Digital has been the key to survival for many brands since the beginning of the global pandemic. Businesses of all sizes have been forced to take the majority of their customer interactions online, embracing e-commerce and on-demand models almost overnight.
The resulting explosion of customer touchpoints - from websites and apps to payment, messaging and support - has also generated more customer data, a now-essential resource for driving revenue growth and staying competitive in the digital-first economy.
According to Experian, companies that leverage their first-party data see 50 percent better customer experience, 45 percent better insight for decision-making and 44 percent more innovation. To achieve the same and take advantage of this wave of customer data, brands are rapidly redesigning their tech stacks to accommodate the latest and greatest data-driven tools.
But what do brands need to consider when building their stack? And how can they ensure first-rate customer experiences and maximize their revenue growth in the process?
Before you start building the perfect data stack, you’ll want to identify your key business objectives. Think about the digital channels where the majority of your customers interact with your brand, and what segments you’re trying to target with your product or service.
If you can visualize what you want to get out of your stack, you can then determine which specific tools will best fit your needs.
There’s a near endless number of tools now available on the market, so I’ve focused on four key use cases to highlight the type of tools you might want to consider - and why.
1. Analytics - the key to understanding your customer
The first and most obvious application of customer data is to understand your customer.
You’d be surprised by how challenging that can be for so many businesses, so having the right analytics tools at your disposal can give you an amazing advantage.
These powerful tools can help you to understand how customers are interacting with your products and services, so you can map out a better picture of their needs, desires and preferences.
Analytics tools allow you to map out your customers’ journey with your brand, from the ads they click through to the products they purchase, or the places where they abandon a shopping journey. By analyzing this customer behavior, product teams can pinpoint which features are boosting engagement and which are creating friction, while marketers can gain insight into which channels and promotions are driving the most sales.
Some tools, like Mixpanel, are more suited to predictive analytics used in personalized marketing. Others, like Amplitude, are better for understanding user journeys and increasing retention. Google Analytics is another strong choice, and with over 28.8 million users, its popularity is not slowing down.
2. Engagement - turning insights into action
Once you’ve built a reliable understanding of your customer, engagement tools should come next - a way to build stronger relationships with your customers.
A powerful way to boost revenue, deepen loyalty and create brand ambassadors, customer engagement tools exist in many forms. One of the most is email marketing - email engagement grew by 78 percent in 2019, and it remains a powerful tool for engaging directly with customers, particularly when combined with personalization. Email and marketing automation tools like SendGrid and Airship can nudge former customers to take action and return to your product, while Twilio and Braze’s platforms send SMS and push notifications to smartphones to similar effect.
Other examples include live chat tools like Olark and Intercom, which can help nurture a long-term relationship between you and your customer by offering rapid, real-time assistance. Live chats are proven to encourage customers to convert - 41 percent of consumers have reported using live chat to make a purchase within the last year.
When picking an engagement tool, be sure to consider who your audience is. Some tools are designed for B2B and others for B2C communication; some are better suited for the enterprise, while others are optimized for small and medium-sized businesses.
3. Awareness - the power of attraction
Building a data stack that helps you engage with customers is one thing, but building one that attracts new customers is another.
If your objectives involve strengthening your search presence or boosting your site traffic, you’ll want to look into advertising tools like Google Ads, Facebook Ads, Snap Ads, NextRoll, and Criteo.
Having the right customer data in place means you can reach the right audiences with consistent, connected campaigns that work to boost brand awareness and encourage new sign-ups.
By integrating advertising tools within a robust data stack, you can also cut down the effort needed to make changes, empowering your team to test new channels instantly, without the need for engineering support.
4. Retention - essential for growth
In the last five years alone, the cost of customer acquisition has increased by over 50 percent, making it more important than ever to double down on customer retention.
The best way to stop customer churn is to keep customers engaged and ensure your product is still delivering against their needs. It’s also useful to look at your best customers, to understand what it is about your product that has kept them so loyal and help you deliver the same to more of your customer base.
Customer success tools like, Zendesk, Vitally, and ChurnZero are useful for monitoring engagement over time, helping you to spot retention issues while there’s still time to address them.
The foundation matters
Whatever tools you choose, they’re only as good as the data they’re based on. Any robust data stack relies on a strong foundation that feeds accurate, consistent data to all of the tools that need it.
Customer data platforms (CDPs) are your best bet for this - in fact, 29 percent of businesses now use one, up 150 percent from 2019. CDPs centralize, clean and consolidate the data your business is collecting, providing a 360-degree view of your customer.
As a central resource, a CDP prevents data silos and ensures that every team has live access to reliable, consistent information. The best CDPs also make it easy to build flexible data stacks, integrating new tools in just a few clicks.
Future-proofing your data stack
Building data-driven tools is a major sink of time and money, unless you’re the size of Amazon and have plenty of engineers to spare. Luckily, there are hundreds of independent solutions available on the market which can help you design the perfect data stack for your business and its objectives.
Build in flexibility from the start, and you’ll be able to adjust your stack as your business scales, so your customer data is always being put to the best possible use.
After all, in a digital-first economy, it can make the difference between your business and your nearest competitor.
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Tido Carriero, Chief Product Development Officer, Segment