Building customer loyalty and trust with a CDP

Take your CX strategy to the next level

By Fiona Hilliard.

4 minute read

Knowing that you have the chance to positively influence a customer’s perception of your brand with every interaction is what makes CX so powerful. Great CX attracts customers, impacts what customers buy, how often they buy, their customer loyalty, and lifetime value. In fact, research reveals that CX drives over two-thirds of customer loyalty, outperforming brand and price combined.

So how can you ensure that your brand’s CX is fulfilling its potential and driving customer loyalty? To do so, we need to examine the fundamentals of customer loyalty and how customer data platforms (CDPs) play a key role.

What is customer loyalty?

According to Gartner, customer loyalty is “the degree to which a customer is likely to continue doing business with an organization. Loyalty builds up over multiple interactions and is the result of customer satisfaction, positive customer experiences, and the value realized from using the organization’s goods or services. Customer loyalty also drives existing customers to select one company’s products or services over its competitors, yielding collateral benefits for retention, growth, and brand advocacy.”

Retention. Growth. Brand advocacy. Sounds like the ultimate wish list for any brand, right? But these are real and achievable goals, actionable through the data already available to your organization – all you need is the right key to unlock its potential. Effective customer data management plays a vital role in this process. Hello CDP.

How does a CDP drive customer loyalty?

A customer data platform or CDP is a prebuilt system that centralizes customer data from multiple sources and shares this data with other systems within an organization’s martech stack, enabling marketing teams to deliver exceptional customer experiences on all channels. CDPs help to drive growth and loyalty by:

Eliminating data silos

Siloed data inhibits growth by making it difficult to get an accurate, integrated view of customers and their interactions with a brand. Unifying and organizing previously fragmented and siloed data across various channels and touchpoints means marketing teams can glean deeper insights into customer behavior and plan the types of relevant, personalized campaigns that drive loyalty.

Identifying high-value customers

Using the CDP’s advanced segmentation capabilities, organizations can break down data into specific customer segments based on demographics, product preferences, and historical and predictive data. By identifying and segmenting high-value customers, marketers can prioritize this lucrative segment and tailor interactions accordingly by offering premium, relevant experiences at every touchpoint.

Identifying at-risk customers

At-risk customers are just as important to a brand as high-value customers, especially when you consider that it costs between five and 25 times more to acquire new customers than retain existing ones. A CDP allows you to identify the common characteristics of customers at risk of churn and leverage machine learning (ML) and artificial intelligence (AI) to create lookalike audiences and create predictive models to detect those with similar profiles within your customer base. It’s then possible to segment this at-risk group – and develop retention strategies to prevent future churn.

Providing a complete view of customer behavior

Providing a complete view of customer behavior means organizations can action the most relevant customer experience possible – vital when you consider that 64% of customers expect tailored engagement based on past interactions.

Understanding customers in real-time

CDPs connect with new data sources seamlessly and update profiles and segments in real-time. Storing a customer’s cross-channel behaviors, interests, transactions, and preferences in one place allows teams to create the most effective strategies and campaigns based around acquiring new customers, retaining existing customers, upselling, and cross-selling.

Supporting privacy preferences

A CDP allows organizations to take a “privacy by design” approach to data by collecting and storing data with PII (information such as names and email addresses that can be used to re-identify anonymous data) or non-PII configuration (typically collected by browsers and cookies, this information is anonymous and cannot be used to trace the identity of an individual). This GDPR compliant approach builds trust by ensuring customer privacy preferences are supported and data is kept safe and secure.

Turning customers into brand advocates

When it comes to loyalty, it pays to personalize - 70% of consumers say that how well a company understands their individual needs impacts their loyalty. And these satisfied customers are likely to spread the word – statistics show that 72% of customers will tell six or more people if they have a satisfying experience. So, it follows that brands who invest in a CDP and get their personalization strategies on point can not only look forward to increased customer loyalty, but also lower acquisition costs in future. Win-win.

Discover more about Sitecore CDP.

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Fiona Hilliard

Digital Content Manager,

Sitecore