With customer acquisition getting harder, it’s no wonder brands are excited about any technologies that promise to engage new customers. But Tate Olinghouse, chief revenue officer at Acxiom, believes brands first need a foundation of customer intelligence to get the most out of those applications. He shares five steps to getting that foundation right.
I often talk about the myth of the shiny object. It’s where brands invest in the latest hyped-up marketing technology in the hope that it will solve all their problems, only to be disappointed by the results.
Nowhere is this phenomenon more obvious than in customer acquisition. All brands need new customers to thrive and grow. But in crowded markets, where customers are increasingly discerning about how they spend their hard-earned cash, acquisition is no easy task. According to our latest CX trends report, the majority of businesses (61%) are finding that customer acquisition has become more competitive in the last 12-18 months.
With acquisition getting tougher, it’s no wonder brands are jumping at whatever technology promises to win them new customers. And, in a rapidly expanding martech market, where growth is being accelerated by AI and the cloud, there are lots of solutions making those promises.
But there are no silver bullets, and technology alone won’t advance acquisition. That’s not to say those AI-driven applications aren’t exciting – many of them are highly effective at engaging and converting new customers and can deliver incredible value. But to do that, they need the right fuel to maximize their performance.
So what’s the real secret to acquiring new customers? It’s to truly understand your existing customer base – then find and engage prospects that resemble your most valuable customers. And to do this you need to fuel those shiny new martech tools with a robust foundation of customer intelligence.
Here are five steps to customer intelligence-fueled customer acquisition.
1. Bring together your customer data
As the marketing industry moves away from device-based identifiers like third-party cookies towards a person-based approach to marketing identity, first-party data is becoming the new currency. First-party data is simply the information you collect directly from your customers when they interact with you across a variety of channels – from your website, mobile app, or loyalty program to customer service, social channels, and paid advertising.
As privacy regulations evolve, this information often has permissions attached so you know how the customer wants you to use their data. Finding out which teams and systems across your organization have this data, and centralizing it using a customer data platform (CDP), is the first step in building customer intelligence.
2. Apply person-based identity
Using the first-party data you’ve unified in step one, you can use identity resolution to build a first-party identity graph that is unique to your brand. Identity resolution means linking together any data signals or identifiers that relate to an individual customer.
If you think of all the bits of data you have about a prospect or customer as keys, then your identity graph has a keyring for each individual, and it holds all those keys together. A first-party graph is essential for gaining a true view of your customer base and finding out who your most valuable customers are.
3. Consider brand partnerships
Many brands are choosing to expand their customer understanding through data collaborations with trusted brand partners. This could be a real estate broker sharing data with a financial services company, or a travel & entertainment company sharing data with a retailer.
By using data clean room technologies to share insights in a safe environment, without revealing personally identifiable information (PII), brands can gain a deeper understanding of their customers in the area where the two datasets overlap. Brands can also find new prospects within their brand partner’s data (which is known as second-party data) that look like their own best customers.
These second-party partnerships are currently relatively limited but, with the expected growth of the ecosystem economy, brands are likely to be entering into multi-brand, cross-industry, data-driven partnerships in the near future.
4. Gain a third-party perspective
First-party data only gives a narrow view of the customer, based on the limited data shared during direct interactions. To enrich this information and gain a broader, more holistic view of the customer, you’ll need high-quality, ethically sourced third-party data insights. You can discover the types of hobbies and interests your customers have, what causes they’re likely to care about, what media formats they tend to consume, and what channels they prefer to use for brand interactions.
These insights will help you deliver relevant customer experiences. They will also help you keep your first-party data accurate and current. But perhaps most importantly from an acquisition perspective, they will allow you to understand what characteristics your most valuable customers share, and build lookalike audiences.
5. Build lookalike audiences
Once you have a solid foundation of customer intelligence – consisting of different data types linked together at the person level – you can start to build lookalike audiences. These will be groups of real people that share important attributes with your most valuable customers.
Instead of building prospecting audiences based purely on basic demographic factors like age, gender, and economic status, you can create them based on more nuanced and meaningful attributes such as interests, preferences, motivations, and life stages. And because your brand controls the data, you can find those same audiences across multiple channels, whether that’s streaming services, social media platforms or retailer networks. This means you can test a variety of channels to see which are most effective for acquisition.
Fueling the tech with customer intelligence
Building this foundation of customer intelligence is vital to make the most of those exciting new AI-powered applications we talked about at the start. While I don’t believe in silver bullets, I do believe there are plenty of highly effective marketing technologies that can help you deliver engaging, personalized experiences to acquire, retain, and grow customer relationships. They just need to be powered with the right fuel to deliver the results you expect.
We recently dedicated an Acxiom roadshow to advancing acquisition. Watch the sessions on-demand to learn more about how your brand can use customer intelligence to acquire new customers and grow your business.
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