Why We Need Customer Data Hubs

Do you ever feel like technology, that broad category of tools, systems, platforms, and arbitrarily-named widgets meant to create efficiencies, actually requires more time than it saves?

The grand theory of marketing technology and how it can help us deliver the right message to the right audience at the right time is promising, hopeful, and enlightening. In practice, marketing technology, specifically automated communications, is challenging, confusing, and vexing.

The problem lies not in the “why” to deliver relevant messages to targeted prospects and customers, but rather “how.”

There are just too many tools. Tools collect customer data. Tools to record data about interactions with customers. Tools to advertise and deliver marketing messages to customers. Tools to collect data about the performance of those messages. And on and on. Gartner predicts that by 2017, CMOs will spend more on IT than CIOs.

The attempt to confine a marketing communications program or a customer data set within a single tool or platform leads to a siloed approach and myopic outlook. Information from each tool in play (from analytics to customer service to email to CRM, etc.) must be combined to gain a panoramic view of the customer experience. Meanwhile, the confluence of multiple data streams from disparate tools often results in the customer data equivalent of a muddy creek.

How can we keep all the data clean while maintaining its never-ending supply and practicality?

The Need: Customer Data Hub

I’m of the opinion that many of us in the digital marketing industry get too caught up in tools, or the newest, brightest, shiniest platforms on the market.

We are tool-obsessed.
Are all the tools you are currently utilizing for analytics, CRM, email marketing, testing, surveys, ecommerce, live chat, etc. really necessary? Probably.
Are there alternative solutions to tools in your current marketing technology stack that could carry out a unique function better, faster, cheaper? Maybe.

The real question lies in how to build a better relationship with new and existing customers:
Would it be advantageous to share customer data between tools to produce a more relevant experience for the customer? Hell yes. Forget about tools for a second. Data is your most valuable asset.

The point of the customer data hub is to gather information about customers regardless of how and where they interact with your brand (site vs. app, mobile vs. desktop, email vs. help desk), and to make smart decisions about the next best interaction with that individual.

For example: It’s probably not a bad idea to allow a visitor’s actions on your website or app to inform the next email message your brand sends to that person.
 

Potential Solutions

Here are some sample customer hub/personalization tools below. Please note that I am not providing an endorsement here. These are just samples I have chosen to list based on my own research and experience.

Fresh Relevance – Connects email service providers and shopping cart platforms for online retailers
Boomtrain – Tracks interactions with your website/app to deliver personalized, omni-channel engagements
Umbel – Helps organizations in the entertainment and non-profit industries create custom customer segments
Segment.com – Houses all customer data and provides easy integrations for popular analytics, CRM, and email tools
 

How They Work

Each of the customer data hub providers above operate slightly differently, but here’s a high-level explanation of how customer data hubs operate.

• Tags are placed to gather customer data and information about their behavior and actions.
• Some tags are used to identify who visitors are, while others are used to track where they go and what they do.
• Libraries of tracked data are then stored and sent on to respective tools and platforms in your marketing technology stack.
• One or a series of tracked behaviors can act as a trigger to kick off targeted messaging to individual customers and prospects.

 

Sample Communications Programs Empowered by Customer Data Hubs

 
Lead Nurture – As opposed to creating a “set it and forget it” workflow, make alterations and adjustments to your communications based on app/site behavior (Analytics) and sales interaction (CRM).

Predictive Recommendations – Monitor activity on a website or app and provide customized recommendations for individual users via email. Here is more info from Fresh Relevance and SendRoll.

Product Onboarding – The most crucial (and confusing) touch points between brand and user are usually right at the start of a new engagement. Deliver useful tips and helpful resources to customers based on their website page visit behavior and search patterns.

Product/Service Utilization Updates – Keep customers engaged and informed about how they are using (or not using) a product. Nest does a very good job of this.

Conveying Social Proof – Encourage customers to take action by introducing elements of social proof and/or scarcity (i.e. “only three left”). Here is a visual example of this concept from Fresh Relevance.

Shopping Cart Abandonment – By delivering a recovery email to interested prospects, retailers can increase conversion rates and win back more customers. Here are some additional insights from Boomtrain.

Email Cadence Testing – Data can flow to or from an email marketing tool. Combining email behavior tracking (opens and clicks) with website or app analytics, marketers can determine whether they are sending emails too much or not enough. Segment.com offers some helpful tips regarding email overload.

The Hitch
For all of the programs explained above that involve triggered email communication, customers must either subscribe or log in to tie site/app behavior to their email address. Otherwise, they are viewed as anonymous users and email marketing campaigns are not always feasible.
 

The Real Benefit

With any change in process or modifications to how marketing technology is used within an organization there are gains and losses to be had. Consider the following before deciding to utilize a customer data hub or choosing which solution is best for you.

What We Gain: Improved marketing message relevance and greater understanding of each customer by avoiding data silos.
What We Lose: Time and development resources dedicated to integrating one ore more tools manually. Plus, as many hubs allow for easy, one-click updates to the tools passing data to and from the customer data hub, the costs involved with switching from one tool to another are minimal.

Recognize that marketing technology providers provide value in their features, functions and ease of use. You derive value from marketing technology by utilizing them to gather, analyze, and act on customer data. Maintaining a hub at the center of your marketing technology mix will help to provide balance in operations and clarity in decision marking.