How to maximize your customer data: A personalization masterclass
ClickZ’s most recent webinar, ‘Maximize Your Customer Data: The Personalization Masterclass’, contains practical guidance to help marketers take their data-driven marketing and ecommerce activities to the next level.
The webcast, produced in partnership with Customer Data Platform specialists Fospha, and now available for on-demand viewing, featured insights from McKinsey & Company and a fascinating ecommerce case study from Staples, the office supply retailer.
The session kicked off with a definition of personalization which was described as ‘communicating differently with a customer based on their characteristics, in order to optimize customer acquisition, retention and lifetime value’.
According to McKinsey, personalization can result in a sales uplift of 10%, and increase return on investment on marketing spend by a multiple of eight.
Read on for a summary of key insights from the webinar.
According to Fospha director Sam Carter, one of the principal reasons that companies are struggling with personalization is that they don’t have a holistic view of their customers, largely because data is siloed across the business. He said:
“Without fully integrated customer data, businesses are unable to fully engage their customers and drive conversions at sustainably low cost, retain customers and build brand loyalty.”
The need for a more rounded view of customers was underscored by our live webinar poll which found that only 5% of companies had a full, single customer view ‘they can leverage daily’. The vast majority of companies either have a ‘partial’ view of their customers, with only some of their data joined up (48%), or are struggling to access their customer data to inform their personalization efforts (35%). The remaining 12% said they don’t, or can’t, use customer data for personalization.
Sam stressed how focusing on the customer will ultimately pay dividends, quoting Amazon CEO Jeff Bezos who once said: “If you’re truly obsessed about your customers, it will cover a lot of your other mistakes.”
“We want people to have a delightful customer experience when they shop with us, so we use personalization in part to help us provide a more personalized and delightful experience on Staples.com.”
She described in detail how the goals of personalization included making it easy for customers to find what they are looking for, shortening the time it takes for customers to find the right products, and suggesting products customers will love.
Much of this personalization webcast was focused on how a Customer Data Platform (CDP) is the best way of ‘activating your data’ or ‘operationalizing’ your personalization efforts at scale.
Those who tuned into our attribution webinar in April, also sponsored by Fospha, will already be familiar with Gartner’s definition of a CDP as “an integrated customer database managed by marketers that unifies a company’s customer data from marketing, sales and service channels to enable them to drive conversion, increase lifetime value and manage costs versus revenue.”
As well as acting as the operational data store for companies who employ them, the webinar audience also heard how CDPs are also extremely valuable for providing insights, whether in the form of advanced and predictive analytics, or attribution and customer scoring models.
According to Jane Wong, engagement manager at McKinsey & Company, the focus when using a CDP should be on getting “the right data and not necessarily all the data”.
Incorporating a few key pieces of data into an integrated consumer data platform can uncover actionable insights and drive real value, she explained.
Companies need to take an iterative approach to personalization, and should “focus maniacally on incremental value”. She said that companies should seek to maximize short-term lift through a granular approach, while ensuring that tactics contribute and reinforce overarching enterprise customer strategy.
Source: McKinsey & Company
Sean Flavin, marketing technology leader for McKinsey and another one of our webinar speakers, built on some of Jane’s points by describing how agile marketing practices — borrowing principles from the world of agile software development — are integral to personalization success.
According to Sean, effective personalization is as much of an operational and process challenge, as it is a technological challenge. He encouraged companies to set up small, working teams or ‘pods’ — focused very much on action rather than planning — to tackle specific areas, for example analytics, execution or tech.
“We see agile marketing as a very effective way to scale personalization efforts,” he said. “My advice to you would be to start small. This is definitely a ‘crawl, walk, run’ scenario. Typically, what we like to do with clients is have them start with one or two channels, maybe it’s web and email. Start small, and build from there.”
Another important point made during the webinar was around the need to measure return on investment from personalization activities. Sam Carter stressed the importance of data-driven, multi-touch attribution models that show the value at each step in the customer journey.
Proving ROI at each stage can help to build momentum for personalization activities, and help to secure the further investment required for a more sophisticated approach.
The crux of Sean’s slides during the webcast was around the importance of setting up a decisioning engine as the ‘brain’ of the marketing function that can drive relevant, effective messaging using all available data.
He described how a decisioning engine, which the CDP feeds data into, was crucial for providing a consistent experience across channels, by automating decisions, offers and content displayed to a consumer based on a combination of triggers and customer data.
He said that such an engine was also valuable for avoiding ‘collisions’ between different personalization tasks and campaigns you may have running in the marketplace.
“I feel like a lot of companies are good at activating data in individual channels. Where they really struggle is the orchestration and sharing of data across channels … Once you’ve got that data centralized and once you’ve got those decisioning components centralized, [you are then in a good position] to connect to your outbound channels.”
The Maximize Your Customer Data: The Personalization Masterclass webinar, produced in partnership with Fospha, is now available for on-demand viewing.
To get in touch with Fospha, please contact email@example.com.