We often talk about how a customer data platform (CDP) and first party data will help you know your customers better and allow for a smoother user experience orchestration. On the other side, what we do not mention as much is how your CDP can help you increase reach and find new customers within but also outside your ecosystem.
The following use cases, which include a propensity model, lookalike audiences, and a friends and family referral program, illustrate how you can leverage your CDP and your 1st-party data for quicker and more efficient customer acquisition.
CONTENT
- Use a propensity model to find high-value prospects
- Run a lookalike model based off of your best customers
- Launch a friends and family referral program
- Leverage your existing data for customer acquisition with a CDP
Use a propensity model to find high-value prospects
In your CDP, you will not only capture actual buyers of your brand but also potential prospects with no clear sign of purchase intent just yet. For the sake of this article, we’ll call them “agnostic” profiles. With a lack of strong data signal, it is often challenging to understand those users: what products would they be likely to respond to or what customer journey do they belong to? For instance, some profiles will be created based on a newsletter sign up or a visit without any specific product page view.
These so-called “agnostic” profiles can be enriched, or in other words made actionable, through predictive modeling. For customer acquisition, we tend to see a propensity model as the most effective method. What does that mean? You can leverage historical transactional data to predict the propensity of your prospect base to buy a product. The higher the propensity score, the more likely prospects are to perform certain actions and the more high-value these prospects will be. This will make them a perfect target group for your customer acquisition paid tactics.
A more advanced usage of predictive modeling will also refine “agnostic” profiles with crucial data points. You can run models that will provide you with, for instance, product recommendation, key customer clustering or even whether they have certain discount sensitivities. This will help you learn more about customers’ interests, which in turn will help you tailor messaging down the line. This way you turn “agnostic” data, without any strong business value, into valuable customer data.
Run a lookalike model based off of your best customers
Another way to increase reach based on your 1st-party data is to run lookalike models. Lookalike modeling is a technique that allows you to identify people who look similar to your selected and custom audience, based on a variety of factors, including:
- purchasing frequency
- average order value
- which products or services they purchase most often
- demographic data, such as their age bracket and location
Oftentimes, this use case will go beyond the walls of your CDP, as most advertising platforms allow you to find similar profiles to your most valued customers through lookalikes. In our case, let’s say your custom audience is composed of your best and most valued customers. The advertising platform will find similar profiles within their own environment. This will exponentially increase your reach among a key target with a higher likelihood to be interested in your brand. In other words, lookalike audiences will allow you to reach greater media efficiency by targeting at scale prospects who look and/or behave like your most valued customers.
Launch a friends and family referral program
Friends and family referral programs are a powerful strategy to use existing customer data for acquiring new customers. This strategy is most effective when it is rolled out among your most loyal, high-value customers, as they are the most outspoken advocates for your brand. The first step is to analyze customer behavior and identify a segment of customers that meets your requirements. By launching a friends and family referral program, you can offer both your existing customers and new customers a variety of benefits, such as discounts and/or free shipping.
One big advantage of a referral program is the high level of trust that’s associated with personal relationships. Even in the digital era, word of mouth is still excellent marketing for products and services. Offering your happiest customers incentive to share their experiences with friends and family, and getting certain benefits in return, has many advantages.
Leverage your existing data for customer acquisition with a CDP
A CDP can bring tremendous value for your customer acquisition efforts. It’s time to stop taking any guesses with 3rd-party data or data that your brand simply doesn’t control or own. Your 1st-party data offers you the confidence to respect users’ privacy and the guarantee of finding higher value prospects faster while being more efficient.
From a propensity model that calculates the probability of users taking certain actions to a referral program that benefits both existing and new customers: if you have the right customer data, there’s a world of possibilities to acquire new customers with the information you already have. Are you interested in learning how your company can make the most of a CDP?
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