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2021: Customer Data is Gold
100% of your 2021 "Digital Marketing Transformation" should focus on curating your customer data. Full stop.
And so begins the time of year when we see, read, and hear that 2021 will be the year of [insert digital buzzword here]. So I hate to be that guy, but it is now or never.
Curation of your customer data should be the thing that keeps your entire marketing organization up at night.
Sometime last quarter, your team probably got together over a Zoom call and worked through your 2021 strategy including your “learning agendas” for the upcoming year. I hope that every one of those agendas focused squarely on your first-party data asset (or lack thereof).
Every little crumb of customer data that you own is the jet fuel that is going to power all of your marketing activity going forward.
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Where are we now?
Very few brands are really nailing the management of their first-party data and customer PII right now. Many, but nowhere near enough, are trying. A 2019 Oracle study showed that only 11% of brands effectively use customer data. I’d be willing to bet that we have not improved much in the last year.
Marketers and companies are generally “buyers of tools” and point solutions rather than strategic asset builders and developers. The bigger the company is, the more true this becomes.
If you were writing a formula to describe the fracture and disjointed nature of the challenge inside most brands, it would look something like this:
Data Mess = Number of customer touchpoints X Number of installed marketer platforms containing PII X Number of markets
Side Story: The local shop
Large brands (and even small companies) do not realize that they are squandering one of their most important assets: customer information.
Whether you are a B2B, BTC, or DTC brand, you are probably collecting some level of customer data in your day to day operations. You’ve got a little newsletter sign up over here. Some customer level transaction data over there. Your customer service or support ticket data sitting somewhere else. And oh yeah, last summer you ran sweepstakes…the list of entrants is sitting in an Excel file somewhere on Mary’s laptop.
Here’s the power of what I’m talking about, on a smaller scale.
There are a number of small businesses and restaurants in the town where I live. There are a couple of nice bakeries, some local food markets, and even some fishmongers and butchers. I can tell you from experience that none of them had (or have) their act together when it comes to a digital presence or online ordering. During the pandemic, all of these businesses had to adapt, yet none of them took full advantage.
Just in the last 6 months, we have ordered things like an entire Thanksgiving spread. We have a new baby and were in no position to cook this year. We’ve also ordered steaks from our local butcher, some shrimp and oysters from the fish place, and a lovely cake from the bakery.
Thankfully, most of them look like they will survive, particularly because people started ordering local at 10x the rate they had in the past. However, without exception, not a single one of them has attempted to contact me in any way, shape, or form after picking up an order. Yet at the same time, they have everything they could possibly need to get started.
Across the board, these small businesses still require you to pick up the phone and call in your order with a credit card. Ok fine. Was I hoping that they might deploy some level of online ordering capability? Kinda, but I’m not going to hold that against them. The important part is that the phone call yields “data gold.”
Mobile phone number
Credit card number
And a couple asked for my email address (but never sent me anything)
Unfortunately, my information is sitting on a physical paper order form somewhere and will collect dust until it hits the waste bin (hopefully via a paper shredder).
For around $10/month, these companies could invest in a simple email CRM, and load all their past “holiday catering” customers into the platform. In a few weeks, when Valentine’s Day rolls around, they could message their known customers with the menu.
Today, they just hope I think of them next holiday season…or at all.
They could just as easily take that list and pop it into Facebook and target other “people like me” in a 10-mile radius of the store.
Take that little catering business story and multiply it by about 5,000 and you have today’s biggest brands. Piles and piles of customer data of all shapes and sizes tucked away in corners of the business.
You and I probably “exist” in at least a dozen different forms inside the systems of the market’s biggest CPG, automotive, or beverage companies. Some of that data may be used in various ad hoc ways depending on the team that owns the database.
Unfortunately, there are often email/CRM teams that operate completely independently of the rest of digital, TV, and OOH…and vice versa.
This data must be unified. This year.
Why the urgency?
