[Editor’s note: This article has been reposted with permission from MarTech Advisor. View the original article here.]
“Know thy customer” might be the chief commandment of the modern business era. The proliferation of Salesforce and new platforms claiming to be “Salesforce for X” demonstrate that Customer Relationship Management (CRM) is top of mind for companies of all stripes. While B2B companies were the first to adopt CRM at scale, today even consumer packaged goods (CPG) brands are investing to create direct relationships with the consumer, and in some cases even enter the e-commerce space themselves. The most extreme example of this trend is indisputably Unilever’s $1 BN acquisition of razors-by-mail startup Dollar Shave Club in 2016, but other CPG’s are taking more practical steps to capture CRM data, such as Kraft’s robust content program publishing recipes on the web, in print, and in email newsletters.
Until recently, gaps in customer knowledge could be blamed on technological limitations. In the days before digital marketing, brands relied on panels, surveys, and focus groups to understand their customers reached via TV, direct mail, billboards, and print ads. When Internet 2.0 and adtech came around, brands were eager to utilize these new tools to reach and interact with their customers and jumped into social media, apps, and video, but often either were stuck with cookie-based marketing or in a walled garden. Identity was the missing piece to make people-based marketing a reality, not only in the digital world, but in the physical world, as well.
With today’s identity resolution technology, it is now possible to match a consumer’s behavior beyond the scope of a single campaign or channel, while complying with the strictest data governance and privacy standards. I’m seeing a seismic shift in the marketing landscape is already underway, as for the first time, brands are able to build a holistic, cross-channel view of their customers, and put those customer profiles to work to generate longitudinal insights and maximize customer lifetime value. I also believe this trend will continue forward, and soon brands will invest in augmenting this database further, by building a Virtual CRM, or vCRM.
In a vCRM, customer attributes aren’t limited to first-party interactions with a brand or its media. The incredible diversity and depth of available third-party data means any brand can compile an in-depth profile of a consumer based on online and offline signals—where do they shop, what are their interests, etc. For brands short on customer data, typically third-party transaction data (either at the product or merchant level) or location data serve as the foundation of a brand’s vCRM, indicating who is a customer of the brand or its competitors. While most brands start their vCRM with the intention of understanding their existing customers, third-party data sets can also help identify and add previously unknown customers or prospects to the vCRM.
For example, a restaurant chain might have some first-party data from a loyalty program. It can leverage the vCRM to build out the profile of these customers by deterministically linking attributes gleaned from third-party data, such as what TV shows they watch, other products they purchase, what cars they drive, etc. The restaurant chain knows its customer base is far more extensive than their loyalty program would suggest, but how can it add current and prospective customers to its vCRM? Third-party transaction and geo-location data can help identify current customers who visit the restaurant’s locations, as well as current customers who dine with the competition. The chain can add these newly identified customers or prospects to its vCRM and continue the process of enhancing the profiles with other data assets.
Where does a vCRM live?
With the proliferation of in-house data lakes and customer data platforms, it has never been easier to deploy and manage a secure, privacy-safe environment to house a brand’s vCRM. This should be a major development for quick-service restaurants, CPG, consumer electronics and other brands that have historically found it challenging to generate direct insights from their customer base. With vCRM, brands now have the ability to turn anonymous data about who has visited a location or transacted at a certain store.
It’s in this way, that companies should not be scared off by the overwhelming task of going back and collecting data on as many customers as possible. With vCRM, third-party data can become the core of the customer profile, augmenting and in some cases obviating the need for first-party data, like name, email, phone, or postal address. The process of identity resolution itself creates persistent IDs that can translate across platforms and continue to accumulate more and more attributes attached to them.