Monetizing Data From the Digital Customer Journey
Today’s consumers interact with brands in a digitally fragmented omnichannel world. The pervasiveness of smartphones and tablets, for example, means these vital customer interactions occur anywhere and anytime — and data from the digital customer journey often are not collected in a consistent or uniform way. Monetizing data from that fragmented digital customer journey is essential to identifying new revenue streams.
Within this splintered world, innovative mobile, social and artificial intelligence systems empower brands to deliver always-on touch points that improve the customer journey. Brands now capture each customer engagement with sophisticated, but disparate, customer segmentation technologies that measure data in real time and provide a detailed mosaic of his or her lifestyle.
Since data is now the new currency, businesses that invest wisely in consolidating their fragmented customer data will gain a competitive advantage. Data management platforms (DMP) have emerged as tools for centralizing customer data and enabling businesses to monetize the information now buried in their databases.
These tools are purposely built for analytics-driven decision-making, to drive more effective marketing. Specifically, DMPs enable customer segmentation (the ability to identify customer groups), campaign management (customer targeting), an optimized marketing mix, and insights about offline marketing (advertising). These precise customer profiles are used in precision marketing to deliver highly relevant, timely, and personalized advertising and marketing messages across channels, delivered when the customer is most likely to engage or convert.
Customer Data Is Ubiquitous and Comes in Many Forms
Most businesses know they have tremendous amounts of customer data, but in addition to lacking the ability to unlock its inherent value, they don’t understand that while relationships with partners such as Facebook, Google, and Amazon can be beneficial, they can also add to their data fragmentation challenges. Traditionally, three types of data exist, each with its own value:
- First-party data is captured over the course of a direct relationship with a customer and is the most valuable of the three to a business.
- Second-party data is obtained through a direct relationship with a noncompetitive brand partner, such as Google. This is essentially someone else’s first-party data shared in an aggregated and anonymized format.
- Third-party data is off-the-shelf data that can be purchased from data aggregators such as credit agencies.
To develop a comprehensive view of the customer, a business must look at all three data types and combine them into a unified customer profile.
Besides these traditional data types, deterministic data has recently emerged as a highly accurate customer data methodology. Deterministic data, unlike the other types that are locked in silos, identifies a single user across silos, devices (tablet, desktop, and mobile) and environments (Web browser and apps) to make the customer experience frictionless.
The average business has yet to invest in capturing deterministic data; however, Google, Facebook and Amazon are rapidly consolidating their data control by owning the data and locking it within their “walled gardens.”
As Facebook and Google continue to expand their data reach and control, marketers are beginning to realize this data lives within the technology giants’ walled gardens and cannot be taken outside these platforms. Once in a garden, it becomes another data point in Facebook’s or Google’s massive customer database. With the growing dominance of these technology giants, businesses must take ownership of their data and carefully manage how and where it is used.
The benefits of robust customer data are significant, but few brands in the retail and consumer space excel in exploiting it. The explosion of new data-driven capabilities (including marketing and advertising technology) and the demand for first-party customer data offer businesses an opportunity for gaining a new competitive advantage — if they can figure out how to monetize all the data fragmented among their multiple databases, technologies, and platforms. The difficulty of this task continues to increase as the growth in devices, touch points, and tracking generates more and more data.
The solution begins with understanding that traditional CRM (customer relationship management) systems and data-rich but insight-poor businesses, such as retailers and consumer packaged goods companies, have a limited ability to provide a comprehensive customer experience and cannot build a complete view of the customer.
To develop these capabilities, businesses need to control their customer data and build the technology infrastructure that will enable them to consolidate it into a single environment. A central data repository is the first building block in generating customer insights and ultimately monetizing data and identifying potential new revenue streams.
Isaac Krakovsky is a partner within A.T. Kearney’s Consumer Products and Retail Practice. Isaac works with his clients to deliver large technology transformations, digital and technology strategy initiatives, and due diligence and post-merger integration projects. His expertise includes retail business processes, leveraging technology to drive performance improvement, project and change management. He is based out of A.T. Kearney’s New York office.