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What is your customer profiling really doing for you?

If you’re like most marketers, you’ve created customer profiles. You’ve defined your typical or ideal customer using attributes such as location, demographics, or behaviors. And you use these profiles to help create brand messages and experiences that resonate with your target customer.

But is the depth of your profiling enabling you to deliver tailored-fit, customer-centric experiences and touchpoints? 

At Microsoft Advertising, we take time to gather and study data and trends to uncover ways to empower marketers everywhere to be more successful. Below, we explore some ways top marketers are rethinking customer profiling to deliver highly personalized, customer-centric experiences.

Customers want you to know them

The explosion of data, combined with rapid technology advancements, is raising the bar when it comes to how customers expect to engage with brands. These days, customers want brands to know them and to provide personalized, seamless, and valuable experiences across every interaction. 

For example, let’s say you’re a hotel brand. Your customer stayed in a junior suite with kitchenette at her last hotel stay. When she returns to your site or app to book again, she doesn’t want to be asked about her preferences. She doesn’t want to comb through a list and submit details that she previously provided. She’d like the junior suite offered at the top of the list — along with all the amenities she requested in the past.  

It comes down to an effective data-driven strategy

Of course, the very technologies that have altered customer expectations are also providing massive opportunities for brands to gain actionable customer knowledge that goes far beyond profiling. This knowledge is not only helping brands deliver personalized experiences, it’s enabling them to anticipate what customers will do next. And it all starts with data.

The hotel room example is based on internal, historical customer data applied in a way that makes booking a room easier and more personal. This kind of first-party data is great and necessary, but it doesn’t give you the whole picture.  

But imagine the possibilities if you were to combine this data with additional external, third-party knowledge to gain a more complete picture about your customer. For example, what if you knew that this customer was searching for airfare to Los Angeles in early May? Wouldn’t it be great to surface special offers and deals for your hotel in their search results at just the right moment?

Merging internal and external data can help you engage the customer along their journey at the right time with the right message. And this is what top marketers are doing.

Microsoft Advertising and Advertiser Perceptions recently studied top marketers or High Performers who possess the ability to both understand and market to the customer decision journey. This aptitude is what we call the Customer Experience Quotient (CXQ). We found that the High Performers in our study are driving more sales and revenue as well as marketing ROI than their lower performing counterparts. They’re experiencing a 45% incremental lift in ROI for a typical campaign.

And it boils down to how well they are using data to understand and market to the customer journey to create customer-centric experiences. High Performers have an effective data-driven marketing strategy that blends internal and external data to create one consolidated view of the customer.

They’re partnering with agencies and data management platforms to consolidate internal search data, site analytics, and CRMs and call center data with third-party sources to power multi-dimension campaign segmentation and behavioral insights. A massive 70% say their most useful application for data is in customer journey mapping. And 68% say they also use it for dynamic, personalized ad creative.

So, at the very moment our hypothetical hotel customer decides to book her trip to Los Angeles, you’ve predicted her intent and have provided  a convenient call to action to book the junior suite with all the right amenities at just the right price — perhaps combined with an enticing airfare package or car rental offer.

How do you compare to High Performers?

Our hotel customer example illustrates the kind of personalized experiences that customers have come to expect — and highlights a few ways that a data-driven strategy can help you meet customer expectations at touchpoints along the decision journey.

To begin increasing your capabilities, benchmark yourself against the High Performers in our study. Ask questions like:
  • Am I collecting and consolidating high quality first- and third-party data?
  • Am I maximizing data to truly understand the customer journey?
  • Am I using data to predict intent?
For more detail, explore how High Performers approach their data strategy in Creating smarter customer journeys and how they apply technology in Mastering the customer journey.