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Proposition 24 demands four pillars for a ‘serious’ customer data platform

Brands can offer a superior customer experience, nurturing anonymous users into known, loyal customers, with a serious customer data platform that prioritizes four key capabilities. Here’s what needs to be done according to Adrian Nash, head of strategy at SAP Customer Experience.

While the 2020 US election was anything but straightforward, voters in California were clear on one issue: they want better oversight on the use of customer data by businesses. Over 56% of voters elected to pass Proposition 24, which expands the state’s consumer data privacy laws, including provisions to allow consumers to direct businesses to not share their personal information. Globally, the issue has already been addressed, with the EU’s GDPR containing a “purpose limitation” principle stating: “The purpose for processing of personal data must be known and the individuals whose data you’re processing must be informed.”

If brands weren’t listening before, they need to now. Consumers understand that their data is valuable, and they want transparency and honesty about how it’s used and to know its purpose. If a brand is not respectful of that desire, customers won’t hesitate to find alternatives.

Superior customer experience (CX) has long been understood as a driver of new revenue and business growth, but as behaviors evolved during Covid-19, brands have had to re-evaluate CX strategies. According to McKinsey, 75% of US customers have tried a new shopping behavior or purchasing touchpoint during the pandemic and almost 80% will continue with the behavior. With this rate of change, delivering personalized experiences that nurture anonymous users into known, loyal customers, is no small feat. There is only one way for brands to keep up: through data.

But how do brands pull together all of that data into one place to deliver that superior CX and ensure it’s used respectfully? The answer lies in a serious and all-encompassing software that can create persistent, unified customer databases – in other words, a customer data platform (CDP). The best CDP is one that roots itself in connection, understanding, respect and engagement.

1. Connection

Today, we are faced with the moral obligation to stay physically distanced from each other – dissolving traditional forms of human connection. Brands have had to find new ways to meet customers in real-time and know exactly what they want, and they’ve had to do it across multiple channels: in-store, web, phone, mobile app, and social media. And expectations for access to brands are only increasing: 24/7 service chats, BOPIS, hyper-personalized offers and recommendations are now expected staples.

Providing this level of service across this growing number of channels requires a living, breathing, unified customer profile, and a single customer view. This view is the one-way ticket to maximizing relationships by providing richer insight and engagement, and it can only be achieved with a CDP.

2. Understanding

Like in any relationship, it’s important to understand the other party. Today’s brands should look at customer data to ensure an understanding and adjust engagements accordingly to make that relationship stronger. Understanding through segmentation and KPIs that are calculated in real-time for relevant, personalized conversation journeys is key. A brand that can effectively – and responsibly – use data to understand customers on a granular level will be able to create even more customized communications, product recommendations, and offers.

The ability to use data to enhance experiences, and increase levels of connection and customer understanding, is powerful. But as the saying goes, with power comes responsibility. Pew Research recently found that 81% of Americans think the potential risks of data collection by companies about them outweigh the benefits. Brands must earn consumer trust through being transparent about how data is being used via personalized offers and seamless experiences and allowing the option to opt out. Which leads to the next pillar: respect.

3. Respect

As noted, consumers are becoming increasingly protective of their own data, especially as it’s requested more frequently with these new buying patterns.

Enterprises are realizing that CDPs can help elevate CX strategies and honor the purpose of customer data. CDPs serve as a paper trail for data, where brands can see where customer data comes from, which is especially important in terms of compliance and privacy regulations like the GDPR, Proposition 24 and the CCPA. Any serious CDP should gather valuable, permission-based data to drive more personalized experiences while protecting customers’ personal data, and enable customers to maintain control over their own data through an intuitive, self-service preference center.

4. Engagement

We live in the age of the customer – so customer engagement should always be top priority. In Gartner’s report, The Four Attributes of Customer Engagement, researchers stress the importance of understanding customer engagement. Engaged customers are generally better brand advocates, are more loyal and are likely to spend more money on your brand.

That said, companies across industries can do more to provide positive customer engagement, whether it’s personalized communications or having more (virtual) face time. Via hyper-personalized cross-channel engagements, CDPs are a brand’s best friend when it comes to appealing to the wants, needs and desires of consumers. This technology is the key to increasing the ROI of connected platforms, retaining customers with more relevant products and services, and offering the convenience of customer context.

Buoyed by the entry of traditional marketing clouds, the CDP – per Forrester – can no longer be shoehorned as a solution that “centralizes customer data from multiple sources and makes it available to systems of insight and engagement.”

Getting serious about CDPs requires a level of complexity that matches the changing, complicated nature of customer journeys and the high value customers know to place on their own data. As Covid-19 accelerates the pace of innovation across industries, it will be imperative for brands to meet customer needs by leaning into CDPs that embrace connection, understanding, respect and engagement.

Adrian Nash Is head of strategy, SAP Customer Experience

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