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GUEST COMMENT How brands can harness their customer data to drive success in direct-to-consumer selling

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Image: Fotolia
Image: Fotolia
Tido Carriero, chief product development officer of Segment
Tido Carriero, chief product development officer of Segment

With the pandemic accelerating digital transformation across retail, one trend has come to the fore: brands pivoting more of their sales towards online direct-to-consumer (D2C).

 

Once a strategy favoured by Instagram brands and digital-first companies, D2C has come into its own in the time of coronavirus, as consumers have been forced to shop online for the things they used to browse in person. And for big name brands like Nike, skipping the middle-man and engaging directly with more of their consumers has helped to fuel significant growth.

 

The D2C model gives brands an opportunity to connect and build customer loyalty like never before. But for the strategy to deliver, it must be built on a solid foundation of customer data.

 

Getting to know your customers through data

In today’s digital economy, every customer touchpoint and interaction generates data that, when combined and analysed, can help to reveal just what makes customers tick.

 

For D2C businesses, this understanding is critical. It allows for the creation of authentic, personalised customer experiences, and can be used to inform every part of business strategy, from building new, ‘sticky’ products to increasing marketing ROI.

 

However, harnessing customer insights can be tricky, especially for brands that have recently pivoted to D2C selling and are not used to managing a massive influx of customer data. Here’s how to get around the biggest challenges:

 

1. Build your data stack from the ground up

Your customer data has so much potential that it’s easy to get ahead of yourself. Before you get anywhere near a data-driven tool, you first need to make sure that the raw data you plan to feed it with is clean, accurate and reliable. If you don’t, it’s just a useless bit of tech.

 

Start with your company’s data foundation. While it’s possible to build a data infrastructure in-house, it’s a complicated process that can consume huge amounts of money and engineering time. Focus your engineering resources where they can have the greatest impact, and look for a ready-made solution that takes the burden of building and maintenance away from your team.

 

Customer data platforms (CDPs) are one of the best options for D2C companies looking to clean, rationalise and consolidate the customer data that’s flowing in from thousands of digital touchpoints. Once in place, a CDP provides a robust foundation for your data architecture, allowing you to easily integrate and activate all the many data-driven tools you want to use. As a single central resource, this data backbone also means you won’t be saddled with data silos, duplications or blind spots. Instead, everyone across the business - from marketing to product - is drawing on the same real-time information to fuel valuable, connected customer insights.

 

  1. Focus on the data that matters

With so much data on your hands, it’s easy to think that the more metrics you track, the better you’ll understand your customer. In reality, that’ll just leave you with a lot of numbers, and not much meaning. You need to be focused if you want to get real value from the information you’re looking at.

 

Think about the entire customer journey, from start to finish, and pinpoint the most useful questions that data could help you with. For example, how are the majority of customers getting to your website? Finding out that Instagram is an important traffic-driver is an important discovery, as it could show you where to focus your marketing spend. Where are your customers dropping out of the buying journey? Knowing this can help you to identify and fix any friction in the digital experience.

 

Which promotions are having the greatest impact on sales? Who are your most loyal customers, and what makes them buy from you again and again? Which marketing channels are performing poorly If you can focus on questions like these, you’ll start to get real value from your data.

 

  1. Turn insight into strategy

Your data is only valuable if you’re using it, so it’s important to make sure you have a plan for moving from insight to action.

 

Don’t treat your data as something static that you only dip into once a year. Although you’ll answer some valuable questions that way, you won’t see how external factors are changing customer behaviour in real time - something that can create both opportunities and threats for a D2C business. Use an analytics tool to create a live tracker for the data points you’ve decided to focus on, and use it to stay up to date.

 

Many tools, like MixPanel, allow you to share these dashboards via a simple URL, creating a simple and effective way to ensure teams are aligned around metric-based goals and can easily see how they’re tracking against them, as well as getting real-time insights into how consumer trends are shifting.

 

For the C-suite, you can share a more focused monthly tracker, charting your progress against agreed targets and uncovering the areas that require greater attention.

 

Creating a lasting connection

In recent years, retail companies have been quick to recognise the lasting value of a direct customer connection, and the power of owning every part of the customer journey. It’s a trend that’s only going to continue as the economy continues to shift online.

 

As more retailers take the D2C route, the companies that stand out will be those that can build the most compelling brand experiences and foster the deepest customer connections. And to achieve that? It’s data, stupid.

Author:

 

Tido Carriero is chief product development officer of Segment, a customer data platform

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