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The challenge of customer identity management

Why data fragmentation can frustrate, annoy and ultimately drive away your loyal customers?

Poorly organized customer identity data is a major reason why brands fail to deliver the personalised experiences their customers crave. Instead of getting closer to their customers, many organisations actually frustrate, annoy and upset them, for example by sharing messages about products they may have already purchased. Companies that fail to take action over fragmented identity data ultimately risk ruining their customer relationships and undermining lifetime value.

Why is customer identity management so important right now?

Google Chrome’s self-imposed deadline to phase out third-party cookies by 2023 is fast approaching. It is therefore critical that brands address their own identity data infrastructure weaknesses to ensure their first-party data is well organized, unified across company divisions and can be relied upon to help deliver market-leading personalisation in a post-cookie world.

In a nutshell:

Without an effective post-cookie customer ID management strategy, companies will be unable to generate detailed customer-behaviour analytics. There is a real risk they won’t be able to:

  • Track and understand customer behaviours and preferences.
  • Gather insights from webpages, social media and self-service portals.
  • Analyse past customer journeys so that future journeys can be anticipated and optimised.

Companies’ long-term reliance on third-party data is no longer sustainable. Without a strategy to guide customer identity data capture, brands risk intensifying the issue of fragmented customer profiles. 

Deeper dive. So, how big is the data challenge facing marketing teams?

Research by Gartner shows that brands risk losing 38% of their customers if their personalization efforts fail to hit the target. Despite these risks, however, a recent Epsilon/CX Network survey across APAC, Middle East and Africa, reveals that 68% of companies continue to struggle with incomplete customer profiles and disorganised data sets. Meanwhile, 24% still have customer data siloed by channel or business function. 

So, how can organisations overcome the challenge of fragmented customer identity data?

Marketing teams are well advised to:

      • Resist the urge to jump ahead and focus on optimising campaigns and increasing targeted engagement.
      • Concentrate on laying a firm foundation for ID programmes first by, for example, correcting incomplete customer profiles.
      • Prioritise investment in owned platforms and software for customer engagement.
      • Gain an understanding of their data footprint and enhance data strategy.
      • Ensure they capture and leverage first-party data to drive optimal customer experiences.

How can marketing departments plug the hole left by third-party cookies?

In order to optimise identity management in the post-cookie era, marketing teams should consider using a broader mix of identifiers. Suitable customer identifiers include:

      • Email address
      • Phone number
      • Authentication details
      • IP address
      • Cookies
      • Internal identifier
      • Social media ID or handle
      • Device ID
      • Online transaction data
      • Postal address
      • Login data from your site
      • Offline transactions data
      • Third-party persistent identifier

If using a wider range of identifiers is too difficult, systems such as Epsilon’s proprietary technology need only two trackable data points to create a customer ID.

Other benefits of improved customer identity programmes include better adherence to privacy controls and opt-outs. This is a significant advantage as businesses are legally bound to ensure customers are protected. In 2019 a Ping Identity report found that 81% of customers would stop engaging with a brand if they suffered a data breach.

Improved visibility of post-purchase behaviour can also have a direct impact on a company’s bottom line through enhanced cross-selling and up-selling. This information can reveal which customer segments are most likely to convert on a particular up-sell or which product bundling suggestions are best for a cross-sell with existing customers.

The bottom line 

Organising and prioritising customer identity data management consumes time and resources, but the results can empower brands to deliver loyalty-winning experiences. With Google Chrome’s cookie deadline fast approaching, organisations must take control of their first-party data now, or risk losing sight of their customers, losing their ability to personalise and losing their ability to optimise marketing ROI.