Third-party cookies might be going the way of the dinosaur, but organizations will still need data about their customers’ online behaviors to deliver the personalized experiences they expect.

This means a shift in data strategy to focus on multiple types of first-party data, collected with customer consent. First-party data is data that customers agree to share with brands, including their preferences, online behaviors, and personal information. And while first-party data is a rich source of intelligence, it often lives in silos and is unorganized, rendering much of it useless when it comes to helping the organization drive better decisions and actions.

This is where a customer data platform (CDP) shows its value as a “persistent, unified customer database that is accessible to other systems,” according to the Customer Data Platform Institute.

Creating a full customer profile

A CDP is a foundational layer for enterprises that manages and protects customer data, which is the bedrock for customer experiences,” explains Ryan Fleisch, head of product marketing for real-time CDP and audience manager at Adobe. By collecting and normalizing data in real time from a variety of sources—transactional, behavioral, and demographic—a CDP presents a single, focused view of an individual. This focused view assists enterprises in delivering the ideal customer experience to that individual.

Fleisch notes that successful CDPs must excel at these core five abilities:

Ingest data from different sources to create a 360-degree view of a customerUnify data to assembles a cohesive customer profileKeeps data fresh and accessible in real timeEnsure compliance with all regulations and policies, which are frequently shiftingEffectively use the data for customer insights and action

Because CDPs use consented, first-party data, they have quickly become an important solution for managing customer data in a future-proof way. During the last 18 months or so, as data deprecation has accelerated, companies have recognized an urgent need to get smarter and more responsible with customer data.

Respecting customer data is a big deal

Consumers are tired of companies that use and abuse their personal information, without permission and for profit. In response, data regulations have been created to give consumers more transparency, choice, and control over how, where, and when their data is used. Regulations such as the EU’s General Data Protection Regulation and the California Consumer Privacy Act, have changed the way data can be collected and the appropriate customer consent required to collect that data.

Integrated data governance capabilities, provided by CDPs, allow companies to properly and consistently apply both regulatory rules and customer preferences across every customer interaction. “You need to make sure you have a strategy that actually builds trust with your customers and serve that as a foundation for every other experience and touchpoint to follow,” says Fleisch.

Finding value in customer data

Because CDPs are built on consent-based data that customers willingly share with brands, the data is inherently higher quality, giving companies valuable insights into their customers. Historically, companies relied heavily on third-party cookies, but these cookies only provided crumbs when it came to holistic understanding of a customer. CDPs offer a deeper view of a customer based on first-party data, which is something organizations will need as third-party cookies cease to be supported by browsers. Safari and Firefox, for example, have restricted third-party cookies for years. And, Google, whose search engine Chrome claims 63% of the global browser market, is (slowly) working out a plan to kill cookies.

Integration is one of the key reasons that CDPs offer a deeper view of a customer than cookies. CDPs can integrate with other technologies and data sources, connecting and activating—in real time—both online and offline data sitting in silos across an organization. CDPs can be thought of as the brain that powers all customer experience tools, the glue between marketing and other systems. “When you think about providing a connected experience for a customer, you don’t want to have a web of completely disparate systems,” says Fleisch.

In fact, what you want is one centralized brain to manage data

Read More

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By: MIT Technology Review Insights
Title: The right data strategy is the foundation for better customer experiences
Sourced From: www.technologyreview.com/2022/06/06/1052856/the-right-data-strategy-is-the-foundation-for-better-customer-experiences/
Published Date: Mon, 06 Jun 2022 14:14:52 +0000

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