How to Organize and Maximize the Value of Customer Data
We often hear that data is the oil of the digital economy. Very well — but how do companies acquire that resource sustainably and marshal it to reach new prospects and better serve existing customers?
As the CEO of customer data platform Amperity, Barry Padgett has answers to those questions. He dove into them with Street Fight.
Why does it remain challenging for advertisers to organize customer data and make it actionable?
The simple answer? Customer data is a chaotic mess. At most companies, the data has been generated by a variety of different systems across different teams over a long period of time. We’re collecting more and more data every day via an ever-growing stack of tools, from marketing clouds to e-commerce apps to loyalty programs to point-of-sale systems. All of these tools are engaging customers — and none of them were ever built to work together.
IT teams are now charged with bringing together an offline POS system built in the ‘90s, an online events system built three years ago, and a brand-new SMS orchestration platform. When we’re trying to keep a customer apprised of new services, we need all of these systems to identify one single individual through disparate datasets so we can point them to the next best action. It’s next to impossible to deliver a unified, seamless experience for customers across all of their interactions with a company — from browsing the website to logging a support ticket to picking a product up curbside — when the data lives in silos across the organization.
First-party data’s star has been rising due to privacy changes. How are brands using FPD to hone marketing and drive growth?
As Google plans to phase out third-party cookies and a growing number of consumers decide to opt out of app tracking, the quality of third-party data systems has declined steeply. Advertisers are grasping for new ways to target online ads, personalize the user experience, and measure ad effectiveness. Smart brands aren’t waiting around for ad tech players to come up with an alternative; they’re using first-party identity data collected directly from users with their consent to hone marketing and drive growth.
There are a few key elements to a successful first-party data program. First, brands must establish and maintain direct relationships with consumers. The most comprehensive first-party data assets and the most accurate identity graphs are based on a unique and ongoing relationship with real people. This means crafting the best customer experience possible so that people will feel good about sharing their information with you.
Next, centralize personally identifiable information (PII) data into a first-party ID graph. Collecting permissioned data is only the first step; the real power comes when brands can build a first-party ID graph that synthesizes the best available PII from across all consumer touchpoints. This requires a customer data platform (CDP) that can handle messy and multi-sourced PII at a massive scale.
Finally, build a comprehensive and rich customer database. With the data in one place and identities resolved, brands should develop and maintain persistent customer profiles that can serve as the basis for analytics and personalization for teams across the organization.
What cutting-edge technologies, for example AI/ML, are affecting customer data-driven marketing?
Companies have long chased the elusive Holy Grail: the unified view of the customer. They’ve tried everything from match merge rules to ETL to data lakes, but each of those tools are inefficient, difficult to build, and democratize access to once built.
Fortunately, new technology has become available in just the past couple years. Advances in artificial intelligence and machine learning are now taking advantage of cheaper cloud computing costs and out-of-the-box integration capabilities to manage massive datasets at scale. That being said, many companies are stuck on the tools carousel, bombarded with options that claim better ways to manage events or build emails. But do they deliver?
In reality, these tools, as great as they are, are dependent on a unified and nourished view of the customer. No matter how much you invest in cutting-edge technologies, they’re only as good as the data you feed them. You have to solve the underlying data gap before you can rely on tools. With the right foundation in place, companies can trust that their first-party data is accurate and available to serve the teams and tools that need it to power positive customer experiences.
Why should brands identify their customer database as an asset for funding or M&A?
In today’s uncertain economy, businesses are tightening their belts, shareholders are maintaining a watchful eye on operations, and investors are scrutinizing every investment before committing to funding. In that environment, it’s especially important to calculate a company’s valuation beyond revenue growth, profitability, and the total addressable market.
Customer data is an often-overlooked metric that can help investors understand a company’s true worth. Because many companies are still product led, and looking at traditional business metrics without a customer lens, they neglect to include this powerful — and incredibly valuable — dataset as part of their assets or valuation. Whether it be for funding or mergers and acquisitions, brands should embrace their customer data as a key component of their company value.