Data is one of the most valuable assets to a company. It provides insight into what people are buying, how much they are spending, and most importantly, who they are. But getting a clear view into this data is often a challenge. Only so much can be pulled out of each island of data you have. Your Point of Sale system will show you what is being purchased and how much you are earning while your email sign up will tell you who is interested in your company. But how do you know if those email subscribers ever turn out to be customers? A Customer Data Platform (CDP) can help you gain valuable knowledge from your data. By combining all data sources into the CDP, analytics can then be run to provide key statistics such as Lifetime Customer Value, Customer vs Prospect ratio and RFM Score. From there, segments can be built to execute more effective marketing campaigns.
Thinking through how exactly to use this data and how best to gain value from it can be difficult. The best way to look at how valuable this type of information can be, is to look more closely into a use case. Below we will walk through a customer journey to better understand the benefits of a Customer Data Platform.
CDP Use Case: Post-Purchase Customer Stream
For this use case example, you are the owner of a jewelry chain who has recently purchased software to better track and understand your customers and transactions, also known as a Customer Data Platform. Yesterday, at one of your stores, a customer purchased a necklace. After looking through many options, he decided on a $200 necklace. At that amount, it isn’t a transaction you would typically look further into. However, because his purchase comes through your Point of Sale system and into your CDP software, you are alerted that while this purchase was only $200, his lifetime value at this store location is $12,150. He is immediately tagged as a high value customer and goes into a high value customer marketing stream you have easily developed.
This automated email is sent to high value customers the following day, thanking them for their recent purchase. The email is also dynamically populated with the store managers signature. It is not a sales email, simply a loyalty message thanking the customer for their purchase.
Looking through the customer journey, you decide you want to see how many days between the initial purchase it takes before a repeat purchase is made. In the case of your jewelry chain, you see that the typical repeat purchase is about 90 days after the initial purchase. You present this information to your marketing team who then decides to implement a post-purchase and cross-sell marketing campaign to go out 85 days after a purchase. The customer bought a necklace? Great, promote the matching earring set in your post-purchase email!
Since you have set up the automated email it will check the data each day to see who is a high value customer that purchased the prior day, send out the personalized thank you email, and then the 85-day post purchase email. After implementing this campaign, you look through your CDP analytics and realize that while mainly very successful, there are still some customers that are not opening or clicking the email you are sending them. You realize that some customers need a different journey outside of email. Recognizing these people are important, you decide to create a segment of people that will receive a direct mail piece if they have not opened the email within a week of being sent. Your CDP software will check this segment to see they have come back to your store after receiving this direct mail piece.
Importantly, your CDP software can attribute revenue to the marketing campaign from the email and direct mail campaigns because the system is pulling in all of the point of sale data. Overall, you see a high marketing ROI from this post-purchase stream as well as high customer retention.
CDP: The Benefits of Customer Data
Without CDP software, this type of analysis and execution would likely not be possible. Combining your data into a single customer database can allow you to gain valuable insight into your customer data and execute highly targeted marketing strategies to customers and prospects leading to increased revenue. All companies have data, but it what you do with it that makes the difference and can set you apart from your competition. Because after all, data is just data until you do something with it.