Why customer data is more valuable than ever

2024 is the year to get the most out of customer data. 

Customer data plays a key role throughout the customer journey. It travels in cycles of collection, analysis and activation from the first interaction to advocacy. Mastering each – collection, analysis and activation – is the key to success in digital sales in 2024.

Data has been a topic of discussion for decades already, and we even wrote a book about it a few years ago, but we believe that the importance of customer data is only growing. Most companies haven’t tapped into their full potential yet, and that is hindering commercial success and relevance to customers in the tightened global competition.

There are multiple reasons why customer data should be a top priority for every business in 2024. Most notably customers’ expectations of increasingly personalised customer journeys, opportunities to leverage AI and technical advancements in customer data platforms (CDPs) drive companies to level up their customer data game. On top of that, increased concerns about privacy drive responsible companies to get creative in investing in zero and first-party data instead of relying on third-party data. 

Due to these developments, owning your customer data and utilising it effectively is more valuable than ever.

Stay ahead of the competition and meet customers’ expectations

International players have set the bar high for customer data capabilities. Customers today are expecting excellent customer experiences and personalisation at scale. These are only possible by mastering customer data. 

Last year, we had the privilege of having Nick Masca from Marks & Spencer join our Digital Commerce Forum as a keynote speaker. In his presentation, he lays out how the UK-based retail giant manages about 35 machine learning systems and over 50 use cases to provide stellar personalised experiences for their customers. While this is the expectation level that customers who interact with international companies have, many Nordic companies still have vast untapped potential in the customer data game. 

Investing on personalisation abilities has a solid business case. McKinsey estimates that companies aren’t able personalise their outreach at scale may have to spend around 10% to 20% more on marketing and sales to reach their current level of returns. Moreover, research shows organisations that leverage customers’ behavioral insights outperform other companies by 85% in sales growth and more than 25% in gross margin.

To stay relevant in the competition, especially if your horizons are on the international markets, you need to make mastering customer data a priority in 2024. This requires company-owned customer data, and the ability to activate it.

Customers’ expectations, however, come with a flipside. The same customers who want hyper-personalised customer journeys, value privacy very highly. Companies who excel with activating customer data, always start with trust. Customers are happy to share information if that is returned with additional value.

Privacy concerns are not just on an individual level; they are increasingly affecting international policies. The EU’s Digital Marketer’s Act regulates large online platforms and fosters fairer digital markets. For smaller players, having customers’ consent to data collection is a must. To ensure compliance with customer data matters, make sure you check out this article we wrote in collaboration with the legal counselling company Fondia.

Tap into all the AI-driven opportunities

AI changed the game last year. For companies looking to supercharge their digital sales, AI offers incredible opportunities, especially in marketing, customer communications and sales. Especially in relation to personalisation, AI is the piece of the puzzle that allows companies to scale up their personalisation efforts.

However, if you want to tap into all the opportunities AI poses, you need to have your customer data in check first. If the data is of low quality or poorly structured, realising AI opportunities will become impossible.

With AI, trust is a key ingredient – once again. No wonder trusted AI was the most prominent theme in many conversations regarding AI and customer data lately, most notably in the 2023 Dreamforce by Salesforce. Trust is the basis of everything, and when companies can trust that the data they own stays with them, the range of possibilities of artificial intelligence is limitless. 

Make the most out of recent technical advancements

Not only is AI changing the game, but in recent years, the customer data platform landscape has made interesting developments. Technical advancements are influencing a paradigm shift, and the composable philosophy has made its way to customer data.

The development in the CDP field changes how customer data is viewed in the digital commerce architecture. There are now better possibilites to have the customer data in one place. This enables full visibility of the customer and enables truly personalised experiences, real-time customer communications and immediate responses to customer queries no matter the channel the customer is using.

As the customer data landscape evolves, we are eager to see how different platform providers respond to the shifting markets. The most notable platforms we are following closely are Salesforce Data Cloud, BlueConic, Bloomreach, mParticle, Segment and the Helsinki-based Custobar. 

Many companies have spent the last decade investing in platforms and technical capabilities. Moreover, companies have gathered data, invested in data quality and enriched data, and still data remains underutilised in too many organisations. If your company is one of them, now is the time to get the most out of those investments and put your customer data into action.