To succeed in any market, you need to become customer-obsessed and get ready to own the moment. What is the most powerful way to own the moment with customers? Using real-time data. Our recent webinar, Why Real-time Data Matters: Realizing True Customer Lifetime Value, with Forrester analyst Rusty Warner explored how to maximize your efforts and effectiveness with Customer Experiences (CX) powered by real-time data.
From understanding customer behavior to predicting future trends, real-time data has become the cornerstone of success for modern businesses. But perhaps one of its most profound impacts lies in its ability to unlock the true potential of Customer Lifetime Value (CLV). Let’s start by defining some key areas that will be key to our concept showing how real-time data is one of your most effective tools for impacting customer lifetime value.
What is Customer Lifetime Value (CLV)? Why is Customer Lifetime Value (CLV) Important?
Customer Lifetime Value (CLV), is a metric that quantifies the total value a customer brings to a business over the entire duration of their relationship. Traditionally, CLV calculations were backwards-looking based on historical data, providing a somewhat static view of customer value. A modern approach, according to Rusty Warner, is to think of it as a collection of many moments and to use CLV as a future-looking metric to best focus your energy where you will get the best results. Each moment is a point in time when a person interacts with a brand to get what they want immediately and in context. These moments are critical points at which you can drive CLV, but only if you have data to focus your efforts. The key component of a modern CLV approach is to not think of CLV as purely historical, but rather as a constant conversation with a brand. That means utilizing a customer profile that is enriched with real-time data to create an experience that helps your brand own the moment.
What is Real-Time Interaction Management (RTIM) and What’s The Value?
According to Rusty, Real-Time Interaction Management (RTIM) is defined as “enterprise marketing technology (MarTech) that delivers contextually relevant experiences, value, and utility at the appropriate moment in the customer lifecycle via preferred customer touchpoints.” This is the practice for how you will unleash the power of your customer insights in the critical moments of the customer journey.
Integral to RTIM are 5 key areas:
- Recognition: Identity resolution at a personalized, individual level
- Context: History merged with real-time contextual insights
- Experience: Analytics and business rules to determine the next best step
- Orchestration: Delivery and two-way dialog at the preferred touchpoint
- Optimization: Insights for real-time interactions and strategic planning
Spanning all of these areas (and supporting each section), is continuous real-time data ingestion and streaming activation from a platform like a Customer Data Platform (CDP) such as Tealium. To function, RTIM considers customer and business value to determine the next best experience. Let’s take a look at the example below.
How To Implement a Customer-Focused Mindset
Now that we’ve defined RTIM and CLV, it’s time to put them together as the secret ingredient to enterprise-level, whopping success – becoming customer-obsessed. As Rusty puts it, “A customer-obsessed enterprise operates differently, focusing its strategy, operations, and budget on the customer.” That means not just telling customers why your business or product has value, but something more powerful… Having them come to that conclusion on their own.
For example, a company-focused perspective revolves around sales (decreasing costs, increased market share, better stock value). Let’s flip this on its head. A customer-focused perspective is about the customer as the heartbeat (increasing their convenience, making their lives simple, and building trust with them). This should be reflected in how you measure success (with CLV as we’ve been discussing) and the capabilities built into your technology stack (which we’ll discuss below).
Now that you’re in a customer-focused frame of mind, let’s delve into metrics. It’s important to tie the customer-obsessed mindset with Key Performance Indicators (KPIs) to determine if what you’re doing is working (and conversely, if it’s not, where to pivot). Rusty recommends collaborating with your Chief Financial Officer (CFO) and your data science team to define the right CLV for your business. You’ll want to keep in mind that collaboration is the key to success.
What Should Your Data Strategy Have? What Should Your KPIs Have?
- Avoid Data Silos: You and your team must work from accurate, consented data that is available across the organization. How can you avoid data silos? A Customer Data Platform (CDP) like Tealium is a great technology choice to address data silos (see our State of the CDP report for metrics).
- Collaboration: Just like you’d want to avoid data silos, you’ll want to avoid organizational silos. Remember, having the customer at the center of your universe means that you’ll want to activate multiple touchpoints, and thus, involve multiple departments.
- Focus and Iterate: Let’s face it – not every personalization tactic is going to work perfectly… And it’s important to know that every KPI will be perfectly tied to a customer-focused strategy. Get to know your customer, focus on what’s working, and cut out what is not.
How To Engage and Convert More Customers: The Power Of A CDP
When it comes to an effective customer-obsessed strategy, you’ll want a tool like Tealium’s CDP to help with real-time customer data orchestration to deliver the best CX.
Your organization’s goal should be to build a technology stack that can effectively tap into your organization’s deep intelligence but in the context of the most critical moments with customers. This means integrating systems like your CRM and Cloud Data Warehouse (CDW) that are rich with historical data and insights with more performant and well-integrated systems like a CDP that have a continuous view of customer behavior and directly connect to CX technologies. Our CDP helps you connect the real-time context of customer engagement to deep repositories of customer insight you have in your organization, providing you with a complete picture of and methods to activate against it.
Here’s how we think of managing a real-time data supply chain to meet customers in those moments that matter:
By evaluating your data across its lifecycle like this, you can effectively plan the data layer needed to support real-time customer engagement.
Many CDPs don’t work in real-time across each stage of the data lifecycle reflected above, which can have less than desirable consequences for your business across multiple touchpoints (every technology represented in the “activate” stage). If the end goal is to meet the customer in the moment, you’ll want a tool that works in real-time to have an accurate, consented, and actionable conversation with your users.
Increasingly, organizations are centralizing more and more data in the Cloud Data Warehouse (CDW). However, if you don’t complement the deep storage of data in the CDW with a real-time CDP, you can run into limitations on the intelligence you can access within the moment of customer engagement. This has negative impacts on customer perception of the brand. Tealium’s CDP can work in concert with your CDW (see our CDW Partner Ecosystem), to create a holistic customer data strategy (explore Tealium’s Take: Customer 360 Strategy) supporting both legacy approaches to launching campaigns and real-time use cases.
So, want more information on how you construct a tech stack that can maximize CLV by enabling an organization to make effective use of real-time data? We have a few more resources for you. We recommend checking out Why Real-time Data Matters: Realizing True Customer Lifetime Value, and How To Leverage Your Cloud Data Warehouse with A Real-Time CDP.
