May 20, 2021 | 4 min read

Why Customer Data Unification is Essential for Personalization

Consumers today expect a high degree of personalization in their interactions with brands. Learn why customer data unification is essential today in our blog post.

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Personalization drives growth. Consumers today expect a high degree of personalization in their interactions with brands. And these expectations are on the rise due to positive experiences with Amazon, Uber, Airbnb, and other internet-first brands. Personalization is great for business too, of course. A Boston Consulting Group study found that brands that create personalized experiences are seeing revenue increases of 6% to 10%, and McKinsey reported that “targeted communications that are relevant and useful can create lasting customer loyalty and drive revenue growth of 10 to 30 percent.”

In this quest for personalization, marketers are faced with a dizzying array of marketing technology choices. And while there is a wide selection of tools available for improving customer interactions, there is an essential prerequisite to personalization — one underlying asset can act as a force multiplier across all personalization efforts — unified customer data.

Internet-first brands have an inherent advantage in this area and have used this advantage to drive personalized experiences and steal share. So, what can omni-channel brands do to catch up? Let’s look at what it means to unify customer data and why personalization success depends on it.

“We saw results literally overnight with double-digit increases in ROAS, click-through rate, and loyalty conversion rate.”

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How Unified Customer Data Supercharges Personalization

While most omnichannel brands possess the customer data that they need to power personalized experiences, this data is fragmented, out of reach, and impossible to activate. These data limitations mean that marketers often have a limited understanding of their customers, which holds them back from building experiences that drive top-line revenue. Here’s why customer data unification is a prerequisite for effective personalization:

Discern Unique Customers: It’s important for marketers to identify as many unique customers as possible in their customer data, from within all their disparate data sources. This requires deduplicating customer data within each data source, and unifying records across sources. Doing this creates the biggest possible addressable customer audience for marketers to scale their personalization efforts.

Customer data unification can help marketers identify loyal customers that might otherwise be showing up as multiple first-time buyers. Also, by connecting relevant data, marketers are able to increase the size of segments that they’ve identified as being of interest. This directly translates to more customers enjoying targeted experiences, which should lead to an increase in conversion rates and the resulting revenue.

Build Complete Customer Profiles: To create impactful experiences that convert, marketers need to connect all the pieces of information that they have on their customers. The end result of this effort should be rich, consistent, and actionable customer profiles. This means identifying and connecting the following types of customer data at the individual level:

  • Transactional: Information about customers’ purchasing habits

  • Clickstream: This data is about the path that a visitor takes through a website

  • Location: This is about knowing the locations that a customer favors

  • Social: Information about what and how customers act and share on social networks

  • PII: Email address, home address, first name, last name, former last names, phone number, birthdate, and other information that belongs exclusively to a particular individual

  • Contact preferences: Preferred channels, interaction frequency, offer types, and more

  • Derived fields: These include predicted Customer Lifetime Value, promotional sensitivity, and segments unique to the brand.

By connecting the different dimensions of customer data detailed above, marketers are able to form a richer understanding of their customers. This can help them identify new areas of opportunity not just in retention and upsell, but also for better lookalike modeling to improve new customer acquisition effectiveness and efficiency.

Keep Pace with Customer Needs: An important last consideration is that marketers need to stay abreast of changes in customer data. This is so that they can react to and, in some cases, even proactively predict customer needs and wants. For this reason, it’s important that customer data unification is ongoing as opposed to a batch process.

Given the opportunities and consumer expectations, you might wonder why more brands aren’t doing all they can to unify their customer data. The challenges around customer data unification have persisted because traditional approaches to the problem are inadequate.

A Better Way to Unify Customer Data

Traditional mechanisms of customer data unification let marketers down because they are hard to build, maintain, and scale. They are also not marketer-facing. These data limitations mean that marketers often have a limited understanding of their customers, which holds them back from building customer experiences that deepen the customer relationship and help drive top-line revenue. This problem is exacerbated by the fact that the sheer volume of marketing data being generated is exploding because of better instrumentation, improved technology infrastructure, and a desire to know and shape customer journeys.

An intelligent Customer Data Platform provides marketers with high quality reach, faster time to value, and unparalleled flexibility in driving top line growth.

To learn more about unifying your customer data, get in touch.