How to target the right audience using CDP — A Business Case
A customer data platform (CDP) collects and structures real-time customer data from various online and offline channels into individual and segmented customer profiles. Research suggests that 99% of marketers cite being able to create, store, and leverage universal 360-degree customer profiles as either important or extremely important[i]. Marketers are increasingly recognizing the power of getting actionable insights into customer data, and hence it is essential to understand how exactly CDP can be leveraged for this purpose.
How is CDP leveraged to target the right customer?
The process of customer targeting process comprises of three parts:
1. Capture Intent attributes from various sources by specifying Customer attributes: A CDP facilitates data integration from multiple sources. Some of the primary sources include: 1) Websites, 2) Point of Sale, 3) Mobile Apps, 4) CRM, 5) E-Commerce sale & purchase history ad platforms, 6) ad networks, 7) DSPs, 8) Lead capture forms, etc.
Specify Customer Attributes: One needs to specify an audience’s attributes and the dimensions you should apply to define it better. That’s the critical stage of building a precise audience in your customer data platform. The accuracy and complexity of the audience attribute translate into high-precision targeting. Some of the characteristics include: 1) Personal information, 2) Location, 3) Demographics, 4) Historical Purchase patterns, 5) Buying Behavior, 6) Web and in-app actions and engagement details.
2. CDP Analytics: Once the CDP collects the data sources, the system can perform different analysis types to cater to different outputs.
a. Customized Profiles: The CDP will create a particular audience of individual customers, enabling hyper-personalization and one-to-one marketing of every individual customer. For every customer, the lifetime value and the propensity to consume is captured, allowing the marketers to deeply understand customers and provide personalized offers and recommendations. Another aspect of customized profiles is that the data is synthesized into traits and audiences for each customer and account, which can be segmented and targeted differently.
b. Audience Segments: It is crucial to segment the audience and identify high-value customers most likely to respond to the brand. The most receptive segments most likely will generate higher customer lifetime value in the long run. For example, A CDP would react in real-time to interested prospects by understanding the relevant intent signals on a website, like when a particular audience segment views specific pages and engages with content. The CDP would then use personality traits and audience behavior to understand the buying propensity at the account-level.
3. Execution:
Once a customized profile is identified, the CDP can then initiate several workflows that can be created:
a. Real-time CRM Update: Update the account record in real-time in the CRM and other marketing tools with each interaction so that the sales team can review it before a call. Each time a new account qualifies, the audience is updated.
b. Campaign automation: The CDP will feed the data to several tools in the CRM stack to orchestrate personalized, real-time outbound messaging such as personalized e-mails, discounts, SMS messaging, product recommendations.
c. Website/Mobile App Personalization: The customer will be able to have a personalized experience every time the customer visits the website or mobile app, thus enabling a targeted connect.
Benefits:
1. Target Relevant Audience: A personalized profile and segmentation provides businesses the ability to tailor communications, which enhances engagement, experience, and ultimately improve sales
2. Enhance Response Rates: Communicating with the right customer at the right time initiates a nurturing process to lead the potential prospects through the buying process. This helps boost response rates.
3. Improve Market Penetration: Targeted customer offerings always have a higher propensity to be interested in the brand or product. When a customer profile is analyzed well, we can derive insights such as the percentage of the target market and the market penetration level.
We are all aware that customer acquisition costs are very high. It is five times cheaper to retain a customer than to acquire a new one[ii]. Hence, CDP plays a massive role in identifying and targeting the right customers. The more one knows about a customer, the better chances at personalizing the messages — especially when surveys indicate that 80% of buyers are more likely to buy from a company that offers personalized experiences[iii].
REFERENCES:
[i] https://martechtoday.com/searching-holy-grail-marketing-can-stop-universal-customer-profile-134111
[ii] https://www.forbes.com/sites/jiawertz/2018/09/12/dont-spend-5-times-more-attracting-new-customers-nurture-the-existing-ones/?sh=34555ec55a8e
[iii] https://us.epsilon.com/pressroom/new-epsilon-research-indicates-80-of-consumers-are-more-likely-to-make-a-purchase-when-brands-offer-personalized-experiences
