How Customer Data Platforms Power Digital Transformation
Digital transformation—specifically the practice of using data throughout a business to make it more data-driven and therefore more efficient and profitable—has been a long-term goal of many organizations. Over the last few years, however, businesses have had to significantly accelerate their digital transformation plans to compete in a tight market. As a result, many have turned to Customer Data Platforms (CDPs) to jumpstart their digital transformation initiatives.
A CDP unifies customer data from different types of technologies–and provides a single view of the customer for the entire enterprise. When this unified customer data is applied across technology tools, you can accomplish your short-term and long-term digital transformation goals faster, and with better results. This unified data is then used to provide personalized experiences and allow you to bridge customer data gaps within your organization.
What Does Digital Transformation Really Mean?
Fundamentally, digital transformation refers to the integration of digital technology into all areas of a business, including service, sales, operations, marketing, and more. The immediate goals of digital transformation are typically to streamline business processes and increase productivity, efficiency, and profitability. However, the ultimate point of a digital transformation is to use technology to enable a better customer experience. To put it another way, digital transformation will have a tremendous impact on how you operate and deliver value to your customers.
Let’s look at some real-world examples:
- A company that’s already ahead of the curve in using CDPs for digital transformation is AB InBev. Why did the global beverage giant decide on Treasure Data Customer Data Cloud? “Here at ABI, the CDP is our single source of truth talking about our consumer data and it is in a strategic place in our martech stack,” says Lucas Borges, senior manager, consumer data strategy at AB InBev. Borges adds that the company’s emphasis on CDP-powered digital transformation, long before the pandemic struck, helped it roll with the punches as shutdowns of many retail outlets made it more difficult to keep the channel open for purchases. For example, the company was able to quickly pull together apps and open up limited new direct-to-consumer channels to show consumers where and how to buy their favorite beverages, something that probably would not have been possible pre-digital transformation.
- Subaru leveraged Treasure Data’s enterprise Customer Data Platform solution, Customer Data Cloud, to understand whether its ad buys were paying off, and how to get more from its advertising budget. This kickstarted a digital transformation of Subaru’s marketing department and eventually led to customer data being used in new ways such as product design—a classic example of departmental digital transformation spreading throughout the larger organization when leaders realize its power.
- The management of Stripe International Inc. had a similar experience. The international retailer and brand manager began with marketing, then started to experiment with new ways to digitally transform its business, even moving to rationalize its reordering logistics and supply chain. “We used to outsource reporting of access analysis, communication scenarios, and MA tool implementation quite often,” said Shigeki Yamazaki, advisor of the Digital Transformation Division, managing director and general manager of the Marketing Division of Stripe International Inc., in a presentation entitled “Case Examples of Stripe’s CDP Utilization.”“Now that we have customer data capabilities and can manage in-house, we are motivated to look at problems and say, ‘Let’s try this too.’ Also, our CDP helps us understand how our actions bring our customers closer,” says Yamazaki. “By increasing the accuracy of our work, I feel we have come closer to understanding our customers, the original goal of introducing Treasure Data.”
An Easy Way to Understand Digital Transformation
If digital transformation seems a little akin to saying, “And here, a miracle occurs,” here’s a model that can help us understand how companies come to adopt the transformative technology—such as CDPs—that help change their organization for good: the SAMR model, developed by Dr. Ruben R. Puentedura. SAMR stands for:
- Substitution: Technology acts as a direct substitute with no functional change
- Augmentation: Technology acts as a direct substitute with functional improvement
- Modification: Technology allows for significant process redesign
- Redefinition: Technology allows for the creation of new, previously inconceivable processes
Let’s look at an example from the energy utility sector to better understand these levels. Imagine a line worker sent out in a repair truck to fix power outages caused by an ice storm. In the past, the repair worker would have had a clipboard of paperwork to guide the work to be done. Now consider this process in the age of smartphones:
Substitution: The paperwork is digitized as a PDF and displayed in a smartphone app; the app is essentially acting as digital “paper.”
