After two years of major pivots and accelerated digital transformations, brands are taking a close look at the way they handle customer data.
There's no question that the insights companies draw from that data are valuable. "Insights-driven firms will be three times more likely to outperform their competitors" in 2022, Forrester Analytics forecasts.
However, to get those insights and deliver more accurate personalization, data needs to be easier for companies to access, and the process for sharing it needs to be easier for customers to access and understand.
There are three main challenges organizations must meet to make those improvements.
Unifying and Organizing Customer Data
The biggest challenge brands are experiencing is how to unify the massive amounts of customer data that they collect across all channels and touchpoints. Right now, that data ends up in silos, where it's difficult or impossible to use effectively.
For example, only 38% of marketers say they have the customer segment and persona data they need in the right format to make good marketing decisions, the Capgemini Research Institute CMO survey in March and April 2021 found. Without proper access and format, personalization is inhibited or off the mark.
Creating Transparent Data Permission and Control Experiences
The second challenge is how to improve the way customers are asked to grant data permissions and the experience they have adjusting those permissions. Brands need to review their end-to-end data collection experience to see where it can be improved.
Often, privacy and data use terms are intentionally obscured by, for example, long and hard-to-understand Terms of Service text that customers have to check off on. Or, as another example, the cookie consent popups that appear on virtually every website now often have tiny text, so consumers don't really know what they're consenting to, or they have a hard time finding the opt-out choices.
Those are poor customer experiences, both from a communication—and trust—standpoint and from an efficiency standpoint. Imagine customers' response if they walked into a store and were blocked by security asking for identity documents before they could shop, requiring them to sign an agreement they didn't understand.
Preparing for Customer Data Information Requests
Companies need to expect customer questions about data collection. As a result of regular news stories about corporate data breaches to documentaries about how social media uses data, public awareness is increasing around how personal data is collected, stored, protected, and used.
Based on that trend, I anticipate an increase in data subject access requests—customer inquiries provided for by law, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Responding to those requests may be a challenge for enterprises, so the time to plan is now.
Best-Practices for Balancing Data Collection, Privacy, and CX
Once those three steps are implemented, companies have various ways they can use their more unified data to improve the customer experience.
Empower your customers
Give them control over what data they share and how you engage with them. One option is a self-service portal where they can set preferences for data sharing and contact channels for shipping notifications and promotions.
Show customers what you know about them
When customers come to your website, can they see information you already have, such as their purchase history and previously viewed items? What about their contact preferences?
Reminding the customer of what data you have and why you have it helps to build trust.
Make it easier for your customers to do business with you
Make your messages relevant
Send your customers only communications that align with their shopping history, buying patterns, and the preferences that they've indicated. For example, if a customer wants to get promos only about a certain topic via text, stick to that.
Be transparent about data collection
Clearly state to customers what you're collecting, why you're collecting it, how you're going to store it and use it, and how the consumer can change the data they share with your brand.
Using Customer Data for Internal Improvements
Unified, permissioned data allows organizations to use their customer insights internally. That typically requires some adjustments to make sure the data is being used for maximum impact.
Companies can use their data to put the customer at the center of their processes more easily. Connecting the front office with the back office solves that challenge, yet the gap between the two is one of the biggest data issues—both from a technology and an organizational management standpoint. Closing the gap requires the right technology and executive leadership from the CXO—i.e., to own CX across the enterprise.
Customer data can empower frontline employees to create a good employee experience that can lead to an incredible customer experience. When employees across the company can see and use the information that the organization has collected about its customers, they can talk to the customers on their terms, in the right context. That requires using the right technologies to enhance those data-supported customer interactions.
For example, rather than sending customers to a chatbot, companies can use artificial intelligence and machine-learning to prompt the right recommendations as the real-time customer service conversation happens. That enhanced employee experience can drive upsells, cross-sells, and customer loyalty—which may be one reason that 93% of data-driven marketers say they're satisfied with the efficacy of real-time marketing.
Identifying the Technology for Optimal Data Management and Use
Implementing data best-practices requires three key pieces of technology.
First, a centralized identity and access management system authenticates customers as they come through the virtual shop doors, so you ensure that you're doing business with the people they appear to be. Centralized authentication supports personalization through progressive profiling while simultaneously protecting customers from account takeover fraud.
Next, organizations need centralized consent management for consistent implementation of customer preferences and protection against GDPR violations and other compliance issues.
The third resource that organizations need is a customer data platform where all customer data is centralized to create unified customer profiles from all of the touch points and interactions across their journey.
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From unifying data to optimizing the customer data-sharing experience and improving internal operations, brands have their work cut out for them. The effort that they put into upgrading the way they collect and use customer data now can deliver better employee and customer experiences over the long-term.
More Resources on Customer Data
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