Both Apple and Google have set their sights on eliminating third-party tracking techniques. Google announced that Chrome (the #1 web browser on the planet) will block third-party cookies in 2022. Apple has said that iOS 14 will deploy numerous techniques to deter third-party tracking and targeting in apps, on top of the deployment of ITP in Safari.
This means that whatever janky first-party data brands have been using to date will be rendered largely unusable. It also has scary implications for attribution measurement, conversion analysis and more.
Going forward, brands that have the PII data on their customers, and the express permission to use it, will be able to deploy that data within publishing platforms that also have matching users. Basically, all your walled gardens like Facebook, Google, YouTube, Spotify, Twitter, Pinterest, TikTok, etc.
If you do not have ownership of this customer data, your world is going to get rocked. Your brand’s ability to target and segment audiences or customers will rely solely on the original data of other firms. More importantly, the best data on the planet for your brand is your data. You just need to bring it all together and make it usable.
Did someone say CDP?
Might this be a new acronym in your vocabulary? Probably not, but I’ll bet you can’t describe what it does in 10 words or less. Spoiler: Neither can I.
A CDP is a Customer Data Platform.
A customer data platform is a collection of software which creates a persistent, unified customer database that is accessible to other systems. Source: Wikipedia
In short, it takes all the records of each customer engagement from all the disparate places where your company squirrels the data away and joins it together. Each customer is assigned a unique and persistent customer ID to which all of the other records are joined or appended.
For example: Mary Jane Smith, Mary J Smith, MJSmith, and Mary Smith are all unique customer records in your various systems today. A proper CDP will automatically detect that this is in fact one “Mary” and join them all together. It might find a common email address, phone number or physical address (as examples) behind those records that allow them to be consolidated into one.
The original record tied to Mary Jane Smith came from your loyalty club.
The original MJSmith turned out to be from your CRM. Turns out she opens a decent amount of your emails.
The original Mary J Smith came from a Facebook Lead ad two years ago.
What is super cool, and often overlooked in the CDP evaluation process is the ability to retroactively convert “unknown” records to “known” customers. A good CDP will help you take otherwise anonymous records and attach them to the correct customer once that customer becomes known by name.
It is at about this point that we will start to hear the drum beats and war cries from the CRM’s and DMP’s. I want to say right up front that I am very “PRO” DMP, CRM, and CDP. However, all three are not always required, and the nearer term challenge fits squarely in CDP land.
There is an impressive resource on CDP’s that you should check out over at the CDP Institute. Yup, it is real. Yup, it is super nerdy. However, they have a robust resource page with dozens of downloadable guides. Full disclosure: this is an organization that is made up of CDP vendors. However, the content is valuable.
What should we do next?
Do an internal audit. What platforms do we currently use that have any sort of customer data in them? Be sure to include things like customer service and support “ticketing” systems too.
Understand where you leverage customer data today. Is the data just sitting on the shelf or is it being used to create a meaningful customer experience?
Develop potential, real-world use cases. What could (or should) we do if we had all of our customer data in one place that was easy to deploy across our entire customer experience?
Determine what is missing. Do you need a CDP or will an upgrade to an enterprise CRM do the trick? Do we have many, complex use cases for customer data or just a couple?
To be continued…
In other news
💸 Sir Martin is on an early acquisition streak picking up Metric Theory and Decoded. If you’re working at either firm and survive the typical post-acquisition redundancy check, you’ll find that you are in good company with the others in the portfolio.
✏️ Airbnb Quality Data…for you? Feel like a data geek session?
📐 How about a handy little cheat sheet for all the social media 2021 creative sizes and specs? That’s handy.
🤷🏻 Roku is going to buy up Quibi’s “shows.”
💸 The FBI’s favorite little bot fraud hunting buddies (WhiteOps) got bought by Goldman Sachs.
🌎 Discovery+ is live! Binge Chip and Joanna Gaines and 90 Day Fiancé until your eyes bleed.
🔍 Search was bananas in 2020.
👀 Some Googlers unionize. Is it the first of many dominoes to fall?