Maximize Revenue by laying the foundation for Circular Business Economy with Customer Data Platform
During internal & external conversations on Customer Data Platform, one question pops up almost every time – “Is a CDP investment worth it?”. Well, the answer to this question is always a calculated “of course”.
With the ever changing economic dynamics & customer expectations, it has to be a priority for brands to not just unify customer information into a profile but also to make this profile extremely actionable based on TRUST & INSIGHTS.
The right combination of unification, intelligent calculation & activation creates the bedrock of data-driven customer engagement & helps garner a favourable limbic response from the end consumers. Ultimately, this positive mindshare leads to expanding marketshare thereby stabilizing existing & opening new revenue generating avenues.
This positive mind-space forms the basis of establishing the coveted “Circular Business Model”. Logically, it is right to say that a Trust & Consent Driven Customer Data Platform lays the fundamental building block to gain a customer’s positive mind space which in turn opens doors for sustainable circular economy.
I agree that a good CDP cannot, by itself, result in creating a good circular business model. However, it can help a business unearth the vital customer formula – a combination of customer behaviour, usage patterns, perceptions, journeys, across all touch points – to solve the grand equation of continuous & closed-loop revenue generation.
For example, consider the following Automotive Industry Scenario,
An Auto Manufacturer will look at continuous & sustainable revenue generating opportunities. Thus begins the quest for a Circular Business Model. In this quest, the business needs to gather enough information about the prospects, customers & most importantly vehicle usage by customers in order to create that coveted 360 degree Customer Profile. Central maintenance of this collection of enriched customer records creates the backbone for driving & understanding relevant customer engagements. Now why does a central 360 degree customer profile & personalised engagement matter? Imagine the following scenarios,
- Identifying owners and cars who are most likely to respond to buy-back offers
- Identification of relevant prospects to on-board into subscription business & sell them pre-owned vehicles
- Positioning right vehicles at the right time at the right place to the right users across marketplaces
- The above data Monetisation, across marketplaces, with customer’s consent & trust
- Promoting exchange of old vehicles with new ones to right set of users who have maintained their cars well; which in turn can even provide reusable parts for new vehicle manufacturing
- Incentivising good car usage with loyalty programs & buy-backs
For all the above scenarios to take fruition, consolidation of customer and vehicle usage information into one enriched end-to-end 360 degree customer profile needs to happen as this will help unearth the right set of content & customers for creative value added opportunities / business scenarios. Of course, all of these should happen with customer’s consent in order to gain trust. These are exactly what a Customer Data Platform helps in.
For instance, when you look at SAP Customer Data Platform, you can seamless ingest information from various source systems via standard out-of-the-box connectors. Also, with the Low Code / No Code Connectors Studio, you can ingest data from non-conventional sources as well. The same thing applies for outbound integration as well. Between this inbound and outbound process, the platform provides you ways to derive insights & make the outbound activation meaningful and contextual. It also does the most important part – Helps Gain Trust with customers – by seamlessly incorporating a customer’s consent & preferences as processing purposes which define which customers attribute needs to be used by which downstream process and system. Have a look at the following illustration to get a pictorial view of how this happens with SAP’s Customer Data Platform,
In summary, customers become more open to sharing their data with brands when they get a feeling of trust & security. The more they share, the more enriched customer profiles become. This enrichment opens up innovative use cases and revenue / monetisation avenues which can promote a circular business model with near-continuous revenue generation. This is exactly why an investment in CDP is worth it and helps one to uncover creative revenue potentials.
Would love to hear your thoughts on this. Do you think CDP might be one of the central puzzle pieces when it comes to establishing circular business economies.
In the upcoming set of posts, we will explore the essential must-have features of a CDP and how SAP is positioned nicely to be the trend setter in Customer Data Platform space.