Marketers need to start thinking like CEOs – or at least like Chief Profitability Officers for the business. Their goal is not to optimise campaigns and journeys, but to drive business growth. To make this happen, marketers need an Attention Stack. The starting point is to understand who the Best Customers are and what’s common to them. The three building blocks for this are customer data platform (CDP), customer lifetime value (CLV) and Best Customer Genome (BCG).
The CDP is the repository of all customer data across all touchpoints. In the non-digital world, customer data was very hard to collect – this is why retail stores introduced physical cards which shoppers could scan at checkout allowing the store to connect customers to their buying behaviour. In the digital world, this is much easier: all actions done on the website or app can be captured and stored in a database. I have discussed the CDP in my How Velvet Rope Marketing can transform Customer Loyalty series.
As defined by the CDP Institute, “A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems…The CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results.” More from the Hubspot blog: “CDPs build customer profiles by integrating data from a variety of first-, second-, and third-party sources. This includes your CRM and DMP, transactional systems, web forms, email and social media activity, website and e-commerce behavioral data, and more.”
With the data in a single store, it becomes possible to calculate CLV for every customer and decode the BCG.
As I wrote previously in the Velvet Rope Marketing series quoting Peter Fader: “CLV is a forward-looking, predictive measurement that is calculated by modelling and projecting the following: how long the customer relationship lasted (for churned customers) or is likely to last (for active and future customers), number of transactions, value of the transactions, and other non-financial activities the customer may engage in. Eg. visits to website, willingness to try other products, posting ratings and reviews about the company’s products, and/or referring other prospective customers.”
I also explained BCG in the Becoming Chief Profitability Officer series: “The Customer Genome provides a distinctive digitally encoded representation of a customer. It allows us to compare different customers, predict what a specific customer is likely to do next and create personalised experiences… By looking at the Customer Genomes of the Best Customers as determined by their CLV, it now becomes possible to identify the Best Customer Genome (BCG) – those attributes and actions common to the most valuable customers of a brand… Knowing how these customers are different lets us replicate their attributes in acquisition and behaviour in the onboarding process to ensure that brands can manufacture more Best Customers.”
With this foundation in place, it becomes possible to focus on the business outcomes.