The right data strategy is the foundation for better customer experiences
Data collection is changing, and organizations must look to alternative ways to collect, organize, and gain insights from their customers.
In association withAdobe
Third-party cookies might be going the way of the dinosaur, but organizations will still need data about their customers’ online behaviors to deliver the personalized experiences they expect.
This means a shift in data strategy to focus on multiple types of first-party data, collected with customer consent. First-party data is data that customers agree to share with brands, including their preferences, online behaviors, and personal information. And while first-party data is a rich source of intelligence, it often lives in silos and is unorganized, rendering much of it useless when it comes to helping the organization drive better decisions and actions.
This is where a customer data platform (CDP) shows its value as a “persistent, unified customer database that is accessible to other systems,” according to the Customer Data Platform Institute.
Creating a full customer profile
A CDP is a foundational layer for enterprises that manages and protects customer data, which is the bedrock for customer experiences,” explains Ryan Fleisch, head of product marketing for real-time CDP and audience manager at Adobe. By collecting and normalizing data in real time from a variety of sources—transactional, behavioral, and demographic—a CDP presents a single, focused view of an individual. This focused view assists enterprises in delivering the ideal customer experience to that individual.
Fleisch notes that successful CDPs must excel at these core five abilities:
- Ingest data from different sources to create a 360-degree view of a customer
- Unify data to assembles a cohesive customer profile
- Keeps data fresh and accessible in real time
- Ensure compliance with all regulations and policies, which are frequently shifting
- Effectively use the data for customer insights and action
Because CDPs use consented, first-party data, they have quickly become an important solution for managing customer data in a future-proof way. During the last 18 months or so, as data deprecation has accelerated, companies have recognized an urgent need to get smarter and more responsible with customer data.
Respecting customer data is a big deal
Consumers are tired of companies that use and abuse their personal information, without permission and for profit. In response, data regulations have been created to give consumers more transparency, choice, and control over how, where, and when their data is used. Regulations such as the EU’s General Data Protection Regulation and the California Consumer Privacy Act, have changed the way data can be collected and the appropriate customer consent required to collect that data.
Integrated data governance capabilities, provided by CDPs, allow companies to properly and consistently apply both regulatory rules and customer preferences across every customer interaction. “You need to make sure you have a strategy that actually builds trust with your customers and serve that as a foundation for every other experience and touchpoint to follow,” says Fleisch.
Finding value in customer data
Because CDPs are built on consent-based data that customers willingly share with brands, the data is inherently higher quality, giving companies valuable insights into their customers. Historically, companies relied heavily on third-party cookies, but these cookies only provided crumbs when it came to holistic understanding of a customer. CDPs offer a deeper view of a customer based on first-party data, which is something organizations will need as third-party cookies cease to be supported by browsers. Safari and Firefox, for example, have restricted third-party cookies for years. And, Google, whose search engine Chrome claims 63% of the global browser market, is (slowly) working out a plan to kill cookies.
Integration is one of the key reasons that CDPs offer a deeper view of a customer than cookies. CDPs can integrate with other technologies and data sources, connecting and activating—in real time—both online and offline data sitting in silos across an organization. CDPs can be thought of as the brain that powers all customer experience tools, the glue between marketing and other systems. “When you think about providing a connected experience for a customer, you don't want to have a web of completely disparate systems,” says Fleisch.
In fact, what you want is one centralized brain to manage data decisions and understand the next best experience for the customer. CDPs can act as that centralized brain—they provide information not just across different channels on the platform, but also to different teams across an organization. “The CDP is a perfect balance of getting a strong view of your customer and making sure all that data is actionable in real time,” says Fleisch. By “real time,” Fleisch is referring to latencies of milliseconds, instead of hours or days.
This real-time intelligence helps brands build strong relationships with customers by meeting them where they are, with exactly what they want and need. According to the 2022 Adobe Trust Report, 72% of consumers say their trust for a brand increases when content is relevant and delivered at the right time and place.
The level of personalization customers demand can only happen with real-time action on customer data. For example, everybody likes offers that save them money, so sending customers a coupon for services or products is a good enticement—but only if it is a coupon they’ll use. A generic coupon or, worse, one sent to a customer that doesn’t fit the target demographic, may decrease trust in a brand.
Real-time data personalization for customers
CDPs are applicable across industries and regions. For a sizeable company with more complex deployments, Fleisch notes, CDPs may be used to provide greater customization and sophistication around how data is handled and governed across an enterprise. For smaller companies, use of CDPs may be more marketing focused, led by a team that is keen to deliver consistent experiences, from customer acquisition through retention and loyalty.
For example, London-based TSB Bank determined it needed to unify its customers’ banking experiences across channels, especially with more of its customers going digital. Other objectives were to provide customers with the most relevant content in real time, establish stronger consistency between online and in-branch transactions, and to move away from third-party cookies and toward consent-driven first-party data.
According to Mike Gamble, director of analysis and design for TSB, “We needed a complete picture of every person who banks with us, from their history to their needs to how they move through the customer journey, and that meant centralizing our data on a single platform.” TSB customers who browsed new homes online, for example, might receive information about TSB’s mortgages. Just one year after implementing a CDP, the bank saw a 400% boost in loan applications.
As a first step toward exploring a CDP, Fleisch suggests confirming the need and use case(s) for your organization. Next, ensure you understand the long-term needs of your business, and keep that vision top of mind. “Think long term about how a customer data platform can truly unify data, connect teams, and find value in all of that customer-provided data without running into dead ends down the road,” says Fleisch.
This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff.
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