Forbes interviewed Arun Kumar, Hero Digital’s EVP of Data and Insight, and Mike Wallgren, Hero Digital’s VP of Marketing Technology, in an article titled: How Retailers Can Better Leverage Customer Data Platforms To Make Their Customer Data Matter.
Learn how business leaders create a unified customer experience, increase customer satisfaction, and earn trust. Read the full article below.
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As the retail industry continues to grow and evolve, modern retailers need to understand how Customer Data Platforms (CDPs) can help them create a unified customer experience, increase customer satisfaction, and continue to earn the trust of their customers by protecting data and respecting privacy. CDPs have come a long way since their inception and now offer unparalleled insights into customer behavior that can be used to automate campaigns and increase engagement.
We’re fortunate to have Mike Wallgren, vice-president of marketing technology at Hero Digital to help us talk through and navigate the complexities and fluid evolution of the marketer/customer relationship.
Gary Drenik: Why is the digital customer experience the most critical component in the commerce and retail industries? And how does Hero Digital help retailers with this?
Mike Wallgren: Digital customer experiences are now the most important factor in a retailer’s success, as digital is almost always a part of the shopping experience. Retailers must create and optimize their online and offline digital customer experience to increase customer satisfaction and loyalty.
According to a recent Prosper Insights & Analytics survey, 86% of customers research products online before purchasing in person or at a store. This tells us that online research has become an integral part of the customer shopping experience—almost second nature—and a critical tool for retailers to understand consumers’ needs and preferences.
Prosper – How Often Research Products Online PROSPER INSIGHTS & ANALYTICS
Hero Digital provides these end-to-end CDP solutions to their clients to help them unify their disparate customer data sources, gain more accurate insights into customers’ needs and preferences, and make data-driven marketing decisions all while protecting the data of their customers. Once the endless troughs of data are run through a CDP, it creates a unique profile for its customers, allowing retailers to automate their processes to ensure they are seamlessly delivering personalized experiences to every customer.
Drenik: What are CDPs, how have they evolved, and why do they increase customer satisfaction?
Wallgren: CDPs’ sophistication has paved a solid pathway for greater customer satisfaction. CDP software solutions enable businesses to collect, store, and analyze customer data from multiple sources and dimensions.
The concept of CDPs has changed over time in response to technological advancements. Initially used mainly for marketing automation, CDPs have grown beyond this purpose and have become a way for companies to obtain a 360-degree view of their customers across all platforms. Utilization of today’s CDP has led to a 9.1x greater increase in customer satisfaction. This increase can be tied directly back to the ability to understand customers’ preferences and attitudes individually, leading to more meaningful touchpoints.
Drenik: Why do marketers and brands consider a CDP important to their privacy and compliance efforts?
Wallgren: Data privacy is top of mind for every person, and today’s consumers are keenly aware of how their data is tracked and used for marketing purposes. This makes the use of CDP that much more important. Marketing to consumers has become—in many instances—a partnership. Brand consumers agree to divulge a certain level of data to receive special offers on relevant items. That is the understanding. However, according to a recent Prosper Insights & Analytics survey, approximately 60% of people don’t like being tracked, with even more agreeing on legislation restricting data tracking.
Prosper – Feel About Advertisers Who Access Personal Data PROSPER INSIGHTS & ANALYTICS
The catch is that customers expect personalization but don’t want to give up data. The main reason for consumer hesitance is not knowing how data is used.
CDPs address this through the creation of a unified customer profile. Implementing a CDP allows organizations to see and govern customer interactions. This, in turn, gives them the means to create specific rules around data governance and privacy, which drives overall compliance with specific privacy regulations.
At the end of the day, what we have found is that if the retailer is providing enough value to the customer, then ultimately, they are more willing to give that data information over, which only enhances the user profile created by the CDP while still being compliant to privacy.
Drenik: What kind of a return or benefit could a retailer expect from using a CDP?
Wallgren: For marketers, investing in a Customer Data Platform solution can provide unprecedented customer insight which is especially important when analyzing this recent data released by Prosper Insights & Analytics.
According to a recent Prosper Insights & Analytics survey:
- 71% say that email advertising, internet advertising, and mobile websites and apps are what triggered them to do an online search
Prosper Online Search Triggers PROSPER INSIGHTS & ANALYTICS
- 87% say they use some form of social media platform regularly to shop
Prosper – Use Shop Now Feature on Social Media Platforms PROSPER INSIGHTS & ANALYTICS
This data demonstrates that retailers and customers want the same endgame: a safe and personalized experience. Doing this effectively can result in customers becoming repeat buyers and increase overall brand loyalty.
Implementing a CDP enables them to target customers more effectively and efficiently and reduce costs associated with marketing efforts through enhanced test and learn campaigns, while still complying with privacy regulations.
Drenik: What should marketers look for when selecting the right CDP for them? And what are some examples of specific CDP use cases available for retailers?
Wallgren: A CDP should have data enrichment, segmentation, analytics, and reporting features essential for creating comprehensive customer profiles. When choosing a CDP, marketers should evaluate the features of prospective solutions to ensure that they meet their specific needs and are able to integrate with other current systems like CRM and DMPs. This offers scalability to capture real-time or near real-time data processing capability and adjust to a growing customer base.
Additionally, marketers should explore use cases available for retailers who want to maximize their full potential. For example, retailers may use a CDP to customize customer experience by sending personalized offers based on previous purchases or interests. They could also obtain insights into consumer behavior and geographic positions to develop automated campaigns accordingly.
Selecting the best CDP requires careful examination of technical capabilities and use cases applicable to your business type and objectives. Once a CDP has been researched, analyzed, and selected, it’s time to consult with a professional to ensure the right decision has been made for the company and its brand(s). Hero Digital is an excellent soundboard for brands to check that final box before implementation begins.
Drenik: How can retailers better leverage their customer data or customer data platform now?
Wallgren: Understanding the value of customer data and implementing a comprehensive CDP is essential for retailers to create a unified customer experience and increase satisfaction. At the same time, businesses need an effective data governance strategy to ensure customers’ personal information is securely managed and not misused or abused, which in the long run can critically affect brand loyalty.
For businesses or marketers looking to learn more, I encourage them to review this comprehensive CDP report we wrote earlier this year.
Drenik: Thanks, Mike, for your insights on how CDPs offer immense value for modern retailers looking to provide unified experiences across all channels. Marketers and consumers will appreciate the sophistication being applied to protect clients’ data privacy and increase satisfaction levels. A good takeaway is to remember that even with the adoption by companies to create a more meaningful customer experience, CDPs are relatively new, with their uncharted potential still undiscovered. Thankfully, Hero Digital is leading the way.
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