Global enterprises are increasingly faced with the following dilemma: On one hand, they need to truly know their customers in order to deliver the hyper-personalized experiences necessary to separate from the competition and strengthen loyalty.
On the other hand, collecting and processing customer data is growing more complicated by the day. There are three main reasons why:
- Many consumers don’t trust businesses enough to share their personal data
- When brands collect customer data, they often keep it in siloed systems
- Data protection laws constantly evolve and restrict brands’ customer data practices
To resolve this dilemma, enterprises are turning to three core customer data solutions from SAP:
- Customer Identity and Access Management (CIAM) for B2C
- Enterprise Consent and Preference Management (ECPM)
- Customer Data Platform (CDP)
What’s the difference between these similar-sounding solutions? And how can they help companies engage their customers in a personalized, trusted way? In this blog post, I’ll shed some light on answers to these questions.
Customer Identity and Access Management: Clearly understand your customers
First, companies need to know who their customers are. SAP CIAM for B2C handles this challenge. It provides the registration screen sets and log-in functionality necessary to collect 1st party customer data. It also captures this data in dynamic customer profiles that the enterprise can orchestrate across the business. To better understand SAP CIAM for B2C, let’s analyze two key concepts: Identity and Authentication.
Identity:
In a value-for-information exchange, customers step out of the shadow of anonymity in return for an opportunity. This opportunity could be as minimal as a newsletter sign-up or as detailed as full account registration. The personal data shared directly by customers to the brand from their 1st party customer identity. As the customer relationship grows and they share more information with the brand, this first-party profile enables accurate, relevant personalization.
Authentication:
This is the customer’s “identity card” – the proof that it is him and not his neighbour. In the digital world with all the different touchpoints, it is essential that customers are recognized securely when they register or log in to a brand’s digital properties. There’s a multitude of authentication options, ranging from User ID/ password combinations to biometric features and the newer FIDO technologies.
Enterprise Consent and Preference Management: Build Trusted Customer Relationships
Beyond knowing who their customers are, brands also need a firm grasp on how to engage with them. This need is consumer-driven; they will leave a brand if their trust is broken at any point in the relationship. It’s enforced by regional data privacy laws, such as GDPR in the European Union or the CCPA in California, which lay out strict requirements for how brands can collect and process customer data.
With SAP ECPM, brands can deliver the transparency and personal data control customers demand while addressing data privacy requirements. Let’s explore the core concepts of preference and consent data in more detail.
Preferences:
Once a customer has left anonymity, he only wants to be informed about what really matters to him. And he communicates this to the company via his preferences – for example, by specifying how often he wants to receive newsletters or which topics he wants to be informed about.
Consents:
At the latest since the GDPR and its global variants have impacted digital communication, it is essential that customers document how the company handles their data. And he also has the right to comprehensively dispose of his data at any time, up to and including the decision that the company must delete all his data.
To summarize, the CIAM and ECPM solutions capture, manage, unify, and reconcile these four classes of information with other target systems where customer data resides. The solutions thereby form the first-party, permission-based foundation for hyper-personalized engagements that can win new customers and strengthen existing customer loyalty. The importance of an existing CIAM and ECPM solution as prerequisites for the further process in the CDP cannot be overstated: No CDP can work without this data. The solutions are the fundamental basis in a CX architecture.
How may I serve you? The CDP delivers rich customer context in real-time
Why is a CDP necessary if a brand already has CIAM and ECPM solutions? The answer: There’s a wide variety of data that provides information about what customers are interested in, what their intentions are, and in what way they can best be served. A CDP is built to combine these various sources into robust customer profiles and make this data available in real-time to engagement systems across the business.
However, not all data sources are of equal importance: While 1st party data forms the highest level of confidence, 2nd party data from business partners contribute strategic added value to the customer profile. And even 3rd party data, i.e. customer information that has been purchased from a third party or that comes from social media sources, can contribute significantly to the overall view of the customer (even if it does not have as high a level of confidence).
With all this customer information, the CDP enables brands to create targeted segments and audiences. It also fuels engagement systems with the rich customer context necessary to deliver personalized experiences consistently across commerce, service, sales, and marketing engagements (see illustration).
The CDC is one compelling data source along with other sources for the CDP that is required to activate hyper-personalization in customer engagements
To achieve all of this, SAP’s CDP solution offers the following core capabilities:
Purpose-driven data processing:
CDP unifies customer data from a variety of source systems but considers the purpose of data collection as well as customer consent for data processing. This helps companies understand when, through which channel, for which purpose, and in which context the data may be used for specific customer approaches without risking compliance issues.
Unified customer profile:
Customers interact with companies through more touchpoints than ever before, but for the most part they each share only fragmented, incomplete, and sometimes even flawed information about themselves. To form a coherent and consistent customer view, however, it is necessary for companies to combine these puzzle pieces into one big picture. That’s why SAP’s CDP solution consolidates manifold types of relevant data and maintains it in its respective context to ensure a high level of data quality. Hence, customers can be addressed in a hyper-personalized way across engagements. For further information on the importance of the so-called 360° profile, see this blog article.
Real-time data processing and dynamic customer segmentation:
Furthermore, the CDP leverages the data to assign customers to previously defined segments in real-time. For example, customers can be assigned to a Gold status once they exceed a pre-determined threshold of purchasing volume. In the future, CDP will also leverage ML and AI models to proactively identify segments that marketing has not yet been able to identify. In all cases, CDP can help breaking down data silos to classify customers in a very granular way and hence communicate with them as personally as possible.
To summarize, a CIAM solution and an ECPM solution are the foundation for the CDP to identify customers and collect and process their personal data. This is crucial for companies to understand who their customers are and how they wish to engage.
The CDP, on the other hand, enables companies to activate their customer data from the various data silos in real-time to deliver highly personalized customer interactions at all touchpoints across the enterprise. Companies then know what they can and should talk about with customers to deliver the best possible customer experience.
Together, the two solutions enable companies to solve the the dilemma of increasingly privacy-conscious consumers and their demand for individual engagements by helping to build trust, yet personalized relationships with their customers.
Mónica Domingo
GTO Customer Experience Value map
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