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How to build the data infrastructure to get personalized customer experiences right

(Image credit: Image Credit: M247)

As the pandemic has accelerated the growth of online shopping, customers have come to expect a personalized digital experience. But as a new report has made abundantly clear, customer expectations have already outpaced brands’ ability to deliver these experiences. 

The foundation for delivering any personalized customer experience is quality data. Up until recently, third-party data has acted as a crutch for the digital marketing strategies of almost every business, but as major players like Apple and Google have pivoted to a more privacy-forward approach, the tides have changed. The onus is now on businesses to effectively use the first-party data collected directly from customers. 

That’s no bad thing. First-party data actually gives businesses much more specific, direct insights about their customers, unlike third-party data which largely makes broader generalizations. When used effectively, first-party data is the secret ingredient that will enable your business to deliver truly personal experiences.

Personalize or perish  

A year into the pandemic and it is clear that personalization presents a real opportunity for businesses. Given the convenience of online shopping, more than half (60 percent) of UK consumers say they’re likely to become repeat buyers after a personalized shopping experience with a retailer. As a result, investing in personalization promises a powerful return, particularly when it comes to improved customer retention. 

This isn’t something that has passed businesses by. In fact, the State of Personalization study found that 73 percent of UK retail and e-commerce businesses believe personalization is now table stakes in today’s digital economy. 

Nonetheless, 39 percent of businesses see data as the biggest challenge to personalization, with many still uncertain of how to get the technical foundations in place for a successful personalization strategy. 

The right foundation  

While the pandemic has forced companies across almost every industry to embrace a digital-first approach, simply moving online isn’t enough. True digital transformation means paying attention to the technical foundations, and when it comes to personalization, there is a pressing need to tend to the data infrastructure needed to deliver quality customer interactions. 

As the number of interactions with customers increases and the variety of possible touchpoints increases - be that on social media, chat functions or websites - businesses find themselves overwhelmed with data. 

Personalization, like any insights-driven customer experience, requires a single, trustworthy source of information from which to guide and influence your activity. To get there, the key is to sort that influx of customer data into a robust foundation onto which other tools can be integrated. 

Customer data platforms (CDPs) are the best way to consolidate and organize the data your business is collecting, to create a complete picture of your customer. By using a CDP as an accurate central resource, teams are able to access reliable customer data and prevent the kind of data silos that can lead to error-ridden personalization campaigns. In most instances, these errors are a result of disparate internal teams who are responsible for their own individual aspect of a customer relationship being unable to communicate and share insights even if the desire to do so exists. In building this central foundation, a business can then add a range of martech tools to suit its specific needs and goals, and build a flexible stack that can evolve with the company over time. 

A CDP can also help create clear audience profiles that allow retailers to plan and deliver hyper-targeted experiences based on the demands and preferences of each customer, while building on their previous interactions with the brand. 

The right channel

The average customer now has 10 or more channels through which they can communicate with a brand, but there is an expectation that with each new interaction, the business will also have a strong and continued awareness of the customer’s history with the brand. 

This can only occur when different departments are not operating in silos, but instead are able to call upon data from each aspect of the business. Be it through social channels, apps, CRM, payments, and more, the most efficient way of delivering these consistent omnichannel communications is by centralizing all customer interactions through a CDP - and ensuring this is widely accessible and available to team members across every part of the business.     

Businesses that want to remain competitive are exploring new technologies to engage customers including mobile apps, new social media platforms, voice and smart connected devices. With each innovation, there is a new cohort of customer data that, when managed and analyzed correctly, can offer fresh new insights into your customer. When this data is centralized into a useful form, marketeers can create bespoke customer campaigns based upon direct insights into their activity. 

An excellent example is sponsored exercise apps that record exercise milestones, such as running 10,000 miles, which provide opportunities to engage customers with the latest shoe range through congratulatory, bespoke email campaigns.    

Marketeers spend so much time carefully crafting a customer journey that delivers results, but without careful analysis of first-party customer data this strategic planning is tantamount to informed guesswork. Through a CDP, it is possible to map these interactions in real-time and nudge customers towards a positive result. 

As personalization is such an effective means of building customer loyalty, the ability to deliver a thoughtful experience through a customer's entire journey across multiple channels is a powerful way to ensure customer retention. By linking the initial marketing contact on social media into the sales funnel through the brand’s website and then beyond with chat functions and email marketing campaigns, the brand is able to deliver truly personalized experiences across all channels and internal departments.

Keep getting it right 

The cornerstone of personalized customer experiences is an understanding of first-party customer data. But without that central data foundation, it is very difficult to deliver that personalized customer experience across multiple channels and contexts. 

By centralizing all of their first-party customer data, businesses are able to not only meet customers’ high expectations today, but also to grow loyal customer relationships long into the future.

Katrina Wong, VP of Product Marketing and Demand Generation, Twilio Segment (opens in new tab)

Katrina Wong is VP of Product Marketing and Demand Generation at Twilio Segment.