From Silos to Success

The importance of customer data is not new news. It has been written about countless times before and most business leaders know that understanding their customer data is important. We speak to a lot of businesses about their customer data and most tell us that they would like a Single Customer View (SCV) but they are not always clear how they will build it or what they will do with it when they get there. A single view of customers can be a very powerful tool for businesses but the journey to get to that point is rarely easy.

Why businesses should build a single customer view

When someone tells me a goal or target one of my first questions is always ‘Why?’.  Why do you want a native app?  Why do you want a loyalty scheme?  Why do you need a single customer view?  It is surprisingly common that we see businesses trying to answer the how without, first, properly answering the why.  There is no point focusing on a goal without really understanding why you are doing it and what you are trying to achieve. Building an SCV can be a complex process so it is vitally important to understand how you will realise the benefits before you invest the time and money in it.

The main reason why any business should build a single customer view is that it allows them to provide highly targeted and consistent personalised marketing and experiences to their customers across all channels and touchpoints.

There is a big difference between understanding your customers as a whole and understanding them as individuals. Understanding your customers as a whole allows you to tailor your products, services, marketing and communication to suit the majority of your customers. It allows you to adjust your marketing and communication within different geographical regions or to change your product selection on different channels, but it is always personalising at a relatively high and basic level and is most often siloed within individual channels.

Single view vs multiple views

Very few businesses have a truly single view of their customer’s data; most will have multiple views of the data, often duplicated and siloed within specific channels. A typical retailer may have a range of customer touchpoints including in-store, online, app, email marketing and customer services.  We commonly see that, while they may be capturing rich data across one or more channels (typically eCommerce), that data is not always joined to customers’ interactions within other channels such as in-store or through customer services, giving the business a fragmented or siloed view. These siloed views allow businesses to only personalise their customers’ experiences separately within each channel, where this personalisation is driven through siloed data sets. This, invariably, leads to a disjointed and inconsistent customer experience. As customers, we do not view brands in siloes and therefore, naturally, we expect our experience to be consistent across every touchpoint.

A practical example of this can often be seen in product and content personalisation. It is not uncommon to see personalisation within email marketing being driven by a different data set than the personalisation within a website. This will naturally lead to different products or content being recommend to the same customer across different channels whereas a customer would expect these to always be aligned.

While technology is an essential part of building an SCV, it is also often part of the problem. Many technology solutions have the ability to capture customer data and drive personalisation within a specific area of customer engagement that they have been implemented for. Solutions targeted at functions such as email marketing, content management, search merchandising, A/B testing, clientelling, as well as many others, frequently have the capability to both capture customer data and personalise the experience based on that data but it is clear that this will easily lead to a business driving inconsistent personalisation from multiple views of a customer.

While, most of the time, some personalisation, even siloed, is better than no personalisation, the only way to drive consistent and joined up personalisation is to do so from a single source of truth.

Alignment on the customer data strategy is key in the journey to SCV

Before embarking on the journey to building an SCV, it is important for businesses to define and then align on their customer data strategy. They need to consider what data they eventually want to capture, how they will manage it, where it will come from, what data they already have and what they will do with it. The journey to SCV is likely to involve multiple phases of change, technology platforms, departments, people and processes and needs strong coordination to be successful.

The data that goes into an SCV comes from a multitude of different customer touchpoints ranging from browsing the website, buying instore through to engagement with customer services. This will always involve multiple departments within a business and will be reliant on different technology platforms such as ERP, OMS, POS, E-commerce, Email Marketing and Customer Services – as each platform will play some part in capturing customer data.  Many businesses will have separate IT, Digital and Marketing teams and each of these may be responsible for making decisions on the use and implementation of technology within their area. Unless each of these departments is aligned on the customer data strategy it is very easy for decisions to be made that result in siloed data and customer experiences. Decisions on technology platforms should be made based on how they align with the SCV strategy and not just on the functionality they provide.

A change that impacts almost all departments within a business will sometimes require a change to organisational behaviour, not just a change to technology. A business cannot expect to engage with its customers with a single voice when it doesn’t behave, make decisions and implement change collectively to work towards the same vision.

