Every intelligent marketer throws terms like data activation around freely, but what does data activation mean, and where does it get applied?
Let's understand the critical stages for a growth marketer to understand data activation. The growth cycles have been generalized for the most common use cases and can be translated into various processes elsewhere. Keep reading to learn about the cycles of customer relationship management and how they are being affected by recent data changes.
The Three Stages of Customer Relationship Management (CRM)
There are three stages in general:
- Pre-registration: At the start where you/enterprise is wooing customers to sign up. There is zero-party data; you don't have customer first-party data willingly given to you.
- Conversion: A customer has trusted to share their first-party data but has not made their first purchase, also known as registration to first purchase.
- Loyalty cycle: A customer has made the first purchase, but the enterprise has yet to make a repeat purchase, cross-sale, or upgrade.
Most cycles above are very transferable to most businesses. In the marketing world, there are three funnel types:
- Pre-registration translates to "Upper Funnel' – Google and Facebook are beneficiaries.
- First purchase translates to "Mid Funnel" - Salesforce and Mailchimp are beneficiaries.
- Loyalty translates to "Lower Funnel" - Beneficiaries are FB Messenger, Kustomer.io, and CRM.
Most providers' activation channels are not locked into a part of the funnel. However, the impact of privacy has been felt at the top end of the funnels where customer data is being limited as cross-domain identity and 3P cookie identity go away.
Keys to Each of the Stages
There is a different customer identifier for each of the stages that drives the customer journey. At each stage, another customer identifier is vital to be successful.
Upper Funnel / Pre-Registration
In the upper funnel, the enterprise has an idea of what segments it wants to attract so they can convert them faster. However, at this stage of the funnel, the enterprise has little idea about the customer they bring to their site (as an example). They rely on channels like Facebook or Google to drive a customer to their site. When a customer engages, signals are passed back to Google or Facebook enabling them to understand how to tune the upper funnel to have the most optimal spend.
This is typically the most significant spend in all customer marketing. Some enterprises choose to use probabilistic data from providers like Liveramp, ID.5, etc., to acquire customers faster by reaching them more often, once interest is established. However, the rules for this game are changing quickly.
Mid-Funnel / Registration
In the mid-funnel, the enterprise has some trust with the potential customer, which can be used to drive conversion. Most companies will use email marketing for this purpose, or when a customer has downloaded an App (but not yet has an email), one can use push notifications to activate the customer.
This is not as expensive a stage, but this is where an enterprise starts to build trust, and the investment to get customers to this stage can disappear quickly . Some enterprises will use the email collected to retarget customers to reach them via non-email, push, or other channels.
Lower Funnel / Loyalty
This cycle is different from others; this is more about how an enterprise builds trust and repeat sales cycles. For PLG companies, this is the most challenging cycle, and knowing how the customer engages with the brand is essentially the deciding factor. Convenience, customer service, visitation, social media, etc., all play a role in this cycle.
Enterprises will use all channels here as the chance of an existing customer driving average revenue per unit (ARPU) is a better spend than acquiring new customers.
Changes with Privacy Headwinds Ahead of Us
As privacy headwinds, consent, and data zoning compliance come into play (besides the cookieless world ahead of us), the CRM cycles are getting impacted significantly. Here are some facts to consider:
- 3P cookies will be gone by 2023.
- 30% of the internet blocks cross-domain trackers.
- 40% of the internet limits cross-domain trackers (limited to 7 days).
These changes significantly change how the various CRM stages work.
Upper Funnel Impact
Without identity and cross-site trackers (3P cookies), the impact on the advertising industry is monumental. There is no easy way to identify a consumer on the internet anymore, and SaaS companies that track using cross-domain trackers are limited to a maximum of 7 days.
Without enterprises investing in their infrastructure, they are unable to track their customers for beyond seven days, or at all with ad blockers.
Mid and Lower Funnel Impact
With mid and lower funnels, the ability to track on an enterprise's customers on their sites beyond seven days (or ever) is still impacted by reducing the ability to know when customers are visiting you and limiting the chance to convert them.
This is a significant loss of revenue for the enterprise, and they cannot activate CRM.
Its Investment Time
It is about time to invest in building infrastructure that catalogs your customers, captures their consent, and enables building trust with them.
This will enable better retention, retargeting, trust, and significant upside in revenue. The loss of identity is not just an advertising tech issue, it’s a measurement, attribution, and eventually, an activation issue that needs resolution.
Today, you are already losing about 30-35% of your growth ROI, and you are likely not remarketing to your existing consented customers. The investment alone will more than pay for the change and save you from paying SaaS companies that are leaking revenue.
Talk to Blotout
Blotout enables a CDN to Cloud architecture that allows investment in your enterprise without needing DevOPS, data engineering, or vertical integration. You can book a meeting with Blotout Experts at https://calendly.com/blotout-experts or email us at sales@blotout.io to get started today.