by Eric Kim
Solutions Architect @ Segment
Look into any category leading company—Nike in footwear, Netflix in streaming, Amazon in e-commerce and cloud computing—and you’ll find there’s a high correlation around customer obsession.
These companies dominate market share with one simple strategy: They put customers first. And they do so by applying a next-level focus to understanding their core customers, delivering hyper-personalized experiences, and offering high-quality products or services. The most effective customer-first companies today use data and technology solutions to deliver seamless experiences no matter how customers engage with their brand.
Because most customer interactions now occur over a digital mediums (mobile app, website, in-store purchases, etc.) you need a reliable data infrastructure to collect, unify, and act on your customer data. What this entails technically, is the ability to collect every first-party user interaction and integrate that data into the many platforms your teams use.
This is what we at Segment call Customer Data Infrastructure, or CDI for short.
Throughout the rest of this chapter, we’ll outline a path for you to build a sound data infrastructure so that you can truly put customers first and use data in a way that’s mutually beneficial for your customers and your business.
Customer Data Infrastructure is the technical foundation for any customer-first organization. By taking an infrastructure-based approach to the unification, standardization, and activation of data, you can ensure your data is consistent across all of your tools, and it’s high quality. As a result, you’ll have more opportunities to personalize user experiences, faster time to insight, a full picture of every customer. In other words, you can trust in your data.
CDI is made up of three critical components to make all of this happen:
Together these three pillars of CDI help you connect and unify your first-party data, ensure your data is accurate, and cater each customer interaction to that individual’s preferences. In the section below, we’ll detail how each pillar of CDI helps to unify, standardize, and activate your customer relationships.
To get a complete picture of customers and their journeys, you’re going to need to collect first-party data. CDI gives you the ability to connect every meaningful first- party customer interaction on every channel—from your mobile app(s) to website(s), in-store sales to backend systems, and from payment services to your CRM.
With the proper infrastructure in place, data will be available and consistent across all of the tools your teams prefer to use. These tools span from analytics tools (Google Analytics, Mixpanel, Amplitude) to marketing tools (Mailchimp, Optimizely, Braze, Intercom) to data warehouses (Redshift, BigQuery, Postgres, Snowflake) and many more.
Note: The data we are referring to here is all first-party data, which is the data you collect first hand from direct user interactions across your owned platforms. It is NOT purchased or collected from an external entity like a data aggregator or data management platform.
By decoupling data collection from vendor implementation, your engineers will save time writing individual integrations, your go-to-market teams can get up and running new tools faster than ever, and everyone can work from a unified history of the customer journey.
To trust that data in your downstream tools is accurate, consistent, and complies with internal privacy and security policies, you need a robust set of tooling for data governance. No matter how strict or laissez-faire your data implementation process is, you’re still bound to eventually uncover data errors, missing fields, and duplicate information that slip through to production.
As data discrepancies surface, negative cascading effects will begin to infiltrate your organization. Marketing teams won’t use data to deliver personalized customer experiences, or even worse, send inaccurate communications that cause customer confusion. Analytics teams will spend unnecessary hours piecing together an accurate representation of the customer journey, resulting in delayed insights and action. Product teams could be misinformed and introduce features that have negative impacts to activation and churn. The list goes on and on.
On the other hand, properly instrumented customer data infrastructure addresses such problem areas. CDI gives you confidence that your data is accurate by enforcing common data standards across your organization. It ensures consistency and security by giving you total control over what constitutes good, clean data vs. bad, unnecessary data at the source of generation.
Once you’ve collected the broadest set of raw data and trust that it’s accurate, your next move is to make that data actionable. This is where audience management (our final component of CDI) comes in to play.
Audience Management resolves all of your user actions into profiles and allows you to identify what’s most important to each user, like their favorite brands and average purchases per month. It allows you to build rich, relevant audience profiles that sync/update in real time as customers engage. This ensures a fast, consistent, personalized experience as your customer interacts with your brand.
The combination of the three pillars of CDI will equip your organization with reliable data infrastructure to understand and interact effectively with your customers across all channels. This unlocks organizational benefits in the following areas:
CDI democratizes high-quality data throughout your organization. Gone are the days of analytics teams being a bottleneck for accurate reporting and audience building. Because CDI federates customer data across all integrations and tools where data is used, all teams can be confident their working with the same, accurate data set. On top of that, turning on new tools for marketing and analytics can be done in an instant and can be easily backfilled with historical data. And finally, your engineering teams can focus on building your core product rather than integrations, data pulls, and cleanup.
Because CDI is centers around first-party data collection at the source, you can feel confident your customer data gets to from where it originates to where it needs to be in the most efficient way possible. CDI unifies customer data across all data sources — web, mobile, servers, and more — and stores historical data so your customer profiles can become more complete over time.
CDI safeguards the integrity of your data and ensures your team has access to high-quality data in each and every tool used. With CDI, you can apply a single data spec to multiple data sources—website, apps, servers, etc.—to ensure you have consistent and accurate data anywhere you need it. This unlocks the ability to diagnose data quality issues before they impact production and block unexpected data types and events from reaching your data warehouse or marketing tools. On top of that, it becomes much easier to comply with emerging privacy standards and customer preferences by carrying them through your whole marketing stack.
The ability to act on your customer data with confidence unlocks enormous business impact. The list of ways to act on your data is practically infinite, but here are a handful of ways we’ve seen customers take action:
Good customer experiences rely on accurate and complete customer data. And, that accurate and timely data requires the right infrastructure. Without the right infrastructure, your teams won’t be aligned, your data won’t be right, and your tools won’t be operating off of full view of the customer.
Ultimately, all of this misalignment will be reflected in your customer experience. With CDI, this does not have to be your reality. Instead, you can use data for good, deliver awesome user experiences, and make data a true differentiator for your business.