Know your customer: How to personalize with identity resolution and why a CDP helps

May 16, 2022 | 7 minute read
Michael McNichols
Senior Content Manager
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TL; DR: Learn the ins and outs of identity resolution and how a CDP helps.

  • Identify your customers through a myriad of different online behaviors
  • Improve segmentation, attribution, and analytics
  • Comply with regulations and consumer privacy laws

What is identity resolution?

Your many touchpoints feed you huge amounts of often confusing, disparate data. It can make organizing and putting this data to good use extremely difficult.

Imagine:

  • A beginner signs up for yoga classes in person. Then they buy a yoga mat online using their yoga school account. A few days later, they purchase yoga blocks on the same site but checked in as a guest.
  • Someone excited about the upcoming Sandman TV series, based on the critically acclaimed comic book, watches the episodes on Netflix. The next week, they buy several digital versions of the comic and order a Sandman shirt from another site. A month later, they purchase a hardback, special edition of the comic book at an actual store.
  • A person joins a Brazilian jiu-jitsu school in person. They sign up online for  kickboxing lessons in another part of the city. They take both in-person and online classes. They buy their gear for both martial arts from a variety of sites and sporting goods store. Sometimes, they use their own online accounts and other times their live-in partner’s.

The number of smartphone subscriptions in the world today exceeds six billion. However, people tend to own more than one mobile device or a mobile device and a computer.

In April 2021, the Pew Research Center found that 97% of Americans own a cellphone of some kind. Also, approximately three-fourths of Americans own a desktop or laptop computer, and about half of Americans own a tablet.

According to Statistica, 52% of adults in the US own an e-reader.

Customers use different devices, channels, and apps at different times for various reasons. Sometimes, they use their own accounts or check in as guests. They also go to stores in person as well.

In fact, many will go on an app or a business’s website before going to the store. Some will go on the app or website while at the store.

The tsunami of data this creates can make it exasperating to pinpoint just who customers are and what they want, especially when some of it is anonymous.

How can you understand how to help customers if you can’t make heads or tails of what their behaviors mean and who did what?

Identity resolution solves this problem. It helps you identify your customers across a vast sea of data to understand them better and anticipate their needs.

Why identity resolution?

Data is useless if you can’t understand and put it into context.

Once you’ve identified your customers, you can keep track of their online and offline interactions with your brand. You can connect this data to create a single view of your customer. With this customer profile, you can:

  • Look at their previous behaviors
  • Learn their interests, preferences, and needs
  • Craft meaningful interactions based on this information

What channels do your customers frequent? Which content, events, and offers pique their interest? What messaging, deals, and purchases bring them back to do business with you time and again?

Your customer profiles give insights into the type of experiences your customers want across marketing, service, sales, and commerce.

Benefits of identity resolution

The valuable information and insights in your customer profiles can boost your:

  • Segmentation and targeting – Send more relevant messages and offers to the recipients most likely to respond on the channels they prefer
  • Attribution – Know which touchpoints are working better than others and for whom
  • Analytics – See what in your customer journeys needs improvement and what doesn’t

Altogether, a singular view of customers indicates how to personalize your outreach to them and make it more accurate. After all, you don’t want to personalize the wrong way to the wrong person.

Personalization and relevance act as the main drivers in exceptional experiences that result in:

  • Higher engagement – Get customers to interact more with your brand
  • Stronger customer loyaltyRetain customers and turn them into brand advocates
  • Increased ROI – Create more opportunities for conversions, upselling, and cross-selling

Identity resolution challenges

How useful your customer profiles are depends on the quality of your data. If your data is murky and lacking, you’ll have an unclear picture of your customers. How can this happen?

  • Poor data management

Storing and working with enormous amounts of data is a difficult, laborious task. The sheer volume of it can overwhelm you, let alone trying to connect different behaviors and data to different customers. Plus, data siloes across your business can keep you from linking data together in the right way to develop actionable customer insights.

  • Incomplete information

Problems with analyzing and understanding your data can lead to gaps in your customer profiles. Not all data is relevant and useful as well. If you can’t clean and organize it properly, you won’t know how this information can improve your interactions with customers.

  • Data privacy concerns

The third-party cookie is going away. Customers are also sensitive to the data they offer to businesses and how it’s used. Plus, you must comply with data privacy laws, such as the:

If you don’t, you’ll face hefty fines and a lack of trust among customers.

Difficulties in implementing identity resolution

A further challenge awaits in how you implement identity resolution. Typically, you have two options on how to implement:

  • Probabilistic

This approach makes connections in data based on the probability of a customer performing a certain action. Sometimes, it comes close to guesswork and tends to be low in accuracy. However, it can work well with a broader and wider outreach.

  • Deterministic

On the other hand, this approach works with what you can determine about customer actions. It is high in accuracy and helps with more focused and specific outreach.

Which approach should you choose?

It depends on your outreach (broader or narrower) and if you’re using the right identity resolution solution when working with your data.

What is the right identity resolution solution?

The right identity resolution solution—a CDP

A customer data platform (CDP) takes in information from a multitude of sources (including a CRM and DMP) and stores it in a central location. It connects, cleans, and organizes data from all across your business. It breaks down data silos and aligns marketing, sales, service, and commerce with shared information and a more complete view of customers.

With a CDP, you can:

  • Improve data management and storage
  • More accurately pinpoint who customers are and build profiles for them
  • Continually enrich these profiles with new data that indicates how you should add personalization and relevance to your customer outreach
  • Use your profiles and information to enhance your segmentation, targeting, attribution, analytics, messaging, content, offers, and more
  • Build better experiences with connected data and the more in-depth insights it provides

According to a survey by the CDP Institute from late 2021, 88% of respondents said a unified customer view was the top benefit. 54% said analytics was.

Both a unified view of customers and analytics play considerable roles in helping with identity resolution.

Learn how to make your customer data more effective with a CDP.

Implement a CDP and build trust with customers

A CDP allows you to take either a probabilistic or deterministic approach to implementing identity resolution. Its linked data put together the actions customers took online and off. Those insights allow for a broader, more expansive type of customer outreach (probabilistic). However, a CDP works even better with a narrower, more focused, and specific outreach (deterministic).

Moreover, using a CDP means linking all your customer data together. This helps you better manage that data and consent (what customers have given you permission to work with what information about themselves).

Siloed data makes it possible for you to miss out on an important detail and use data the wrong way or without a customer’s permission.

With connected data, you stand a better chance of not making such a critical mistake increasing transparency and visibility across your business.

So, with a CDP, you can:

  • Alleviate data privacy concerns
  • Build trust with customers and improve your brand’s reputation
  • Comply with the law

Find out more about CDPs, identity resolution, and connected data.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael McNichols

Senior Content Manager

Michael McNichols is a Senior Content Manager for Oracle Digital Marketing. He has over ten years of experience in professional writing and has been widely published.


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