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OMR Masterclass 2019 – I Got 99 Problems But My CDP Ain't One


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OMR Masterclass video:

The platform economy has massively shaken up marketing. For decades, the unattractive procedural costs behind switching between brands have kept customers loyal: the costs of researching, evaluating, searching for and implementing a product from a new brand has kept customers coming back to an old one that they know that they can trust. The platform economy has taken a hammer to procedural switching costs: products and brands can be researched at the click of a button, customer reviews minimize economic risk, instant information has replaced needing to speak to an employee. The problems pile up as customers’ loyalty diminishes. Brands are left having to put a lot more focus on their active brand-customer relationship, but that’s a lot easier in theory than it is in practice.

Marketers need to think outside the box and create opportunities to connect with customers at times and places that haven’t been traditionally utilized. Dr. Markus Wuebben shows in his OMR Masterclass, I Got 99 Problems but my CDP Ain’t One, that when trying to connect with customers in new, innovative ways, the data requirements come thick and fast. We’re left feeling that we have 99 problems.

Wuebben explains in his OMR Masterclass talk that CDP technology cuts through our problems and gives marketers unparalleled opportunities for connection and relationship maintenance. The CRM and marketing landscape has changed rapidly: It’s fortunate that, thanks to CDPs, the ability for marketers to rapidly adapt and change along with it has arrived with perfect timing – just like a perfectly timed CDP-enabled notification.

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OMR Masterclass 2019 – I Got 99 Problems But My CDP Ain't One

