In this digital world we are living in, customers expect a lot from businesses. If you are in the B2C business, customers expect great buying as well as after-sales experiences. 20 years ago, this was not the case.
As more and more companies became customer-centric, it’s set a benchmark for all the other companies to follow suit or perish. For example, when we order a product from an e-commerce store, we expect a confirmation mail immediately. Then we expect the shipping details to be shared with us. We need the ability to track the order. We need to be notified of the day when the order will be delivered to our home. Finally, we expect some discount coupons for loyal customers. Some businesses have become very good at providing these services to their customers. If an e-commerce company is unable to provide these services, it should already shut the shop and close the business.
To add to the complexity, customers today are using different devices to connect with brands. They may place an order on desktop machines, make the payment through a mobile app, and track the order on their tab. Customers shift devices frequently, but expect the transition from one device to another to happen smoothly and without hiccups.
A lot of literature on CDP focuses more on marketing. But the role CDP has to play goes beyond marketing. Yes, of course, with CDP, you can create more personalized campaigns with a better ROI on your marketing spending. But CDPs can be used for larger strategic initiatives such as increasing user engagement, increasing monetization, decreasing user churn, and so on.
Figure 2.3: Survey results on top challenges to customer experience delivery (Source: https://www.marketingcharts.com/customer-centric/customer-experience-115587)
Based on a survey conducted by Gartner, among the top challenges to customer experience delivery are issues related to collecting, managing, and storing customer data. It is only second to the lack of an appropriate customer experience strategy.
Collecting and storing customer data is a difficult task that prevents companies from creating a single source of truth, due to which they face the following challenges:
- Fragmented customer data: If there are challenges to collecting and unifying customer data, then companies have fragmented customer data in different systems. The data is useless and cannot be used for decision-making or any other business initiatives. It defeats the purpose of collecting the data in the first place.
- Ineffective marketing: Lack of proper data results in ineffective marketing efforts. Companies may send a discount voucher to a customer who is not happy with the service instead of solving the customer’s problem first. Or they will send the same marketing artifact to that customer who has already bought the product. The lack of a single source of truth reduces marketing effectiveness.
- Inconsistent experience for customers: Lack of a unified customer profile across different platforms means that customers will not have a consistent experience across different channels or mediums. This will increase customer churn.
- Incorrect metrics: Due to the lack of a single source of truth, the data becomes unreliable. So, calculating business metrics using unreliable data can provide incorrect business metrics. Decision-making is affected as often there will be conflicts regarding the veracity of the data.
- Adhering to data protection and privacy laws: Without proper storage and collection of data, adhering to strict data protection and privacy laws becomes a challenge for organizations.