How to build the data infrastructure to get personalized customer experiences right

As the pandemic has accelerated the growth of online shopping, customers have come to expect a personalized digital experience. But as a new report has made abundantly clear, customer expectations have already outpaced brands’ ability to deliver these experiences. 

The foundation for delivering any personalized customer experience is quality data. Up until recently, third-party data has acted as a crutch for the digital marketing strategies of almost every business, but as major players like Apple and Google have pivoted to a more privacy-forward approach, the tides have changed. The onus is now on businesses to effectively use the first-party data collected directly from customers. 

That’s no bad thing. First-party data actually gives businesses much more specific, direct insights about their customers, unlike third-party data which largely makes broader generalizations. When used effectively, first-party data is the secret ingredient that will enable your business to deliver truly personal experiences.

A year into the pandemic and it is clear that personalization presents a real opportunity for businesses. Given the convenience of online shopping, more than half (60 percent) of UK consumers say they’re likely to become repeat buyers after a personalized shopping experience with a retailer. As a result, investing in personalization promises a powerful return, particularly when it comes to improved customer retention. 

This isn’t something that has passed businesses by. In fact, the State of Personalization study found that 73 percent of UK retail and e-commerce businesses believe personalization is now table stakes in today’s digital economy. 

Nonetheless, 39 percent of businesses see data as the biggest challenge to personalization, with many still uncertain of how to get the technical foundations in place for a successful personalization strategy. 

While the pandemic has forced companies across almost every industry to embrace a digital-first approach, simply moving online isn’t enough. True digital transformation means paying attention to the technical foundations, and when it comes to personalization, there is a pressing need to tend to the data infrastructure needed to deliver quality customer interactions. 

As the number of interactions with customers increases and the variety of possible touchpoints increases – be that on social media, chat functions or websites – businesses find themselves overwhelmed with data. 

Personalization, like any insights-driven customer experience, requires a single, trustworthy source of information from which to guide and influence your activity. To get there, the key is to sort that influx of customer data into a robust foundation onto which other tools can be integrated. 

Customer data platforms (CDPs) are the best way to consolidate and organize the data your business is collecting, to create a complete picture of your customer. By using a CDP as an accurate central resource, teams are able to access reliable customer data and prevent the kind of data silos that can lead to error-ridden personalization campaigns.