  1. 1. I Got 99 Problems but My CDP Ain't One. 2019 Masterclass
  2. 2. Customer Data & Engagement Platform ● Founders: Manuel Hinz and Dr. Markus Wübben ● One of the first European suppliers ● Gartner: “Cool Vendor in Multichannel Marketing”
  3. 3. Please check out the video and carefully observe the cases.
  4. 4. Simple cases! Simple cases?
  5. 5. Let's model these cases...
  6. 6. A last-minute gift Data & Processing Requirements Lea
  7. 7. 1. The user searches for a product
  8. 8. 2. Record the SKU
  9. 9. 3. Get permission to retrieve the location data
  10. 10. 4. Retrieve the location data
  11. 11. 5. Decode the geo-location
  12. 12. 6. Locate nearby shops
  13. 13. 7. Check if the SKU is available
  14. 14. 8. Retrieve a list of shop IDs that have the SKU in stock
  15. 15. 9. Retrieve those shops’ geo-locations
  16. 16. 10. Place the shop locations on the map
  17. 17. 11. Match the user’s cookie with CRM data to retrieve the PII
  18. 18. 12. Trigger a personalized message Hi Lea, 11 nearby shops stock this item! 🎁 🎁 Here are their locations:
  19. 19. Required data ● Geo-data ● PII (Customer Record) ● Cookie & PII matching ● Shop location ● Shop inventory
  20. 20. Need a ride? Data & Processing Requirements Jeffrey
  21. 21. 1. Set up a geo-fence for the city (including dwell time) BERLIN
  22. 22. 2. Set up a geo-fence for the Station BERLIN Central Station
  23. 23. BERLIN Central Station 3. The user enters the city geo-fence 14:20 Entered Geo-Fence
  24. 24. BERLIN 4. Check if a) The dwell time has been exceeded b) The user has re-entered the station Central Station 14:20 Entered Geo-Fence 14:50 Entered the Station
  25. 25. BERLIN 5. Check if a) The user is a car-sharing customer b) Push notifications are enabled c) A car is available User
  26. 26. BERLIN 6. Retrieve the Pll for personalization User Data
  27. 27. BERLIN 7. Check the user’s contact history User
  28. 28. BERLIN 8. Trigger a personalized message User
  29. 29. BERLIN 9. Update their user profile with: a) The contact history b) Their reaction User
  30. 30. Required data ● Geo-data ● PII (Customer Record) ● Contact permissions ● Car-sharing provider's car inventory data ● Campaign and template data ● Contact history
  31. 31. If you want to create highly engaging campaigns you have 99 problems Real-time / near real-time Relationships between data entities Triggers Changing data points !
  32. 32. What are marketers' tech options for solving these “99 problems”?
  33. 33. Overview of Marketing Tech Stacks in 2019 (Presumed) Degree of Integration Limited Piecemeal Fragmented Best-of-Breed Integrated Best-of-Breed Single Vendor Marketing Suite Proprietary MarTech Stack 9% (2017: 21%) 8% (2017: 21%) 34% (2017: 27%) 27% (2017: 21%) 5% (2017: 4%) 51% WITH MULTI-VENDOR APPROACH Source: Walker Sands State of Marketing Technology 2019 (missing 17% = “non-existent”) low high Option 1Option 2Option 3
  34. 34. DEFINITION “A marketing technology stack consisting of solutions for every task that has been developed, internally or through an agency, to be fully tailored for a particular company’s needs.” • Solutions can be fully tailored for the company • Full control • Very resource-intensive: A multi-million euro budget and a qualified in-house team is necessary • Time consuming! Option 1: “Proprietary MarTech Stack” “Proprietary” PROS CONS
  35. 35. • Campaign management (basic) • Advanced analysis functionality • Digital marketing capabilities incl. Ad Mgt., Content Mgt., Mobile & Social Media Mkt., Display & Email-Mkt. Examples SOURCE: Gartner Magic Quadrant for Multichannel Campaign Management, 14 April 2016 DEFINITION Integrated solutions “that seek to orchestrate company communications and marketing offers with customer segments across channels such as websites, mobile, social, direct mail, call centers and email.” Option 2: “Single Vendor Marketing Suite”
  36. 36. A fully integrated platform! A fully integrated platform is as mythical as a Himalayan Yeti. RSG MARKETPLACE ANALYSIS 2015 CC BY 2.0 Robert Couse-Baker - Yetti on a bench
  37. 37. Integrated? Enterprise Marketing Management Solutions The Oracle Customer Experience Cloud
  38. 38. SOURCE: Gartner Magic Quadrant for Multichannel Campaign Management, 14 April 2016 Option 2: “Single Vendor Marketing Suite” • The team only needs to work with one tool to create, execute and analyze campaigns • Single point-of-contact for support services • Marketing trends are slowly adapted • A single vendor is unable to provide the best tool for every task (no best-of-breed tools) • Difficult implementation (old tool migration etc!) • Provider “lock-in” • Costly consulting + support structure “Single Vendor Marketing Suite” PROS CONS
  39. 39. SOURCE: Gartner Magic Quadrant for Multichannel Campaign Management, 14 April 2016 Option 3: “Integrated Best-of-Breed” • No provider “lock-in” – free choice of tools • Best-of-Breed tools can be used → competitive advantage • Offers the possibility of quick adaptation (Martec’s Law) • Very cost-efficient • No Single-Point-of-Contact → increased effort for communication • Many tools need to be connected → complexity “Integrated Best-of-Breed” PROS CONS
  40. 40. Hype Cycle Gartner Hype Cycle for Digital Marketing and Advertising, 2018 Expectations Time Peak of inflated Expect- ations Innovation Trigger Thought of Disillusionment Slope of Enlightenment Plateau of Productivity Customer Data Platforms Data Management Platforms
  41. 41. But what exactly is a CDP?
  42. 42. Standardized software (mostly a SaaS solution) → Faster, less risk, lower costs Compiles user data from all available sources and stores forever (legal boundaries need to be respected) → A complete customer view A CDP’s Properties Packaged Software Persistent & Unified Shares data with other systems → An open system that enables best-of-breed approaches Accessible
  43. 43. DataIntegration Real-Time (Drip) Campaign Management Customer $ 360° Customer Profiles Real-Time 1:1 & Audience Segmentation User Behaviour Engagement Product Transaction Devices E-mail Push Messages Social Media Direct Mail Website ChannelIntegration Data Channels Customer Data & Engagement Platform
  44. 44. CDP Use Cases
  45. 45. Audience Campaign: Travel Turnover Subscription Bookings Customers with >1,000€ turnover/year Customers with >50 trips/year Customers with bonus cards Holiday offer for premium customers Premium customers
  46. 46. Real-Time Campaign: Travel 1st class upgrades on crowded trains Trigger Condition Message Crowded train; travel distance >500km Premium customer; app user Free 1st class upgrade
  47. 47. A combination of audience and real-time campaigns Multi-Stage Multi-Channel Campaigns Condition Mobile Push Upgrade for current journey Postal Trigger Heavy workload; Travel distance: >500km Premium client (App user) Voucher for next journey(Non-App user)
