Customer Data Platform & Personalization Engine combined equals personalization on steroids
A Customer Data Platform (CDP) and a Personalization Engine have the same end in mind, namely, to use personalization as a data- and results-driven marketing strategy. Integrating a CDP and a Personalization Engine is the ultimate marketing technology stack, without which your customer journey data will be incomplete.
Different, yet highly compatible ever-after partners
Without getting overly technical here, the main difference between a Customer Data Platform (CDP) and a Personalization Engine is:
- a Personalization Engine can personalize online shopping experience for anonymous customers based on contextual or behavioral data. This data can be, for example, location, weather, campaign, page type or visitor’s behavior.
- a CDP can collect, merge and edit all customer data from all touchpoints, both physical (offline) and virtual (online), for identified customers. This data can be, for example, purchase, marketing campaign or customer service data.
One could say that a Personalization Engine orchestrates the journeys of all visitors, known or unknown , whereas a Customer Data Platform can actually show the whole customer journey of identified visitors. Both are important, though. Personalization Engine, because customers browse webstores vastly before making a purchase or registering as customers. And a CDP, because physical locations can still be about 80% of all consumer businesses.
Owning and having real-time access to all your customer data, is the added value of combining these two marketing technologies.
This martech stack has even been future-proofed. The Custobar CDP and the Frosmo Personalization Engine both use first-party and server-side data. In other words, this couple will be a happily ever after partnership even in the very near wake of the third-party cookie. After all, the third-party cookie will be permanently unavailable by 2022.
Personalization Engine and Customer Data Platform briefly defined
Personalization Engines like Frosmo collect customer data and analyze customer behaviour to create customized ecommerce customer experiences, such as product recommendations and special offers. They generate a profile based on browsing data and use this data to deliver and optimize personalized customer experiences.
Since Customer Data Platforms (CDPs) can be very varied from platform to platform, I am here specifically using Custobar as an example. Custobar is in essence two tools in one. It is a CDP and a marketing automation technology.
Custobar CDP unifies all customer data of the identified customer from all touchpoints into one single 360° customer profile and into one place. Purchase and order data, behavioural data from web and mobile apps, customer service data, etc., are all brought together and made actionable in real time. This data can then be used for building customer segments and creating targeted, personalized, automated omnichannel marketing and communications messages, such as emails, SMS, push notifications, display ads, Google Ads, Facebook Ads, etc.
No more mixed messages
As long as a (potential) customer is unknown, Personalization Engines are invaluable for personalization. The moment an anonymous customer has been identified, maybe by making a purchase, answering our survey, or subscribing to a newsletter, we can start making highly targeted and personalized marketing messages to them. But we need a Customer Data Platform in order to do so.
I briefly mentioned above that customer segments, audiences, can be created in Custobar. Well, Frosmo’s Personalization Engine creates them, too. The customer segment that Frosmo has created can be brought into Custobar as such and utilized as a ready-made audience. Or, customer segments can be created within Custobar based on a whole host of customer information.
One thing is for sure. After integrating Custobar to Frosmo, there will be no product recommendations or offers on products that the now identified customer already purchased. What there is, is plenty of room for personalized marketing messages.
Frosmo and Custobar, a tech stack in action. The step-by-step for retail and consumer businesses
To clarify, let’s look at what all this means in practice. From the point of view of a business, the Frosmo and Custobar marketing technologies stack to map the customer journey and personalize the customer experience as described below.
In our example, customer X is browsing a webstore to find the best eBike for making their way to and from work. The browsing has been going on for quite some time, and its intensity has varied. This browsing has also been spilling at times to cycling gear with a positive bias to Keli Clothing products.
Note! What follows is very simplified. To find out the full benefits and features, contact Frosmo or Custobar.
1. Customer X visits an ecommerce site. It is a general site, not one that sells eBikes or cycling gear specifically, but they do have them in their wide selection as well. Customer X is a new visitor so site personalization is done based on contextual data, statistics from other visitors and Frosmo’s predictions based on those. As Frosmo learns about Customer X’s behavior, product recommendations and site experience become more targeted toward the correct phase of the customer journey and Customer X’s main interest a.k.a. affinity.
2. Frosmo’s AI-driven Personalization Engine – or Website Personalization Platform – optimizes customer X’s browsing experience by making eBike and Keli clothing cycling gear recommendations and informing our X of the best deals in their neighbourhood or residential area. This is made possible by profiling customers based on their browsing data, geolocality, and other relevant information, and building customer segments based on this data.
3. When customer X spends a set time on the ecommerce site, a pop-up with a CTA will prompt X to order the newsletter with an offer, say 10% off a new customer’s first purchase.
4. Customer X doesn’t make a purchase but registers for a customer loyalty program. Now we know who the customer is! A new customer called RJ (not ‘customer X’ anymore) will now be automatically saved to the Custobar Customer Data Platform.
5. After RJ has joined the loyalty program, she gets an email welcoming her as a loyalty program customer and asking for her specific interests with a simple survey, for instance “What products are you mostly interested in?” This is called data enrichment. It can be done in a variety of ways, but the point is to save this information in the customer profile for later marketing and communications purposes. RJ answers ‘cycling,’ because she is interested in eBike and cycling gear offers and content.
6. RJ starts seeing personalized ads on Facebook, such as pictures of eBikes and related Keli Clothing gear. (Technically, Custobar sends segment information to Facebook using data both from Custobar as well as the data Frosmo has been updating to Custobar.)
7. RJ also receives newsletters regularly with personalized content that is based on her interests in cycling and outdoor sports. With personalized content, the newsletter will be relevant for RJ and she will continue reading and enjoying it.
8. When RJ clicks a newsletter link with a campaign UTM and lands back at the ecommerce site, the product recommendations and knowledge-sharing content she sees are tailored toward her interest in eBikes. This helps her decide which bike and accessories to go for. Especially buyers of complex and high-value products such as eBikes benefit from content that is relevant for them. That’s good for SEO, too. Now RJ makes the eBike purchase. (A brief sidebar: using personalization engine to help returning visitors pick-up where they left off has a dramatic impact on click-through and conversion rates.
9. A week after the purchase, RJ receives a personalized email where an influencer’s video on how to get the most out of the eBike is embedded. The email also contains related product recommendations, such as cycling gear. RJ clicks to the cycling gear page and eventually adds two products in the shopping cart. However, she doesn’t finish the purchase.
10. Two hours later an automatic email will be fired to RJ to remind her about the discarded shopping cart. (A brief sidebar: Custobar clients who have created abandoned cart email automations have a conversion rate up to 40 percent from those messages alone.)
11. RJ opens the email but doesn’t finnish the purchase in the webstore. Instead, she goes to her nearest brick-and-mortar store. After consulting a salesperson, she buys Keli Clothing cycling pants and a SIGG sports bottle.
12. Both webstore and brick-and-mortar store purchases are saved to RJ’s customer profile in the Custobar CDP. When RJ sees ads on social media, Google, or goes to the webstore again, she will not be recommended eBikes or any other cycling gear that she has already bought.
To date, RJ remains a newsletter subscriber and revisits the store and webstore on a regular basis.
Disclaimer: No Keli Clothing, SIGG water bottles, eBikes or other exemplary products or ecommerce sites were harmed during the making of this blog post. All examples were imaginary, not pertaining to actual customer cases.
About the writer:
Tatu Kuivalahti, CEO and co-founder of Custobar is an entrepreneur, leader and business developer focusing on digitalization of the retail industry.