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Privacy Legislation and an Anti-cookie World: Is This an Obstacle or Opportunity For Revenue?

Sharing customer data or consent for cookies is important for businesses to protect their goodwill in the markets. Is This an Obstacle or Opportunity For Revenue?

With new state privacy laws coming into play next year, it’s important for businesses to ensure they become compliant before these take effect. New data protection approaches require that you get consent to collect personal data, inform your audience if you pass on their details to any third parties and give people the right to delete any of their personal data. To ensure you can comply with all of these requirements, customer data storage and processing should be a part of manageable, centralized process.
Another important update is Google’s third-party cookie deprecation. The change was supposed to be introduced by the end of 2023, but the deadline has since been pushed back another year. This is ultimately an attempt to give businesses more time to work out new approaches to developing their marketing in an altered, more private digital environment. As soon as third-party cookie deprecation comes into effect, companies will no longer be able to use cookies for remarketing purposes or to identify their customers – meaning that systems will not recognize website visits from the same person and will instead interpret each session as a visit from separate individuals. For businesses that have an online store, app and offline stores, identifying customers who have not presented their phone number or email address during the session will become impossible.

How to Comply with the New Restrictions and Get the Most out of Them

To ensure your business is compliant and be able to provide personalized offers for different customers (by determining which customer records or a web session belong to the same person), you’ll need to centralize your data. The solution to this is a unified customer profile.

Brands can create centrally stored unified customer profiles using the company’s IT team resources or an outsource development contractor, but this is resource-intensive and challenging to maintain. Alternatively, they can deploy a customer data platform (CDP) solution that allows them to store customer data from an unlimited number of data points in one place and create more effective, personalized communication in omnichannel campaigns, resulting in better retention. Surveys show that 56 percent of customers stick with brands they believe “get them.” When combined with the fact that a mere 5 percent increase in retention can result in a 25 percent increase in profit, the case for using a CDP grows stronger.

Solutions that enable companies to build customer golden records, such as customer data platforms, will become essential in the new privacy landscape. The good news is that a unified customer profile also helps you with a lot of other aspects of your marketing – from marketing tests that can be carried out faster thanks to data centralization to reduced costs thanks to automation and more revenue from personalized offers.

On each of these aspects below when we take a look at what brands like Crocs, Metro C&C, and Burger King are doing with their marketing and customer data.

A Unified Profile Makes Relevant Multi-channel Communication Simpler

Creating a unified customer profile merges all of the data about an individual into a single, accessible data set that can be used to set up precise targeting across channels. Things like website personalization, segmentation and a consistent user experience all contribute to better retention and reduce feelings of spam.

Having access to a complete history of interactions with a customer allows you to figure out the best timing for a personalized offer as well as decide when this should be avoided and whether the customer should be excluded from campaigns. Crocs Eastern Europe, for example, used to send out email blasts to their entire audience on a weekly basis. Online purchase history, offline purchases, emails, SMS and web push notifications were all stored in different systems.
As a result, their marketers did not have access to a single source of data that would enable them to send campaigns that took purchase history into account. Customers could receive emails that, for example, promoted Crocs that they’d purchased the day before. What was even worse was that each customer could receive the same campaign in different channels simultaneously. This was because the brand’s systems considered different customer contact details such as their email address, web push subscription and phone number to be data belonging to separate clients.

This is why Crocs decided to switch to using a CDP – it enabled them to store customer profiles in one place and send fewer campaigns that were far more effective thanks to a more personalized approach that now included elements such as personalized recommendations and relevant offers for their next purchase.

Trigger-based web push notification aimed at getting a customer to enter their email address. As each customer’s info is stored in a unified profile, the system can identify which customers’ email addresses are missing and send them web push notifications.

Their next step was getting rid of bulk campaigns in favor of workflows that use interest-based segments. For example, customers that purchased a pair of Crocs would get campaigns with recommendations for accessories. This generated an extra 10% of revenue from campaigns in just two months.

An example of a trigger-based omnichannel workflow

A CDP Allows You to Make Highly Personalized Offers Based on  Customers’ combined Online and Offline Behavior

Imagine a scenario where a customer searches for something online, like a vacuum cleaner. They find it in your online store and share their email for communications but end up purchasing the vacuum in one of your physical locations instead.

Without a unified customer profile, it’s impossible for the online arm of your business to know about the customer’s offline purchase.

This results in wasted marketing dollars sending irrelevant promo codes and retargeting ads, and it can be annoying to the customer because they’ve already made the purchase. They may even become upset if your customer recovery communication chain ends up with offering discounts right at the moment after they’ve already bought the item in the brick-and-mortar store and paid the full price.

To avoid a “double loss” (i.e., losing loyalty over spam communication and losing marketing budget by offering irrelevant discounts), marketers can use a CDP to track customer interactions and draw from a much larger pool of data to decide when and how to provide promos.

Metro C&C, a big box retailer, used to communicate with customers using only bulk email campaigns. Their website was not personalized for different visitors based on their segment, their web push notifications could not take purchase history into consideration, and mobile push notifications were sent simultaneously with email campaigns, without any kind of segmentation.

Implementing a CDP helped the brand market more effectively by tracking things like whether or not a customer read a mobile push notification (no need to bombard them with email and SMS if so) and their purchase history with the store. This single change nearly doubled the share of revenue from CRM communications in total e-commerce revenue from 11 to 20 percent.

Metro’s omnichannel cascade workflow with an email, web push notification, and mobile push message – the customer receives the message via their favorite channel

The brand now stores a full history of their interactions with customers, subscription info, and devices used in one place. Customers receive campaigns via the channel that’s most convenient for them. All of Metro’s communications, including emails, texts, web push notifications, website personalization and promo code campaigns, fit into one workflow and are constantly being improved using A/B tests. This allows Metro’s marketers to test dozens of approaches without having to switch between different systems or calling developers for help. This means more campaigns can be launched with less time spent.

