Why is it so painful to learn about your customers?
Recently, there has been an explosion in the number of tools that claim to provide a complete 360 degree view of your customer. A quick analysis on all of the startups based at Ryerson’s DMZ Accelerator showed that companies were using at least 17 different unique tools to better understand their customers. Each claims to have a particular niche expertise, whether it is monitoring customer behaviour on your website, communications, assisting with A/B testing or CRM. This involves an endless amount of switching back-and-forth between between various tools and frustration.
Furthermore, combining data has historically been a manual process that is both slow and costly. At a recent event, digital analytics consultant Stephane Hamel talked about a large enterprise approaching him asking how they could build a platform to get a “360 degree” understanding of their customers, integrating the data they had collected using various different tools. They were eager to dive in immediately and hoped that throwing a lot of cash at the problem would suddenly provide them with better analytical insights. He cautioned them against this approach given the poor quality of data on hand and warned that they might be heading down a black hole. While in this case the eventual outcome was uncertain, most large companies I’ve spoken to openly admit that they do not know how to approach the data analysis and integration problem.
This is where startups and other companies have an advantage. Firstly, they don’t have the baggage of poorly collected historical data that is riddled with errors. Secondly, while APIs have existed on the web since 2000, they are truly coming of age in the cloud-computing era. The ability for these various tools to communicate with each other makes integrating data easier than ever before. Enter the CDP:
Customer Data Platforms
Customer Data Platforms have now been in existence for over 3 years. The premise is simple; to integrate customer data across various platforms in order to create a customer profile. There are many companies out there doing this; yet marketers still facing significant challenges. Additionally, these companies choose to focus on enterprise clients, ones with significant complexities around their data. Why isn’t something similar available for Startups and Small/Medium Enterprises? Simply put the needs of large enterprises and startups is different and the challenge lies in making a platform that caters to the needs of fast-growing startups, provides the appropriate integrations and does so at a price point that they can afford.
360 degree customer understanding is a problem most companies are nowhere near solving. Even as every tool tries to become “the last tool you’ll ever need.” So far none have succeeded…