Using customer data to build a business is a lot like constructing a house—you need a solid foundation and the right materials to create something strong and lasting. But what if two-thirds of those crucial materials were left not only unused but scattered and unorganized? In many industries, such waste would be unacceptable, yet when it comes to customer data, this level of inefficiency is surprisingly common.
In fact, a recent Forrester report indicates that between 60% and 73% of all data within an enterprise goes unused for analytics. A key part of this challenge is data debt—the accumulation of uncategorized, unstructured data that grows increasingly difficult to organize and use over time. Instead of fueling customer engagement, this untapped data is dead weight, dragging down productivity and creating a burden on the business.
These inefficiencies are exacerbated by the explosive growth of data generated in businesses today from multiple sources, including purchases, loyalty programs, online interactions, and email. Many brands struggle to connect these data points quickly enough to gain meaningful customer insights and take action.
With this overwhelming volume and disorganization of data, what can businesses do to make it work for them? How can they quickly and efficiently transform raw data into valuable insights that drive engagement and growth?
Key Steps for Data Activation
The first step that IT leaders need to know to fully activate their customer data and put it to work for their business is understanding the power of first-party data. With it, businesses can create highly personalized marketing materials and customer interactions that drive business value in countless ways.
The next step is to unify all the valuable data into organized customer profiles—and to do it faster, smarter, and with less effort. Speed and efficiency are key for transforming raw data into actionable insights that can be immediately leveraged across the business. To achieve this, companies need AI-powered tools that streamline identity resolution—the process of connecting multiple data points to create a single, accurate customer profile—across all business-defined identities. This ensures a comprehensive and accurate view of each customer, which is essential for understanding their journey to conversion.
These fundamental considerations point to the need for a comprehensive solution that can handle both the technical and strategic aspects of customer data management. Customer Data Clouds (CDCs) emerge as a powerful answer to these challenges, offering an integrated approach that directly addresses the speed, unification, and activation requirements of modern customer data.
Transforming the Value of Data with Customer Data Clouds
Customer Data Clouds are powerful solutions for overcoming the challenges of untapped, scattered data debt and unlocking the full potential of first-party data. These platforms create a connected ecosystem of applications, collecting, unifying, and analyzing customer data to build detailed, actionable profiles for every customer. Using machine learning and other AI tools, CDCs process and interpret data at incredible speed, uncovering critical patterns and insights that drive more dynamic, personalized and profitable customer experiences.
CDCs also offer a flexible platform for custom data models, providing full control over models, workflows, and views—making it faster than ever to build a complete customer view. From there, customer profiles can be activated in real time across the entire business. Brands can quickly respond to streaming data, delivering personalized, perfectly timed experiences based on customers’ latest behaviors.
See also: Enabling Innovation with the Right Cloud Data Architecture
Real-world Use Cases
The combination of AI and CDCs helps marketers build stronger relationships with customers, enabling quick action on audience behaviors and insights to deliver engaging, lasting connections.
For instance, the Seattle Sounders, a major league soccer franchise, have used machine learning with their customer data to build targeted audience segments. Based on these segments, the marketing team delivers tailored content based on that fan segment’s preferences and behaviors. Their use of customer data clouds allowed the franchise to uncover connections, insights, and fan segments that they had not seen before. These insights helped them improve email personalization and other avenues of fan engagements, leading to an impressive 80% increase in conversions from the previous year.
As another example, a national coffee chain leveraged its CDC to transform generic customer segments into actionable insights. By analyzing purchase patterns, they identified distinct groups like ‘frequent commuters’ who visit between 7-9 AM on weekdays and ‘weekend brunch enthusiasts’ who typically order food items with their beverages on Saturday mornings. After implementing personalized promotions based on these insights—such as early morning mobile offers for commuters and weekend breakfast bundle deals—the chain saw a 45% increase in offer redemption rates and a 30% boost in average weekend ticket size.
Best Practices for Launching Customer Data Solutions
To effectively use customer data, it needs to be organized, refined, and democratized within unified customer profiles. The success stories of organizations like the Seattle Sounders demonstrate these key best practices for launching a scalable customer data cloud:
- Data moves fast: Use AI-powered tools for quick access to and use of first-party data, keeping up with modern customer expectations. The Sounders’ ability to rapidly analyze and act on fan behavior demonstrates the power of real-time data activation.
- Focus on outcomes: Be clear about the problems to be solved and the insights needed from customer data. Just as the coffee chain focused specifically on improving promotion relevance and timing, define concrete goals that drive measurable business results.
- Consider privacy: Ensure the data cloud complies with privacy laws and regulations specific to the industry and location. This is especially crucial when handling sensitive customer information like purchase histories and location data.
- Value customization: Choose solutions with flexibility for customer integrations, data governance, and consent management. The Sounders’ success came from their ability to customize audience segments and content delivery based on their unique fan base.
- Get C-suite buy-in: Demonstrating the value of customer data through concrete metrics—like the Sounders’ 80% conversion increase—is essential for securing executive support and optimizing its use.
Customer data is the building blocks to an engaging and profitable customer experience. As businesses continue to be inundated with data, it becomes increasingly challenging to maximize its full potential. By leveraging a scalable cloud solution to activate and organize this data, businesses can make the most of untapped data and transform their marketing strategies, ultimately enhancing customer experiences and driving growth.
Derek Slager is the Co-founder and Chief Technology Officer of Amperity. He co-founded Amperity to create a tool that would give marketers and analysts access to accurate, consistent, and comprehensive customer data. As CTO, he leads the company’s product, engineering, operations, and information security teams to deliver on Amperity’s mission of helping people use data to serve customers. Prior to Amperity, Derek was on the founding team at Appature and held engineering leadership positions at various business and consumer-facing startups, focusing on large-scale distributed systems and security.
