Guide for Personalized Omnichannel Communication

With CDPs (Customer Data Platforms) challenging traditional marketing automation platforms, interest in omnichannel personalization has skyrocketed. Although there is a lot of focus on this topic, not many people truly understand what it entails or how to effectively leverage it to create business value and customer experiences. This guide aims to clarify the concept and provide guidance in this area.

Business challenges driving omnichannel personalization

There are several business challenges that drive the need for omnichannel personalization. This includes reaching customers at different stages of the customer journey and at various touchpoints. Lack of relevance and data utilization across multiple channels. Inability to act in real-time and respond to customer behavior. Scalability and efficiency when using a mix of platforms.

CDPs bring new opportunities

Omnichannel personalization is more than just communicating with customers across multiple channels. It also involves:

Leveraging data from relevant channels, touchpoints, and platforms to trigger and personalize customer interactions.

Profiling customers and triggering interactions based on their behavior, intent, and predictive models, resulting in personalized communication across all relevant channels.

Dynamic multi-step campaigns involving several channels, where responses in one channel impact the next steps in communication in other channels.

Measurement and reporting that considers all interactions with customers across all channels to accurately assess the impact of specific interactions and the overall effect of communication.

Achieving omnichannel personalization with a CDP

The rapid evolution of new martech offers us many new opportunities. It is important to understand what these opportunities are and how to use them. When choosing a CDP for your organization, ensure you select a platform that supports your key requirements. In the implementation phase, we recommend a step-by-step approach to quickly create value for your business.

A deep dive into business challenges

Most organizations communicate with their customers through various channels, but each channel is usually treated as a separate entity. Additionally, personalization, if it exists, is based on limited data from each channel. Customer data is scattered across multiple platforms and is not linked in a unified view.

Many organizations struggle with targeted and data-driven customer communication. In fact, many campaigns have limited impact, and non-personalized and segmented email campaigns typically have a conversion rate of 0.5-2%, with a real uplift of less than 1% and sometimes close to zero.

Reach is another challenge for many organizations. The lack of a unified customer view and the inability to tailor communication across channels limits the number of customers that can be reached. To compensate for low email open rates, organizations must be able to reach identified customers via web, mobile app, POS, customer service, and paid media.

Creating a relevant customer experience is also a challenge for many organizations. Without a consolidated customer view and the ability to tailor communication across channels, interactions with customers will inevitably lack relevance. Without cross-functional collaboration between teams for each channel, it is almost impossible to create a unified experience across channels.

We often see that the lack of real-time capabilities is another challenge

The ability to respond to customer behavior and initiate communication within hours or minutes is crucial and leads to 5-10 times higher results compared to traditional campaigns. However, many MA platforms lack real-time capabilities, such as using data from one channel or touchpoint to trigger communication in the same or other channels.

Companies often struggle with efficiency in setting up and managing campaigns. A heavy focus on manual calendar-based communication results in significant resource usage for campaign creation, with most of the work becoming a cost after the campaign has ended. By shifting the focus to trigger-based campaigns, the efforts made to create new interactions will have long-lasting value.

Managing campaigns in separate platforms also leads to extra work and time-consuming efforts

By consolidating more of this work into one platform, time can be saved.

It is also a challenge to measure effects across different channels. When communicating with the same customers across multiple channels simultaneously, it is impossible to measure results in silos. Interactions in one channel inevitably affect results in other channels. By orchestrating communication from one platform and having all campaign data in the same platform, it becomes easier to measure the impact.

Recent technological advancements have created new opportunities for omnichannel personalization that were previously unavailable.

New business-driven platforms like CDPs have changed the playing field through faster implementation and by putting personalization capabilities in the hands of business users with less involvement from IT and BI teams. CDPs are also equipped with built-in analytics models and cost less than traditional MA platforms.

Personalization tools for websites and mobile apps have also evolved, offering improved personalization, A/B testing, and measurement and reporting capabilities.

The event-based IT architecture has enabled real-time actions based on customer intents and behavior in different channels. This type of architecture updates customer data in real time and triggers communication immediately after a transaction, instead of waiting for a batch update.

Additionally, a cross-functional and agile work approach has emerged, supporting collaboration between different teams and channels. Teams are assembled to cover key customer interaction contexts, including different phases of the customer journey or lifecycle. Each team consists of employees with expertise in their respective channels and resources for analysis, content, and business development. The teams are responsible for key KPIs for all channels and touchpoints.