Augmentation: The paperwork (and its fields / content) is digitized and replicated in the app, but now rather than being a static PDF, information such as location of the work can automatically be populated. This automation saves time and effort, and allows the worker to focus on higher value tasks (such as fixing the downed electric line).
Modification: The paperwork is digitized and replicated in the app, but now the app can use data such as weather, the number of households without power, and distance between trouble spots to optimize the worker’s route and prioritize the work tickets, driving even further time saving and value.
Redefinition: In addition to all of the above, the app uses the accelerometer in the phone to measure acceleration. If a sudden acceleration is then immediately followed by rapid deceleration, there are a couple of likely scenarios: either the worker has dropped the phone while working in the elevated bucket or more critically, the worker has had an accident and fallen from the bucket. In these scenarios, the app could alert dispatch to have another worker check on the situation, or the app could even automatically contact emergency responders with the exact location of the potential accident.
As you can see from these examples, value progressively increases with each level in the SAMR model. Organizations that focus their digital transformation on “Modification” and “Redefinition” will see the greatest value and the highest level of competitive differentiation.
Why Start Your Digital Transformation With a CDP?
Starting with a customer data platform (CDP) as the cornerstone of your digital transformation strategy will give you a more comprehensive understanding of your customers, eliminate data silos, and help you build out an integrated and effective data infrastructure. A CDP is foundational for digital transformation because it lets you gain value from large volumes of customer data, without massive engineering effort.
Your organization’s first step to harnessing this valuable resource is to create a comprehensive, accurate view of every customer by consolidating and integrating all the data that you have at your disposal. This data can be found in any number of existing solutions, legacy applications, and other systems.
Technologies deployed or replaced during digital transformation can generally be grouped into four buckets:
- Digital Marketing Suite: SEO, Content Management System, Web Analytics
- Customer Management Suite: CRM, Data Management, Sales Enablement
- Customer Support Suite: Help Desk, Knowledge Base, Call Center
- Business Operations Suite: Enterprise Resource Planning, Order Management
A CDP can unify customer data from all four types of technologies above–and provide a single view of the customer for the entire enterprise. When this unified customer data is applied across technology tools, you can accomplish your short-term and long-term digital transformation goals faster, and with better results. This unified data is then used to provide personalized experiences and allow you to bridge customer data gaps within your organization.
That’s why CDPs are such a popular choice for the foundation of digital transformation. They help all of your infrastructure—whether legacy tools, homegrown systems, data lakes, SaaS-based sales or marketing tools and customer support systems—to read from a single source of truth about each customer. In addition, they help you activate actions across the stack based on customer interactions, interests, and ML-driven insights.
Power Your Digital Transformation With Treasure Data
For many companies, a CDP is exactly the kind of martech that can transform their organizations from running on fragmented, siloed systems to companies that easily use customer data not just to automate the kind of personalized customer journeys that build loyalty and CLV, but transform their organizations as well.
Treasure Data Customer Data Cloud is uniquely suited to act as the central solution to power your digital transformation. It allows you to create unified, robust customer profiles that contribute to deeper consumer insights–a competitive edge that is not easily matched. It also enables you to provide powerful, personalized connected customer experiences. By aggregating customer information across all of your channels, you can create a 360-degree view of your customer and share it across the company. With a deep understanding of your customers’ preferences and behaviors, you’ll be able to identify and respond to market shifts quickly and efficiently.
Customer Data Cloud makes your entire stack more valuable by allowing each component to leverage the insights and information from the other technologies. This foundation allows you to accelerate your digital transformation efforts and makes it easy to swap in and out tools, as needed.
Download our guide, CDP for Digital Transformation, for a list of some common digital transformation company goals–and how Treasure Data can help. Ready to take the next step? Click here to discuss your digital transformation strategy with one of our experts and get a demo of Customer Data Cloud.
Editor’s note: An earlier version of this blog was published in 2020. This blog was revised and updated on 6/21/23.