I have been a part of many digital transformation initiatives, and they all have several common objectives around driving growth, improving customer experiences, becoming data-driven, and evolving the business model. And because customer data is at the center of all the transformation programs, implementing a Customer Data Platform or CDP should be a primary investment in many industries, including retail, consumer package goods (CPG), financial services, automotive, entertainment, media, and life sciences.
These industries have several common needs, including keeping loyal customers, innovating new products, personalizing customer experiences, addressing privacy regulations, and reducing security risks. Leading organizations recognize how new technologies such as AI, AR/VR, IoT, automations, and integrations are opportunities and disruptive threats, and their digital transformations must optimize how they will evolve their business models.
How Successful Digital Transformation Impact Organizations
Transformation leaders often start with an understanding of changing market conditions, evolving customer needs, and the impacts of new competitors. These drivers frequently lead organizations to invest in building new digitally-enabled products and improving customer experiences.
Successful digital transformations grow revenue and shift the business model to these modernized business capabilities, but leaders must drive significant changes to the operating model to succeed. For example, the marketing team needs to reach new customer segments and efficiently convert new leads to prioritized prospects. Inside sales teams and direct-to-customer digital channels must offer personalized experiences, while sales teams on bigger ticket items must build meaningful relationships with the buyers and influencers.
Digital transformations impact front-office operations significantly, and the net is that back-office functions must keep up with the speed and intelligence required to compete. For example, technology organizations must improve the frequency of delivering innovations and improving employee experiences. Of course, customer support teams must have a full 360-degree view of the customer to provide excellent and efficient services. And as products become hyper-personalized, financial analysts must make faster strategic decisions and need better tools to understand profitability, opportunities, and risks.
Customer Data Management is Central to Digital Transformations
The common denominator for these transformations is data, specifically customer data, whether in the CRM, e-commerce systems, mobile applications, content management systems, point of sale systems, or data from social networks. Employees typically have access to only one or two systems with customer information, so one primary importance of customer data platform technologies is integrating data into a central repository.
Once integrated, the data can be normalized and enriched, forming a comprehensive, centralized master data source that sales, marketing, and customer service employees can use in their daily work.
But CDPs are not just there to support employee workflows. Machine learning models can use this data to deliver content recommendations, predict buying behaviors, identify customers likely to churn, and rank prospects. CDPs are also integrated into campaign management platforms, CRM workflows, and web platforms to deliver personalized experiences.
CDPs go beyond a centralized data warehouse and deliver a lot more value than just reporting. Leading organizations use CDPs as the source for customer analytics, but they use the platform’s tools to normalize and enrich customer data and turn them into repurposable profiles. And beyond storing and analyzing customer data, CDPs help organizations increase ad click-through rates, centralize customer information across franchise properties, optimize loyalty programs, and track customer behavior patterns.
In other words, CDPs are central to running a modernized, integrated, smart, and fast digital business.
Aligning the Organization on the CDP Opportunity
Few platforms truly connect all aspects of business operations. ERPs, HR systems, and enterprise CRMs are good examples, and they are all challenging to select, implement, and maintain these platforms.
While CDPs are a central hub for customer information, workflows, and analytics, they can be enabled incrementally and enhanced over time. For example, a retail company may start using CDPs to optimize campaigns on common platforms, then follow this up with using the CDP to enrich the e-commerce platform’s recommendation engine. A bank may start creating customer profiles in wealth management and then expand to other banking areas, including payments, loans, and credit cards.
Similarly, integrating, cleansing, and enriching customer data can be prioritized through a roadmap that delivers incremental business value. It’s best to start with the most essential data sources, cleanse them for accuracy, and then look to enrich with secondary sources.
Successful digital transformation initiatives start with articulating a business vision, driving a planning process based on market and customer needs, and engaging business stakeholders early in the journey. From there, organizations should adopt agile methods to research customer opportunities, discover key business requirements, identify primary data sources, and drive an intelligent CDP vendor selection.
If a CDP isn’t on your digital transformation roadmap, well then, chances are your competitors are a couple of steps ahead of you. But don’t fall too far behind because it’s the organizations that fail to start that get caught in the trailing dust of digital disruption.