Together, these advancements enable business users to take control of omnichannel personalization with less reliance on IT.

Key elements in omnichannel personalization

Omnichannel personalization has become a popular topic, but it is important to have a clear understanding of what it means.

Everything begins with data

The foundation of omnichannel personalization is data. It's about collecting all relevant information from different touchpoints and connecting it to create a comprehensive 360-view of the customer. Using this information makes it possible to create personalized communication based on the customer's behavior and needs.

Moreover, personalization must occur across all channels, including email, SMS, websites, mobile apps, store/POS, call centers, and paid media. This allows for new types of communication across various channels, rather than being limited to just one or two. For instance, personalized calendar campaigns and lifecycle campaigns, traditionally only possible via email and SMS, can now be run on websites, mobile apps, and paid media. In web and mobile apps, personalized calendar campaigns, customer lifecycle dialogues, personalized engagement campaigns, and proactive service campaigns can be run for identified customers. Personalized campaigns can also be run in paid media, not only using third-party data but also by acting on visitors' behavior on the web and in the app.

The POS channel can also be used for targeted and personalized communication, where associates can tailor the customer experience through personalized recommendations, discounts, lifecycle activities, and engagement dialogues.

All types of customer dialogues in all channels

Previously, personalized campaigns like calendar campaigns, customer lifecycle campaigns, and personalized engagement campaigns were limited to email and SMS. But with available data and the ability to reach audiences across multiple channels, these types of campaigns can now also be conducted on websites, in mobile apps, and in paid media. The ability to act on customers' behavior and intentions on the web or in the app also presents new opportunities for email and SMS campaigns.

For customers identified via the web and mobile app, personalized calendar campaigns, customer lifecycle dialogues (e.g., onboarding), personalized engagement campaigns (e.g., promoting loyalty program usage), and proactive service campaigns can be conducted.

In paid media, personalized calendar campaigns, customer lifecycle campaigns, and campaigns reacting to visitors' behavior on the web and app can be conducted, rather than relying only on campaigns based on third-party data from external platforms.

The POS channel offers a new opportunity for targeted and personalized communication. By delivering targeted offers and groups to the POS terminal, the associate can use the information to provide a personalized experience, including personal recommendations, discounts, lifecycle activities (e.g., onboarding), and personalized engagement dialogues (e.g., updating contact information or promoting opt-in).

Transition from calendar campaigns to trigger-based always-on campaigns

The conventional approach to data-driven communication heavily relies on manual calendar campaigns, presenting a significant challenge. Much resources and cost are allocated to one-time communications that hold no value after the campaign is over. By using trigger-based always-on dialogues, investments in campaigns can drive revenue over a longer period. These campaigns use various triggers, such as behavioral triggers, act-on-intent triggers, and predictive triggers. Behavioral triggers are changes in shopping patterns, like changed purchase frequency, new types of product purchases, or visits to new stores.

Dialogues triggered by intent are typically the most effective type of campaigns. Our experience shows that communication triggered by intent (act-on-intent) regularly has 5-10 times higher effect. These campaigns are triggered when a customer has shown intent on the website or app to buy something or engage with the brand. You can respond in real-time and personalize the interaction in the digital channel and follow up in other channels such as email and paid media. Sometimes this type of campaign is referred to as channel-triggered campaigns.

Predictive triggers are based on predictive models estimating future customer behavior. The most well-known are models predicting churn. A lost customer is nearly impossible to win back. The idea is to take action before the customer is lost.

For most companies, calendar campaigns will still be a part of data-driven communication in the future. However, the number of campaigns can be reduced to save time and resources and create a better customer experience.

Technical capabilities required for omnichannel personalization

Enabling omnichannel personalization requires several key technical capabilities. This includes being able to collect data from various channels and systems, including customer and business data. Business data can encompass product information, store locations, and content data, while customer data can cover transactional data, web and mobile app clickstream data, and customer care data. GDPR compliance is critical when importing customer data into a new platform, so a legal analysis and risk assessment must be conducted beforehand.

Data management capabilities are also needed to cleanse and transform data to support personalization. For example, it is possible to create aggregated data points like the number of transactions in the last 30 days.

Another key feature is profile unification or creating a single customer profile. Often, customers have multiple identities in a database, such as loyalty program membership, online purchase identity, log-in ID for web and mobile apps, and newsletter subscriptions. To get a complete picture of each customer, these identities need to be merged through identity resolution. This process merges identities with the same email address or name and phone number.

