What is customer data unification and why is it important to businesses?By Jon Taylor on January 25, 2022 - 5 Minute Read
How many times have you purchased something online and thought “this company just gets me!”
The buying journey has been smooth. You were targeted with a product you liked on social media based on previous purchases. When you clicked on the company’s website, your historical information was stored. The checkout experience was seamless. Your product arrived quickly.
You’re one happy – and likely to return – customer.
What you don’t see, though, is the work that goes on behind the scenes to make transactions like this happen. And a big part of that process involves customer data unification.
More companies are turning to customer data unification to tailor their advertising campaigns towards what customers want and to make their buying journeys easier. They all have the data they need to do this – in fact, there’ll be 16 zettabytes of data in storage globally by 2025 – but being able to fully take advantage of it all is a whole different ball game.
Siloed data and fragmented customer profiles give businesses an incomplete picture of what their customers want and how to target them – but there is a solution. This piece will simplify the customer data unification process and show you how to make your data a key component of your marketing and sales strategy.
In this blog, we’ll cover…
- What is customer data unification?
- Why is customer data unification important to business?
- The nuts and bolts of the customer data unification process
Let’s dive in.
What is customer data unification?
Customer data unification turns raw customer data from multiple sources, which might be fragmented, incomplete or conflicting, into a set of unified profiles or single sources to use in sales, marketing and customer experience.
For example, a customer may use a shortened name for a purchase (Tim Gardener) and a slightly different email at the checkout (firstname.lastname@example.org). The next time the customer buys a product, they use their full name (Timothy Gardener) with the same email address.
Customer data unification will combine these details and recognize that the same person made both purchases. During the unification process, data points for both transactions (like what advertisements were used or what products were purchased) will also be tied to the customer to create a more accurate profile; painting a clearer picture of their behaviors and habits.
This is customer data unification.
The data we gather from customers can also be much more insightful. Every time a sale is made or a contract is signed, there is a ton of data up for grabs, from the customer’s first touchpoint all the way to their buying behavior and needs. According to Harvard Business Review, three types of data are usually collected by businesses:
- Self-reported data: Name, email, contact number, age, gender, occupation, employment history
- Digital exhaust: Location data, browsing history, type of device used
- Profiling data: Personal interests and behaviors to create predictions
Each dataset is different. It can improve a product or service, help companies build more targeted marketing campaigns or (perhaps somewhat controversially) be sold to third parties as Facebook does:
Collecting this data is one step, but unifying it and making it actionable is another.
A lack of unification can create fragmented data silos where data points are missed, or information is left incomplete. Bringing this data together and storing it in one place gives businesses a single source of truth and a more accurate view of their customers.
During the unification process, data points for both transactions (like what advertisements were used or what products were purchased) will also be tied to the customer to create a more accurate profile; painting a clearer picture of their behaviors and habits.
Why is customer data unification important to businesses?
Customer data unification can help businesses improve their sales and marketing funnels, create more engaging campaigns and, most importantly, gain a true understanding of customers’ needs.
No matter what your business is selling, the modern customer journey is complex – whether it happens online or in a brick-and-mortar store.
Data from acquisition channels like websites, social media channels and ads – along with online and in-store checkouts – can give you a glimpse into an individual customer’s journey. This data tells you how long a customer took to purchase an item, which channel spurred their visit to your site and what engagement techniques were successful.
Unfortunately, too many businesses have these data points scattered across different databases, systems, platforms and tools that don’t necessarily communicate with each other – meaning that all that juicy data is siloed and underutilized.
Bringing all your customer datasets under one roof can help your business get an accurate picture of a customer’s journey and help you spot touchpoints where your sales and marketing teams can improve performance and ROI.
The nuts and bolts of the customer data unification process
1. First, unify all of your data
A successful customer unification process begins with gathering your data in one place. It’s not uncommon for businesses to use several different tools to store siloed datasets, so unifying them can be time consuming. Google’s Sean Downey recommends connecting your web and app analytics tools to a Customer Relationship Management (CRM) technology to kick the process off.
Then think about all the other ways people engage with your business – email campaigns, billing systems, loyalty programs. Next, look into relevant external data, such as the strong audience signals you can get from search intent or videos viewed.
Vice President, Americas Platforms at Google
Once the data is all in one place, it’s a lot easier to gain insights into customers like:
- Personal information: Customer name, age, phone number, email address, preferred shipping address
- Behavioral predictions: How long customers take to buy, what products they are looking for and what marketing strategies they’re most influenced by
- Buying journey: How a customer entered your marketing funnel and what path they took to get to the checkout
- Transactional: Lifetime value of each customer, average spend, % of customers who purchase cross-sell or upsell products
Unifying data and gaining these important insights will give a business a deeper understanding of its customers and what it’s doing right and wrong.
2. Next, create customer IDs
The next step in the process is to check that each customer’s data is accurate.
This process gathers every data point you’ve collected for each customer, from their names to buying habits. These customers are then assigned a permanent customer ID to ensure data accuracy and eliminate duplicate data points.
Depending on their acquisition channel, you may have many different data points for each customer. Using different emails, phone numbers or addresses during transactions isn’t unusual:
Creating customer IDs can unify these data points and tie them to a single customer. Manually doing this would be impossible, so a lot of businesses will invest in a Customer Data Platform (CDP) to unify datasets accurately.
A CDP does this using:
- Probabilistic matching: Using AI to estimate if data belongs to a customer using matching methods like browser type and IP addresses
- Deterministic matching: Unifying simple data points on existing records like names, emails, phone numbers and addresses
Once the process is complete, you’ll have a clean dataset to use with accurate information on current and past customers.
3. Finally, invest in the right tools to make data actionable
Unified datasets can be a treasure trove of information, giving you insights into customer behavior, buying habits, average spending and even overall experience with your brand. You can use these data points to create targeted advertising and marketing campaigns to turn customers into lifelong fans or to attract new customers.
Just ask Footasylum. The leading UK footwear and streetwear retailer spent years collecting data on its customers.
By initially embracing data unification, Footasylum maximized the value of this data and improved various aspects of its business. Taking it a step further, by leveraging this data with Decision Intelligence (the commercial application of AI to decision making), Peak unified Footasylum’s data to give the company a predictive view of its customers.
AI and machine learning-powered algorithms now draw insights based on the past transactional and behavior data of every Footasylum customer.
These insights give the company an accurate view of its online and brick-and-mortar customers so it can create more targeted advertisements that speak directly to their interests. A bespoke algorithm also takes customer data and creates intelligence models, giving Footasylum information on everything from in-market predictions to consumer brand and style preferences and a recommendation engine.
The results speak for themselves.
Since Footasylum unified its customer data and added this layer of Decision Intelligence, it saw a 28% uplift in revenue per email sent. The company’s return on ad spend (ROAS) has also skyrocketed to levels as high as 8400% – roughly 30x higher than the industry standard.
Data unification helps you (truly) understand your customers
How well do you really know your customers?
The problem for most businesses isn’t collecting data – it’s how that data is stored and used. It’s usually scattered around in different tools, leading to siloed and fragmented information that offers limited insights into customers and their needs.
Unifying this data and unlocking it can help you get the right answers. Businesses can truly understand what customers want, how they buy and how to target them with more engaging marketing and advertising campaigns.
With customer data unification, you can do just that.