As e-commerce owners, we all have different goals we want to achieve to take our business to the next level. However, the basis of these goals is same: we all want to increase our revenue and grow our business. The key to higher conversion rates and increased revenue is creating effective marketing strategies that increase brand loyalty and boost sales. This is why it’s essential to have a deep understanding of our audience. But in today’s competitive conditions where customers become more demanding, one of the biggest challenges businesses encounters is understanding what motivates their customers to act or buy.
That’s where a customer data platform (CDP) can help. With CDPs you can gain real-time info of your customer and leverage that information to create more personalized experiences.
What is Customer Data Platform (CDP)?
Before we discuss different ways to leverage CDP for revenue growth, let’s first quickly remember what CDP is.
Basically, CDP (Customer Data Platform) is a software that gathers and combines customer data from multiple sources to build a rich and comprehensive customer profile. These profiles are created by collecting data from multiple touchpoints such as your CRM platform, website, email lists, social media, or lead generation forms. This unified data can include basic information about your customer (demographic information, age, gender, etc.), how a customer engages with your brand (website visits, social media post interactions, e-mail open rate, etc.) and customer behavior (purchase history, subscription renewals or deactivations, user logins, etc.). Customer profiles then can be used for personalized marketing campaigns, customer segmentation, customer service and support, customer journey optimization, data analysis and insights and so much more.
Creating a comprehensive customer profile by collecting and unifying data is essential, but it’s only one step in the process; you also need to know how to act on your customer data to boost your bottom line.
3 Ways to Increase Revenue with Your Customer Data Platform
Using a Customer Data Platform (CDP) for content-driven revenue growth involves leveraging customer insights to create personalized, engaging, and valuable content.
Here are three ways to leverage your Customer Data Platform (CDP) for revenue growth:
- Personalizing the customer experience: Here is a fact:more than 77% of people choose, recommend, and pay more for brands that provide personalized experiences tailored to their interests. Using CDP, you can make your communication with customers more personal.
By now, we know that we can learn so much about our customers with CDP: from age to gender, where they live, to the last product they bought. This comprehensive customer data stored in our CDP can be used (and should be used) to create hyper-personalized experiences.
You can create personalized marketing messages, product recommendations, and offers based on individual preferences, past interactions, and behavior of your customers. Tailoring messages and offers to specific segments based on their behavior and preferences can significantly increase conversion rates and sales. In fact, McKinsey reports that personalization can lift revenues by 5–15% and increase the efficiency of marketing spend by 10–30%.
For example, you can send e-mails to your customers informing them about the products they bought from your web site before now on sale. You can also suggest similar products based on their latest search or shopping.
- Identifying cross-sell and upsell opportunities: Apart from customer retention, a CDP allows you to discover cross-sell or upsell opportunities among your current clients. (Cross-selling means encouraging customers to purchase additional, related products. Upselling means to get customers to buy a more expensive or upgraded version of a product or service they’re already intent on purchasing.) To excel at upselling and cross-selling, understanding customer purchase patterns and behavior is crucial – you should forecast what products a customer is most likely to purchase from you next.
With information about products or services purchased in the past, the timing of previous purchases, communication preferences and loyalty status, you can forecast what the customer may need next. You can identify opportunities for upselling or cross-selling by understanding what additional products or services customers might be interested in based on their behavior patterns. Rather than recommending the same product to every customer, recommending right complementary products or services to customers at the right time can boost revenue.
- Optimizing customer journeys: If our goal is to attract more customers to our business, we must first understand which interactions and channels encourage them to convert into paying customers.CDP allows you to track a customer’s entire journey – from when they first discovered your business to when they made a purchase – and assemble every interaction a prospect has had with your business even before they made any purchase.
By leveraging a CDP, you can comprehensively track customer journeys and identify high-converting channels. That means you can learn which channels drive the most conversions for your company (and which don’t), identify areas where customers drop off in the sales funnel and implement strategies to address this issue. This way you have the ability to focus your resources on the strategies that drive the best results instead of the ones that don’t.
With CDP, you can streamline the buying process and ensure a seamless customer experience to increase conversion rates. CDPs also assist in nurturing existing customers by optimizing post-purchase experiences. You can enhance your retention strategies and turn satisfied customers into advocates by providing personalized experiences that specifically meet their needs and preferences.