customer subsegments. Signals that the consumer leaves behind (e.g., a site visit, a purchase on an app, interest expressed on social media) can then expand the data set, enabling the company to respond in real time and think of new ways to engage yet again.”
- Decisioning: Mine the data to act on the signals
The decisioning process enables marketers, through a semi-automated process, to deliver more personalized content through the right channels at the right time. Matching customer profiles to the most relevant content through a decisioning engine.“This allows companies to make major improvements in how they engage with their customers by developing more relevant, personalized engagement, within a single channel or across channels, based on a customer’s behavioral cues.”Once again, this process continuously improves as repeated testing “validates and refines hypotheses and outcomes. Over time, these can become increasingly sophisticated as models and algorithms build on each other,” the report said. “As complex as this may seem, a semi-automated decisioning engine prioritizes the offers and experiences proven to have the highest rate of return.”
- Design: Crafting the right offers, messages, and experiences at speed
“Understanding your customers and how to engage them counts for little without the content to actually deliver to them,” say the authors. A more holistic cross-channel approach is where organization can find real value, the report said. Forming teams from across all functions will improve content, content management and ultimately the customer experience.“Real benefits can only occur when companies shift to “war rooms” of people from relevant functions (marketing, digital, legal, merchandising, and IT/DevOps) who focus on specific consumer segments or journeys. These teams have clear ownership of consumer priorities and responsibility for delivering on them.”
- Distribution: Delivering experiences across platforms
CDP and its connection to other martech evolves distribution channels beyond simple content delivery. To a feedback loop “that sends customer response, engagement, and conversion data back into the CDP,” the report said. “Connect the CDP engine, with its predetermined triggers and tagged content, to these distribution systems, and a formerly blunt marketing instrument becomes a far more directed one sending specific messages to distinct customer subsegments across all addressable channels.”
McKinsey said it is necessary to balance the impact of CDP versus the resources required for implementation. A case driven approach to CDP is required, “Not all data-activation efforts are created equal”.
“Unlike a wholesale IT transformation, deploying a CDP isn’t a replacement of current customer-data systems, but rather an operational solution that can piggyback on existing systems. In our experience, many marketers already have a large part of the marketing technology equation in house; they’re just not using it properly,” the authors write.