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November 14, 2017

Mobile Customer Recognition – the Third Estate of Customer Identification

By Matthew Kelleher, RedEye

171114 RedEye Mobile customer recognition CDPIn preparation for a recent webinar on the growth of the Customer Data Platform I was struggling to fully articulate the value of one key part of it. Although it’s only recently begun to create a conversation in the market place, we’ve been discussing its merits for the last seven years. At RedEye, we call it Cross Device Identification. Simply put, it is the use of cutting edge customer identification solutions to allow organisations to recognise mobile browsers through their devices, personalise messages to them and retain that valuable behavioural data within a true Single Customer View database.

Now, every decade or so I have a singular thought, one that surprises me and sticks in my mind for some time. This decade’s thought waited to appear until mid-way through the seventh year of the 2010’s. “It’s the third Estate” was my thought, but although this originated in my own brain, it took some deciphering to work out what I meant.

The point I wanted to make in the webinar was that, in building a true single customer view, many people consider that there are only, when you boil it down, two types of data – online and offline. I think this is, if not wrong, then significantly misleading. If you read the database marketing press (and they should know, right?) you see them talking about online and offline data. The point I wanted to make is that this is far too simplistic, that there is a third ‘type’ of data that many organisations who build customer and marketing databases and claim to build single customer views do not accommodate – mobile data.

I do accept at this stage that we could boil data down to dozens of sources that would differ for every organisation out there, but that is not the point I want to make. I also accept that many of you will consider mobile data to still be online data, but hear me out… Because of the challenge in identifying mobile browsers, because of the specific requirement to ‘stitch’ together the various elements of the online customer profile through the use of a multitude of different identifiers, because of the unique challenge and opportunity this presents, then we need to think about it as a third area of data.

But before I expand my point I should probably explain the analogy, and I have to start with an admission… I really could not remember what the third Estate was and so I resorted to Google to remind me what I had learnt at university! Of course, as most of us know (and have forgotten) in pre-revolutionary France there were two ‘Estates’, also known as ‘Estates of the Realm’, the forces that governed society. These were the Clergy and Nobility. Then a chap called Sieyès argued that real power actually lies in the third estate – the people.

The analogy that my mind was unwittingly stumbling towards was that traditional database marketing was built on an edifice that one can liken to the original Two Estates. The clergy, in my analogy, was the offline data, built around a household de-duplication structure that bizarrely decrees that without a domestic address you don’t exist as a prospect or a customer… In the world of online marketing this is a seriously flawed perspective. Bolted uncomfortably on to the clergy in the governance of post-medieval French society was the aristocracy (for examples of the uncomfortable relationship look no further than Henry VIII and the dissolution of the monasteries – but I am in danger of digressing too far). Here my analogy is that traditional database marketing ‘de-dupe’ or customer identification solutions have tried to work by bolting an email address to a household record – another uncomfortable and ultimately failing alliance!

Well, we all know what happened to the concept of the governance of the Two Estates in France and subsequently around the world… (a few clues, Robespierre, the guillotine, the Declaration of the Rights of Man). And this is where I must bring my rambling analogy back to the point.

The current multi-channel marketing automation landscape cannot be optimised by organisations who continue to rely on this dangerously outmoded form of customer identification at the core of their SCV or marketing database. The concept that a customer’s (or indeed prospect’s) household address should be the primary key (with email bolted onto it) is no longer relevant. This type of approach simply cannot deal with the wealth and variety of online, mobile and digital data that makes up the real potential asset at your fingertips – your customer data.  

I want to expand this argument to cover three areas that are important to me. Firstly, the core inaccuracy of traditional database marketing customer identification (‘de-dupe’) techniques, secondly that building marketing solutions in 2017 focusing on historical data only is no longer fit for purpose, and thirdly that the real value in data for the future lies in that ‘Third Estate’.

Taking the first point, the inherent inaccuracy of a household based de-duplication. Systems based on such a limited number of identifiers could never efficiently differentiate between Joanne Smith, Jo Smith, J Smith and that remains the case today. Twenty years ago, marketers didn’t really care, you could just send the catalogue to that address and hope someone called Smith opened it. The solution, these organisations then went on to claim, was to bolt an email address to the household address. But multiple email addresses piled on top of inaccurate household data only confuses the situation further and whilst email is a key for a lot of online activity it is often poorly leveraged and does not open the door to mobile recognition, for instance.

The second point I would like to make in support of up-to-date customer identification solutions, is that the latest analytics are based on current data, i.e. how customers are engaging with your brand today, not what they bought two years ago. Historical data has its place… For instance, to calculate lifetime value one obviously needs historical transactional information. But current trends, for instance, towards predictive and machine learning, are based on the application of current behavioural patterns allied to historical data (putting it simply…). If your single customer view cannot track your customers mobile browsing activity (or indeed any browsing and engagement information from mobile to app) then you will never be able to leverage predictive analytics. I come back to the example of lifetime value. Traditional marketing databases that manage historical transactional information at a household level can give you a lifetime value calculation, probably down at segment level. But what they cannot do is forecast future lifetime value, at a business, segment or customer level, or drive insight in terms of the current behaviours that could influence an increase in that LTV.

And finally, I have to ask the salient question. If customers are increasingly active online (ComScore, for instance, say that 68% of all browsing is done on a mobile device), and if you agree that behavioural and engagement data is critical to customer understanding and up-to-date analytics as I do, then single customer views that do not incorporate this ‘Third Estate’ of data are increasingly anachronistic… just as the clergy and aristocracy were in the governance of France in the late 18th Century! It’s time for the guillotine…

You can get in contact with RedEye if you have any queries.

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