Customer data and engagement strategies have evolved dramatically in the last few years and will continue to accelerate in 2018. According to Martech Advisor, the customer data platform industry is expected to grow at least 50% per year in the near future, reaching over $1 billion total revenue by 2019. Before your 2018 budget is allocated, check out our predictions for the five biggest difference makers in customer data and engagement.
Single View Technology
Many brands are struggling to meet customer expectations for brands to know who they are and anticipate their needs. The challenge for brands is that technology is evolving so quickly and changing how consumers are capable of engaging with a brand as well as their perception of a brand’s ability to engage with them. With far more channels to service than ever before, brands have to manage a complex environment with high potential for error.
Many brands are dealing with slow and static environments and historical, static views of the customer, slow data moving in batch between systems, manual list-based segmentation, and scheduled campaigns. With the right technology, brands can move to an environment where their view of who the customer is and what that customer is doing across different channels is updated in milliseconds by streaming data from all source systems into one operational profile in real time, so that when customers act you can react not only with marketing campaigns, but also with opportunities to drive the customers towards particular goals you might have around customer experience, as well as triggering off of behaviors.
Artificial Intelligence & Machine Learning
Artificial intelligence gives marketers the ability to turn an abundance of customer data into valuable insights on behavior to drive effective loyalty and engagement programs that are personalized to each customer.
Leveraging a customer data and engagement platform with AI capabilities enables marketers to tap into key customer metrics such as customer lifetime value, probability to churn, RFM metrics (recency, frequency, and spend), along with propensity scoring to segment audiences. Is a customer likely to churn within the next 14 days? Automatically send her a special discount on her favorite product as an incentive to get her back in the door. With AI, you can start to determine and predict customer behavior and send offers that motivate and impact their future behavior.
Customer purchases can occur at any time, making it difficult to understand which customers will return and how often they will purchase. Machine learning models can predict an individual customer’s number of expected future transactions, likely spend per transaction, and the probability the customer returns. From these predictions, you can estimate customer CLV, or the future value expected for the customer’s relationship with the brand.
Data security was likely already a major consideration for most brands when selecting third-party vendors; however, now more than ever the protection of customer data is of paramount importance. According to The Forrester Wave™: Customer Identity and Access Management, Q2 2017, 71% of global enterprise security technology decision makers rate improving the security of customer-facing apps and services as a high or critical priority.
It’s also critical that brands take the proper measures to ensure that customers trust your brand and feel comfortable sharing personal information with your company. Customers will stop engaging with your brand if they don’t feel confident that you are protecting their data. The obvious ramifications of this potential chain of events highlight how customer loyalty and retention is inextricably tied to data security.
Customers expect to be treated as individuals and have a consistent brand experience regardless of which channel they are interacting with. Every channel needs to be seamlessly integrated to deliver consistent customer experiences and lead each customer through his or her own engaging customer journey. Brands know that customer expectations have changed, but haven’t quite caught up--87% of customers think brands need to put more effort into providing a seamless experience (ZenDesk).
By creating a single view of the customer, brands can ensure that they are not only following the journey across all platforms and channels, but also reacting to it at the points of highest value. Cross-channel and cross-device marketing can be automated and triggered based on customer behaviors, interactions and more.
For example, a customer abandons a cart on her web experience, leaving a roll of paper towels and garbage bags. Instead of sending an email two days later about her abandoned cart, the brand is able to send the her a push notification as she enters the brick-and-mortar location later that day to remind her about the necessities she left behind, saving her an emergency trip out to a competitor’s store.
It’s white-glove, omnichannel treatment.
Loyalty As A Behavior, Not A Tactic
In the past, loyalty programs were centered on customers demonstrating loyalty to businesses; however, customer expectations are forcing marketers to rethink the value exchange to be more about a business demonstrating loyalty to its customers. How do brands do this? They serve up unique experiences, offers and content based on declared, observed and statistical data about each individual customer. In exchange for this devotion, customers reciprocate with greater frequency, bigger baskets and referrals.
The new loyalty paradigm has retired spray and pray, generic discounts in favor of customized offers based on an individual customer’s past purchase history. Leveraging historical data to determine which products a particular customer is most likely to purchase and then incentivizing a customer to buy those products increases reward redemption, generates incremental activity and decreases margin erosion.
For example, if you have a customer who comes to your coffee shop every morning for coffee, you could give that customer a free coffee as a thank you for his or her patronage. This might seem like a nice thank you and while customers might appreciate it, you are likely discounting to customer who are willing to pay full price. Rather, leverage that offer to increase recency, frequency, or spend (or why not all three!). Instead of the free coffee, try an offer for a free bagel tomorrow morning or an iced coffee in the afternoon. Think about the financial benefit you stand to gain by increasing customers spending $2 a day to $3 or $4, even just a couple days a week.
The best loyalty programs do more than just reward transactions; they have the power to influence crucial business metrics like retention, acquisition, spend and more.