Additionally, analytical capabilities for customer profiling are necessary to describe customers' preferences and behaviors, such as customer DNA, segmentation, predictive models, and customer lifetime value. This allows companies to analyze the customer base and support activation and personalization.

The activation phase follows immediately. To enable personalization, target audiences are created based on various types of data, such as analytical models and business rules, and different triggers can be used, such as calendar, lifecycle, behavior, intent, and predictive triggers.

Even if two customers receive the same campaign, communication must be personal. This involves using different analytical models, such as business rules, segmentation, and predictive models, to determine what personal experience to offer each customer. This may involve offers, content, and product recommendations.

The positive effects of omnichannel personalization can be seen when a customer dialogue uses multiple channels. The ability to orchestrate these multi-step dialogues across channels is essential, as is the ability to be responsive in these dialogues based on how the customer reacts to communication in one step.

Finally, it's important to look at the data and conduct an analysis to estimate the results of specific campaigns and the overall impact of the programs.

Business case for omnichannel personalization

The business case for omnichannel personalization can be summarized in three key parts. The first is increasing the number of relevant interactions. By reaching customers through multiple channels and touchpoints, more personalized and data-driven interactions can be created, leading to increased uplift, loyalty, and reduced churn. The second part is increasing uplift. By leveraging more data and improving relevance, each interaction's impact increases. The third part is reducing campaign management costs. More automation and trigger-based always-on campaigns can help lower costs, while more channels can be managed in one platform if a CDP is used.

How to get started

Here are some key recommendations for how to work with omnichannel personalization:

• Define your goals and key strategies. Identify the main goals for your organization, such as increasing cross-sell opportunities, reducing customer churn, improving customer experience in key contexts, or enhancing collaboration between channel teams. This will help guide the team throughout the project.

• Define the capabilities you need. Selecting the right platforms to support your omnichannel personalization journey is crucial. When choosing a customer data platform (CDP), it is important to understand the different features and integrations available. Avoid selecting a CDP solely based on recommendations and demos, as this can lead to a dead end.

• Map the capabilities against your IT architecture and identify potential gaps. You need more than just a CDP to support omnichannel personalization, so it's important to evaluate your current IT architecture and identify any gaps.

• Define a business case. To get approval for a major project, a business case is usually required. Use a bottom-up approach to estimate the number of interactions with customers across channels and touchpoints and calculate the conversion increase for each interaction.

• Create a holistic timeline. Your timeline should include all the deliverables required to achieve the desired future state, such as resources, competencies, and new processes. Do not solely make it an IT project without capable functions to utilize it.

• Continuous optimization. Do not assume that no further adjustments or improvements are needed once the project is completed. You should have a foundation to build on and a budget and resources allocated for continuous optimization.

• Cross-functional collaboration is key. No matter how you manage data, analytics, and IT platforms, a cross-functional approach is crucial for success.

Success factors for omnichannel personalization

• Engage key stakeholders in your organization and educate them on the concept of omnichannel. It can be challenging to gain support from those who may not fully understand the concept.

• Maintain a business-driven focus and ensure that the overarching business goals steer the project. Don't get bogged down in details and make sure to measure results and deliver value early on.

• Avoid treating the project as a pure technology initiative. Data integrations and IT platforms are important, but success largely depends on business capabilities, processes, and cross-functional collaboration.

• Conduct thorough research before selecting a CDP or other platforms. If you don't define your requirements before engaging with potential vendors, you may end up with a platform that doesn't meet your needs.

• Consider a step-by-step approach instead of a "big bang" implementation. It can be difficult to know what is the best solution for your organization before you get started, so beginning with easily implemented use cases and high-value features and then adjusting the strategy based on insights is often the most effective approach.

A CDP offers many new opportunities for your omnichannel strategy. With this technology, you can conduct almost any type of customer dialogue across all channels. For this to succeed, key people in your organization must understand the opportunities a CDP presents.

When choosing a CDP, you must do your homework. There are many differences between CDPs, and there is no one-size-fits-all. Make sure you have specified your requirements before meeting vendors. Unfortunately, many companies realize that the CPD they just procured doesn't support the key business requirements during implementation.

Treat the omnichannel implementation as a business project, not an IT project. Setting up martech is just a small part of the work that needs to be done. Ensure the business is on board and that the working methods are adapted to support the omni strategy.

When implementing your new use cases, we strongly recommend you take it step-by-step. Learn more about this in our white paper Scale up your CDP work.