  48. 48. Stories
  49. 49. How is a CDP different to a DMP? CDP vs. DMP
  50. 50. Layers of Differentiation DATA DECISION DELIVERY
  51. 51. DMP vs. CDP | DATA ● Utilizes all types of user/customer data ● Both anonymous and identified user profiles ● Privacy: Mostly hard opt-in ● Focuses on web behavior data ● Mostly cookie-based = anonymous user profiles ● Privacy: Either a soft opt-in or none at all DMP CDP
  52. 52. DMP vs. CDP | Decision ● Segments are created based on user attributes and all behavioral data ● Behavioral data segmentation is based on raw data ● Additional real-time segmentation on (multi-level) event data ● Segments are created based on anonymous user attributes and web behavior ● Web behavior, often in the form of aggregated data, is also as a user attribute DMP CDP
  53. 53. DMP vs. CDP | Delivery ● Segment transmission as well as trigger-based 1:1 communication (multi-level and with multiple channel combinations) ● Wide coverage of channels with 1:1 capability (email, messenger, onsite, print, etc.) ● Regular segment transfer ● Strong focus on the Programmatic Display ecosystem (DSPs, etc.) DMP CDP
  54. 54. ● DMPs and CDPs have different application areas ● They’re frequently used in separation from each other ● But one can benefit from the other → Linking CDPs & DMPs
  55. 55. Combining CDP & DMP functionality yields nice use cases
  56. 56. Case: Addressing users who have attended a OMR event in the past via programmatic display to promote the new OMR podcast. Use Case 1: (Re)Targeting Existing Customers Cookie-Matching Audience: visitor DMPCDP PODCASTPODCAST Audience: visitor
  57. 57. Cookie-Matching Case: Excluding customers from prospecting campaigns by transferring customer segments from the CDP to the DMP. Use Case 2: Customer Exclusion Whilst Prospecting Audience: Customers PODCASTPODCAST DMPCDP Audience: Customers
  58. 58. Cookie-Matching Case: Transferring (selected) customer segments to generate look-alike audiences in the DMP for new customer acquisition via programmatic display. Use Case 3: Look-Alikes in Customer Segments Audience: Premium customers Look-Alike audience PODCASTPODCAST DMPCDP Audience: Premium customers
  59. 59. Use Case 4: Cross-Channel-Campaigns Data Decision Delivery 360° customer profiles Smart segmentation & automated user journeys Real-time cross-channel campaigns DMP
  60. 60. Create Your Own Story Use Case 4: Cross-Channel-Campaigns Condition Print Reaction Display Trigger Customer becomes inactive >1,000€ turnover or user has made >20 purchases in the past User reacts to the campaign
  61. 61. CDP ≠ CDP
  62. 62. CDP Institute: The RealCDP Project ● Ingest data from any source. ● Capture ingested data in full detail. ● Store ingested data indefinitely. ● Create unified profiles of identified individuals. ● Share data with any system that needs it.
  63. 63. Data CDPs vs Engagement CDPs Focus on data ● Pre-packaged standardized connectors to many data sourcing systems (Salesforce, Google, AdTech, Shop-Systems, etc.) ● Focus on data aggregation, cleansing, “golden customer record” ● Usually transfer segments only to 3rd party systems ● Pre-packaged standard connectors to delivery systems (ESPs, Push Providers, Call-Center Software, etc.) ● Focus on data activation into delivery systems (campaigns, real-time data transfer) and other systems (voucher system etc.) ● Sophisticated campaign management: 1:1 real-time and audience campaigns ● Some: Product/content recommendation features Focus on engagement
  64. 64. The 100th Problem: Merging Retention & Acquisition
  66. 66. HBR: “Zero defections, quality comes to service” (1990) Journal of Marketing Research: “Valuing Customers” (2004) Frederick F. Reichheld W. Earl Sasser Donald R. Lehmann Sunil Gupta
  67. 67. Probability of making a sale is higher for existing customers These heroes gave empirical evidence that retention is a good thing Increasing retention highly increases profitability Keeping a customer costs 5 times less than acquiring a customer Existing customers are more likely to try new products and spend more money 5% Customer retention 25-95% Profit 60-70% Existing customers 5-20% New customers 50% Try a new product 31% Spend more money
  68. 68. So What Drives Customer Retention?
  69. 69. Switching Costs are the most practically relevant driver for retention ● Economic risk costs ● Evaluation costs ● Setup costs ● Search costs ● Learning costs ● Benefit loss costs ● Monetary loss costs Procedural switching costs ● Personal relationship loss costs ● Brand relationship loss costs Financial switching costs Relational switching costs
  70. 70. When switching costs decrease, retention becomes re-acquisition Retention = (Re-)AcquisitionRetention ≠ (Re-)Acquisition Switching Cost
  71. 71. The influence of the platform economy on switching costs
  72. 72. Platforms have eliminated procedural switching costs to a large extent ● Economic risk costs ● Evaluation costs ● Setup costs ● Search costs ● Learning costs ● Benefit loss costs ● Monetary loss costs Procedural switching costs ● Personal relationship loss costs ● Brand relationship loss costs Financial switching costs Relational switching costs Eliminated for all by platforms (Google, PC, Amazon etc.) Mainly applicable in subscription businesses & business with rewards (e.g. loyalty programs) For the “rest of us”
  73. 73. Reduced switching costs lead to a new consumer decision process Consideration Set & Evaluation Initial Consideration Set Moment of Purchase Trigger (Post) Purchase
  74. 74. The less a business is able to create switching costs, the more retention becomes re-acquisition.
  75. 75. Take a look at the challenges & opportunities of customer acquisition and at how CRM can facilitate re-acquisition.
  76. 76. Programmatic Advertising: A Paradigm Shift? The Environment Buyer’s Black Box Buyers Responses • Buying attitudes & preferences • Purchase behavior • Brand & company relationship behavior Source: Kotler 2016: Principles of Marketing Marketing stimuli • Place • Promotion • Product • Price • Buyer’s characteristics • Buyer’s decision process
  77. 77. How Do We Target the Black Box?
  78. 78. A Semantic Approach to Acquisition
  79. 79. Upper funnel data serves as a proxy for consumer intent. Lower funnel (CRM) data puts intent into context.
  80. 80. Latest Trends: AMP for Email ● Yahoo Mail,, Outlook, Gmail will support this ● Based on AMP project (accelerated mobile pages)
  81. 81. It's a Match! Customer Acquisition Customer Retention
  82. 82. Key Takeaways Simple use cases are not as simple as you expect them to be. 1. CDPs enable advanced customer engagement. 2. Merge acquisition and retention. 3.
  83. 83. I Got 99 Problems but My CDP Ain't One. 2019 Masterclass @crossengage @markuswuebben