Over the course of a year, marketing specialist of Metro C&C launched more than 200 automated campaigns with promo codes. For example, if a customer ended up in the churn segment, they would get a promo code with a 10% discount for their next purchase.

This is what a communication workflow covering four channels looks like at Metro C&C

Seamlessly Merging Communications and the Loyalty Program

Customers expect a consistent user experience across all platforms, and brands delivering this seamless experience see much higher retention rates, especially if they offer a loyalty program. Research shows that 70 percent of consumers will recommend a brand with a good loyalty program, and customers who feel emotionally connected to a loyalty program spend up to 27 percent more than non-members.

One example of this is Burger King’s relaunch of a more personalized, gamified loyalty program to improve digital channel turnover. By analyzing customers’ data, they were able to determine that loyalty program members spend more than regular customers who have not yet joined the loyalty program. In six months, regular customers who received personalized offers spent 52% more money than those who didn’t receive any promotions.

Gamification increases customers’ retention rate

Based on the data Burger King collects, the marketing team gets insight into their customers’ favorite meals to create personal offers they’ll love. These can be promo codes for specific dishes, extra bonus points for a bigger purchase, or more frequent rewards for frequent customers.
Burger King marketers can access their customers’ entire purchase history and order contents from one window – whether this data is from the app or offline kiosks. Based on this data, the marketers create segments to test various marketing hypotheses and come up with new strategies.

An example of what a loyalty program dashboard might look like

Before their mobile app and CDP implementation, Burger King’s marketers did not collect any of their customers’ data, meaning every purchase was anonymous. Because of this, their marketing efforts were limited to bulk campaigns and printed coupons.

Printing coupons in bulk is an easy, albeit not the most flexible, option. The process required several weeks of work because the team had to come up with an offer and then design, print, deliver and distribute the flyers. But even after all this effort, the offer was still a “one-size-fits-all” solution that could not appeal to different customers’ interests.
They needed to understand their customers and their preferences, create personalized offers, and then deliver these offers via the channel that works best for each audience member – no matter if this is email, SMS, or mobile push notifications. This is why the team decided to implement a CDP.

Instead of sending out coupons in bulk, Burger King decided to focus on personalized offers that take the customer’s history into account. For example, here, a customer that has not made a purchase in a while gets 100 bonus points towards their next order.

Personalizing Offers Based on Interaction History with the Brand Boosts Conversion Rates and Reduces Churn

Customers are inundated with promotional texts, emails and push notifications. Instead of allocating more resources to try to make your brand heard over the competition, deploy a CDP to merge all communication channels into a single system.

This one change can improve campaign efficiency by up to 35 percent, as demonstrated by the success story of Jivo’s impressive marketing overhaul. In addition, the right CDP solution can cut the necessary resources for effective communication down three times on average.

Bulk digest helps users learn about Jivo product updates

It also allows for more personalized messages specifically sent via a customer’s preferred communication channel, decreasing spam levels and making customers happier. For example, brands can send emails about product availability based on browsing history or push notification reminders about an abandoned cart. If these tactics are ineffective, brands know it’s time to retarget the customer and possibly give a special discount code that works both online and in-store.

Strategies like this can significantly reduce the number of unsubscribes a brand receives. In the case of Independent Media (the publishing house for Cosmopolitan and Esquire magazines), unsubscribe rates dropped by over 70 percent, and the process is completely automated.

Improve Marketing By Choosing the Right Time to Act

New state laws demand that businesses adopt a transparent approach to the way they store their customers’ data. At the same time, Google plans on going forward with its third-party cookie deprecation. In light of these upcoming limitations, companies need to centralize customer data and ensure they collect more solid identifiers such as email addresses and phone numbers.
These are not just solutions to help brands appease policymakers – a centralized hub for customer data unlocks an infinite number of new possibilities for your marketing. A CDP becomes your single source of truth, allowing you to evaluate the impact of your marketing and launch omnichannel workflows and trigger-based sequences that take customers’ interests into account (as demonstrated by Crocs and Burger King above). Furthermore, knowing your history with each customer and their online and offline shopping habits allows you to create more personalized recommendations on your website and in campaigns.

Economic recessions are always full of doubt and uncertainty, which often leads customers to be much pickier about how and where they spend their money. Personalization helps create a stronger connection with your audience, reducing the amount of spam they receive and improving their overall impression of your brand.

Implementing the right CDP allows brands to analyze merged customer data and track the right moments for communication via preferred channels. This can increase AOV by up to 50 percent and customer LTV by 10 percent, as demonstrated by United Colors of Benetton’s revamped loyalty program.

Customer data platforms are an excellent way for brands to make the most of their marketing strategies during the downturn by increasing the effectiveness of customer communication, improving retention rates and setting up ideal scenarios for boosted revenues and repeat business.

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Ivan Borovikov, Founder and CEO at Mindbox
Ivan Borovikov, Founder and CEO at Mindbox, an international cloud-based marketing automation platform. Ivan is a serial entrepreneur with 20+ years of experience in business management and development, operations management, and data-based marketing.
A professional doctor by training, he launched his first IT business in 2002. Established in 2006, his company Mindbox was named #1 Marketing Automation tool in Eastern Europe by Cnews Analytics (top IT research agency). Ivan is a recognized professional and expert in IT, marketing automation, SaaS, and eCommerce, who regularly speaks at international tech events. Ivan was shortlisted for the Ernst and Young “Entrepreneur of the Year” award.
One of Ivan’s missions is to popularize conscientious and responsible communication of brands with customers through holistic and effective cross-channel campaigns and personalized promotions.

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