What's common among Google, Netflix, and Amazon? They understand their customer's likes and dislikes extremely well. Every communication from them is centered around the customer and not around their business. Recently watched a documentary on Netflix? Netflix sends an email with recommendations based on your viewing patterns. Read a business book on Kindle? Amazon will send you emails with similar recommendations. These companies do not take the one-size-fits-all approach to marketing. Instead, they personalize every communication making each into a one-to-one conversation with the customer. Businesses achieve this by leveraging big data analytics solutions. Customer data platforms (CDP) provide marketers a great packaged solution to speed up creation of a strong analytics solution that understands the behavioral patterns and enables your company to make data-driven marketing decisions.
CSPs help marketers personalize email communication
Customers use multiple channels and devices for information, entertainment, and to socialize with others. Until recently, it was a herculean task to consolidate the multi-channel interactions of the customer, but with the help of CDPs, marketers can now aggregate data across devices and platforms including voice, email, online visits, etc. This enables marketers to understand their customers better. Citing Toyota's approach to sales, Treasure Data shows how the CDP is helping companies drive sales.
By tracking various interactions on their websites and third party sites, Toyota is now able to personalize the overall experience for its customers.
In a similar way, Dr. Martens, an iconic British footwear brand was able to leverage unified customer data to bring significant results. The brand faced a peculiar problem; it had customers ranging from the age of 7 to 70! So, when they decided to customize their messages to the audience, they did not know how to gauge the age group and personalize their content. They used CDP to create a centralized, real-time data hub to profile their customers. This carefully built exercise helped them to make changes to their communication. For example, they started adding customer names in the subject lines and in the text body, which resulted in doubling the open rates. They personalized the communication to the extent that it helped the customers build an affinity for the brand. For instance, the latest purchasers were shown the information on shoe care kits, while a vegan purchaser was shown information on vegan leather products. The brand used the CDP to ultra-personalize the messages across the sales cycle, which helped Dr. Martens to cut through the digital noise and engage with its audience effectively.
In another example, The Economist has been using CDP to understand their existing and prospective readers to provide personalized content that is customized to the reader's areas of interest. This approach helped them increase their subscription 4x times in 3 years.
As you can see in these examples, CDPs are helping organizations build long-term engagements with their client. According to the latest report released by the Customer Data Platform Institute, over 2,500+ companies have already deployed CDP and the market is poised to grow to over $1 billion by 2019.
So, what makes CDP so popular among marketers? David Rabb, founder of the CDP Institute, says, "In the past, marketers weren't able to build their own databases, and that's the key thing going on here. It was too hard technically. The software is now smarter, and there are a lot of (Software-as-a-Service) data systems designed to be more accessible.", he added.
Mani Gandham, CEO of Instinctive further explained, "Companies started to build their own separate database that could plug into both CRM and customer support systems, so there was a full history and profile of every customer from sales to support. Eventually, this became an industry of its own with lots of vendors, given all the different sources and systems that need to be integrated."
Customer data platforms for personalizing email marketing
According to a report by Radicati, there are over 4.9 billion email accounts across the globe as of 2017; almost three times more than Facebook and Twitter accounts combined. That is why marketers still use email marketing to engage with their clients. Besides the extensive reach, marketers also prefer email marketing because of the high ROI. According to Campaign Monitor, for every $1 spent the ROI generated by email marketing is $38!
According to McKinsey, email marketing is 40 times more effective than Facebook and Twitter. By personalizing the content of email marketing, you can significantly increase the ROI to the next level. According to Experian, emails with personalized subject lines have 26% better open rates, while DMA reports that segmented audience campaigns have resulted in a 760% increase in email revenue. Personalization and segmentation, therefore, can change the marketing game for businesses. In fact, personalization of messages has become so important that if the recipients do not receive a personalized message from the brand, they do not hesitate to unsubscribe from the email list. A research by Silverpop states that almost 50% of the people unsubscribe from the list if the emails are not personalized.
This is why you require CDP. It provides all the data about the customer in a unified platform, which you can use to analyze their behavior, profile them, segment them according to the various attributes, and then target them by sending personalized emails. The entire process might take time, but as Kyle Duford, the global VP of Dr. Martens said, "It's more important to me that you have a great brand experience today than whether you purchase [today]."
CDP enables you to build a personalized long-term relationship with your client rather than cold-selling them. This in turn leads to better ROI and value from the marketing efforts.