Building an SCV from scratch in one go can be challenging for many businesses and will, sometimes, involve a major business transformation.  A business that engages with customers across multiple touchpoints is likely to have a number of legacy solutions such as ERP, OMS and POS which cannot easily be upgraded or replaced as part of a single programme.  Moving to SCV is commonly a multi-phase journey that involves iteratively consolidating the number of views that you have until there is just one and ensuring that this data is used to drive personalisation across all of the channels and touchpoints. This can take years to complete – but that’s ok. Planning your eventual destination and the embarking on the journey is the important bit.

A CDP is a platform that can ingest data from multiple sources, match, merge and deduplicate that data in order to build a complete picture of a customer, including their identity, online purchases, returns, preferences, interactions with customer services, their online searches, the products and content they viewed, interactions on social media and even their purchases in store.

The platform can then use this data to create customer segments which can then be used to drive personalised experiences and multichannel marketing. The CDP becomes central to customer master data management, integrated with multiple systems to ingest data and also with systems to provide customer segments which are then used to drive personalisation.

We typically see the CDP being initially integrated with OMS, ERP and email marketing solutions as a starting point, in order to build customer profiles with first party data. Once it is in place the business can continue an iterative programme of integrating it with existing and new systems, allowing it to ingest more data to start reducing the number of different, fragmented and siloed customer views that the it has. This may take some time to fully complete but as they begin to reduce the number of customer views, they will start to provide an increasingly consistent experience to customers.

Data and consent

While building an SCV is both an organisational and technology challenge, gaining customers’ consent to allow a business to identify them and capture their data can be challenging. Customers increasingly care about their data and privacy which is why businesses should be honest and upfront about capturing data and, crucially, give customers a good reason to give it away. Data is valuable and a business cannot expect every customer to always give it away for nothing. As an example, many retailers have trialed e-receipts for in-store transactions where the customer is asked for their email address so that a receipt can be emailed to them.  While this is sometimes partially successful, it is not a particularly big benefit for the customer so many will say no.

This is where a loyalty scheme can come into play. There a number of reasons why a business might want to implement a loyalty scheme and, despite what many people may think, it is not always about directly encouraging customers to spend more.  One of the key reasons is to give customers a good reason to give up their data.

One of the largest and most famous loyalty schemes in UK retail history is the Tesco Clubcard. Launched in 1995 the scheme allows customers to collect points based on the amount they spend in store by swiping a card at the checkout. The points can then be redeemed for money off future purchases with Tesco or as payment for goods and services with partners. While anyone would be forgiven for thinking that the key aim of the scheme is to encourage customers to spend more with Tesco, the real benefit is the insight it gives Tesco into individual customers. When a customer swipes their Clubcard and the checkout, they are allowing Tesco to identify them and build a detailed profile of their shopping habits. Tesco starts to understand where and when they shop, what they buy, how sensitive they are to discounts and offers as well as a raft of other aspects of their behaviour. The business can then use that data to target customers will highly personalised marketing and experiences.

After the Clubcard was first trialled, the then Chairman of Tesco said at the time ‘What scares me about this is that you know more about my customers after three months than I know after 30 years’. Until then, shopping with the grocer was largely anonymous where the business held data on customers as a whole but not as individuals. The introduction of the Clubcard started Tesco on their journey to building a single customer view.

A loyalty scheme can be a big enabler of SCV, especially with an omni-channel retailer.  While it is easier to track customers online (although legislation and technology is making this increasingly more challenging), a loyalty scheme will encourage customers to identify themselves at the point of purchase, both online and offline and allow the brand to associate a purchase and interaction with that customer.  If the customer uses the loyalty card for purchases through multiple channels (digital and non-digital) this can be a critical part of building an SCV.  While a loyalty scheme can potentially be expensive, it can be a vital tool to reward customers for parting with their data.

SCV is a goal that most businesses aspire to achieve. It is one which has both organisational and technical challenges and, getting there, is likely to be a multi-phase journey. However, each step of that journey will allow a business to understand and engage with each of their customers better.