When companies with the size and stature of Aetna, Amazon, Nationwide Insurance, Microsoft, and Unilever commit to maintaining a hybrid work model well beyond COVID-19—when home working is encouraged—then businesses must prepare for a seismic shift in not just how, when and where we work – but what that means for how, when and where, customers spend.
The true benefits of digital are all about scaling your business with an efficiency that keeps you ahead of your customers’ needs. Needing to understand where and when your customers are working and what tips them into “consumer mode” in this emerging work-from-anywhere economy adds new complexity to customer journeys, shining a bright light on the increased need for customer data platforms.
Exhibit 1: Only 37% will return to the office-based work-style
Source: HFS Research 2020; Sample: 400 executives across global 2000 enterprises
What exactly is a customer data platform?
If your business relies on satisfying customers, it needs data to remain competitive. You have to pull information from your internal operations and you need to embrace external data sources more than ever to anticipate your customers’ demands and changing needs. Net-net, you need to be smarter than ever to anticipate where and when potential customers will spend—often before they know it themselves. A customer data platform (CDP) helps you manage these data essentials, which you must get right to survive the emerging work-from-anywhere economy.
As 2021 rolls out and the immediate dangers of the pandemic begin to recede, we will increasingly work, buy, and consume—from anywhere. Our touchpoints and choices on every customer journey will increase. As the purchasing contexts become more complex, it becomes ever harder for businesses to construct a 360-degree view of individual consumer’s needs and understand their experience journeys.
The emerging need to pull together this increasingly fragmented data across an ever-widening range of channels is one that CDPs are designed to serve.
Billions are pouring into CDPs to meet this growing strategic data need
Blueshift, an artificial intelligence-enhanced example of a CDP, announced Series C funding of $30 million at the end of February 2021. It will use the money to expand its technology and scale into new markets beyond the US and Europe. The San Francisco-based start-up counts The Discovery Channel, Groupon, and LendingTree among its customers.
With $65 million of funding to date, Blueshift’s SmartHub platform adds to the data fidelity of a CDP with predictive intelligence designed to maximize outcomes through the application of AI. The SmartHub’s goal is to engage customers with the most appropriate person or deliver the best content to them at the ideal time and through the best channel.
Its funding follows the major acquisition, which closed in November 2020, of market-leading CDP Segment by cloud platform-as-a-service provider Twilio. The deal was valued at $3.2 billion. Also in 2020, SAP acquired Treasure Data and Microsoft’s CDP, Dynamics 365 Customer Insights, and invested in a range of new capabilities to deliver deeper insight across channels and integrate with Azure Synapse Analytics.
Oracle announced updates to its CDP with a universal digital tag to enable more accurate real-time tagging of customer data across channels.
Separately, mParticle bagged additional Series D investment of $45 million.
CDPs meet three urgent needs for marketers—it’s a tech whose time has come
Customer data platforms emerged as a technology built on single-customer-view databases, drawing from web analytics and knowledge and content management tagging platforms. Enterprises use CDPs to target customers with digital ad campaigns, personalized offers, and subsequent best actions.
As customers’ channel choices proliferate (in line with both the surge to online and our work-from-anywhere options), customer data grows more complex. As HFS published in its PoV Marketers need customer data platforms to accelerate to OneOffice success, CDPs are a technology whose time has come:
[They] meet three urgent needs for marketers to champion a OneOffice mindset. The cloud-based platforms can handle the pandemic-accelerated trend to work from anywhere. They feed customer acquisition platforms accurate and real-time data, and they anticipate customers’ needs and behaviors.
In a time of rapidly changing customer behavior, the length of the lag in an enterprise’s response to change is the difference between growth and decline in 2021. In addition to improvements in data speed, the ever-improving capabilities in predictive analytics and AI empower ambitious businesses to anticipate their customers’ needs and behaviors before their customers are even aware of them.
Alongside the current and real urgency—wise marketers (initially in B2C, but increasingly in B2B) have seen them as an intelligent application of digital technology to restore the customer relationships that mass production and mass media broke. They hold the key to enabling OneOffice organizations to know who they serve. When your customer is no longer walking through your door, that digital knowledge is more business-critical than ever.
HFS sees an increasing role for CDPs in the data strategies of every organization (see Exhibit 2).
Exhibit 2: Customer data platforms have a strategic role to play where data is your strategy
The OneOfficeTM starts and ends with data…your strategy is to refine it.
Source: HFS Research 2021
Partners can help cut through “the fog of CDP” to connect data for success
Increasingly complex customer experience (CX) tech and martech stacks combined with an explosion of data from digital interactions create the need for most enterprises to find external partners to help cultivate the customer roadmap and use CDP data to develop their strategy. They need assistance with what marketers have described as “the fog of CDP”—both in terms of cutting through hype and software-sponsored content and mapping out how to connect systems and use the data.
This type of work is shifting away from creative agencies and into the realm of digital consultancies, compelling many business process outsourcing (BPO) service providers to acquire these firms and gain influence with Chief Marketing Officers and develop capabilities around experience services (see Tech Mahindra’s BORN and Genpact’s Rightpoint, for example).
Marketing leaders need to step up to bust open internal silos
In addition to finding the right partners to assist on the path toward OneOffice success with CDPs, you also need marketing leadership that wants to sell internally and get stakeholders across the organization to see what’s in it for them. The way forward for customer-centric enterprises should be to develop a common taxonomy, standardize processes, connect plans and budgets, and integrate their martech stack.
For example, the contact center is a treasure trove of ignored data that all too often exists in a silo, completely independent of CDP and marketing data. There’s a huge opportunity for customer service and marketing to get on the same page to align initiatives and use that currently wasted data to inform a holistic strategy across the customer lifecycle. Until they do, the “omnichannel” or “golden record” version of the truth that CDP’s promise will never be truly fulfilled.
The Bottom Line: No self-respecting customer-centric organization should miss out on the CDP boom’s data advantage.
Our emerging work-from-anywhere economy further expands the range of data touchpoints and the complexity of achieving a 360-degree view of the customer. In this new reality, it becomes even more important for companies to collate and organize the data they have as efficiently as possible. Customer data platforms have a decisive and strategic role in refining business-critical data—one that no self-respecting customer-centric organization can afford to be without.