In the previous blog entry, we used the fictional example of Tarmo, the village shopkeeper, to explain DMP systems and how they can be used to support digital sales. In this second part, we will cover the concepts of CDP and GDPR using easy-to-understand examples.
Strong customer identification: CDP
Tarmo, the village shopkeeper, knew his regular customers very well. He might call a customer who likes organic avocados on their landline and tell them that a new shipment has come in.
The village shopkeeper of the digital age can identify customers accurately based on information such as an e-mail address, phone number or login credentials. One example might be a visitor who spends some time logged in to the online service of a financial service provider, perusing content on interest rate caps, without making an appointment or buying the product. Strong customer identification makes it possible to remind this visitor about purchasing the product later by e-mail, a notification, a text message or a phone call, for example. Keep in mind that collecting personal data is subject to the visitor’s consent unless the company has a legitimate interest or contractual basis for processing such data.
A CDP, or Customer Data Platform, is an audience management system for identified customers based on strong identification of the customer’s information. In practice, a CDP is a CRM system with the addition of data on user interests based on strong identification. A CDP facilitates very accurate targeting of content for specific customers.
Customer Data Platform: Best Practices & Use Cases
Data protection and legislation: GDPR
Tarmo, the village shopkeeper, had a lot of sensitive information about his customers in his head, and he kept this knowledge until the end of his days. Tarmo refused even to share this information with his wife, as this could have given rise to reputational risk, meaning the spread of rumours and the loss of customers.
It is equally important to ensure that information is kept secure and handled appropriately in digital environments. From the perspective of data protection and legislation, it is essential to keep in mind that the law obligates you to confirm your right to store and process the information on digital footprints before you do so.
In particular, linking the data with specific individuals and processing such information comes with substantial requirements of information security, as well as data protection. When the use of this data is allowed, targeted marketing can produce excellent results.
In collecting and handling data, it is important to address legal compliance with the following issues:
· When does the right to process the information begin and end?
· When does the data need to be erased?
· What data can be stored and processed?
· The individual’s right to control his or her information
In the day-to-day collection of data, it is important to keep in mind that information such as IP addresses, location data and health-related details are considered personal data, and their collection is, therefore, subject to the visitor’s consent unless the company has a legitimate interest or contractual basis for processing such data.
For example, Tarmo’s customers are avid users of their loyalty cards, which means that Tarmo knows which customers are interested in organic avocados and can send them targeted advertising – as long as they have consented to it.
Cheaper than the village shop
We now have more data on our visitors than ever before. We also have more visitors than ever before, and we can serve them in increasingly automated ways. Wouldn’t it be great if we could combine and leverage data to make our services as personalised as those of the old village shop?
Today’s technological solutions make this possible, and it is now much more affordable than in Tarmo’s time.
Read The Village Shopkeeper of the Digital Era | Part 1
Written by Jonne Sjöholm