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Breaking the Cookie Habit

Breaking the Cookie Habit

/ Operations, Strategy, Customer Experience, Technology
Breaking the Cookie Habit

Cookie-based customer data collection is crumbling, but are companies ready?

For decades, many companies have used cookies to gain insights into their customers; it is one of the most prevalent tactics to gather customer data. This approach has proved to have several issues, including privacy, but it will no longer be an option.

Safari and Firefox already block cookies by default and Google announced that it would eliminate third-party data from its flagship Chrome browser, yet many businesses still haven’t prepared for a world without cookies, which is set to become a reality by the end of 2024.

Recent Twilio research found that companies are still extremely reliant on cookie data today, despite the impending ban. Over 80% of companies have built their customer engagement infrastructure on cookies, becoming too comfortable with basing critical customer interactions on data that can quickly become outdated and can often be unreliable.

Business survival today is contingent on the ability to deliver the kind of highly-personalized experiences that consumers have not only come to expect, but demand. The shortcut to personalization businesses have been taking for decades will no longer exist by the end of next year, so the time is now for businesses to rethink their customer engagement strategies.

The Great Disconnect Between Brands and Customers

A company’s customer engagement is only as good as the quality of its customer data — and that presents an issue when the quality of third-party data is so low.

Low-quality data results in low-quality customer insights, and it’s clear that cookies fail to provide the level of customer understanding needed to deliver a satisfactory experience. Consumers aren’t even satisfied with cookie-powered experiences: 82% of companies believe they offer personalized experiences, but less than half of consumers agree.

Privacy is another important component. Customers are tired of having their information taken and sold to the highest bidder, and trust between customers and brands is deteriorating because of this. 71% of consumers say they want better data privacy from brands, yet only 65% of consumers believe that companies are protecting their privacy.

Delivering personalization while protecting consumer privacy is a challenge for every company, but one that simply must be overcome.

With more than half of U.S. consumers claiming they’d stop doing business with a company after a frustrating customer experience (CX), it’s now or never for businesses to rise to the challenge to provide personalized experiences and regain the trust (and business) of their customers.

With the continued shift towards a privacy-first internet, businesses have an opportunity to finally develop a customer engagement strategy that puts the customer and their privacy first. This means giving customers the ability to opt out of data collection at any time and being transparent about how they are using customer data.

Delivering on the Promise of Personalization

The importance of delivering personalization isn’t lost on most businesses — 88% of companies say personalization is extremely or very important to their customer engagement strategy. Why, then, are so many of them struggling to actually deliver personalized experiences? The hurdle lies in the backend infrastructure.

Businesses are up against two big challenges in optimizing their backend infrastructure for personalization: siloed data and communication channels.

Third-party data, by nature, comes from a wide variety of sources, many of which businesses don’t have direct visibility into. This means the customer data coming from these sources is inherently disconnected.

In relying on third-party data, businesses allow a middleman to come between them and their customers. So, it’s very easy for businesses to fail to recognize whether these pieces of information are relevant or accurate until it’s too late, and customers are left feeling misunderstood and unheard. Delivering exceptional CX requires a deep, inherent understanding of a customer.

Moreover, many businesses have failed to equip those on the front lines of their CX – customer service representatives – with the data they need. Only 48% of organizations are capturing data that drives context-based customer engagements. Disconnected data can only create inapt and inconsistent CX.

This lack of connection further extends to communication channels. Most businesses take a multichannel approach to engaging with customers; after all, offering personalized experiences means meeting customers on the channel of their choice – webchat, SMS, video, and voice calls.

But multichannel communication is siloed, making it difficult for representatives to have context on customer relationships that have been formed on other channels.

For example, a representative on the phone may have zero background on a prior email exchange with the customer they’re speaking to. This forces customers to repeat themselves each time they engage with a brand, which causes friction and frustration for both customer and representative.

Bottom line: unifying communications in an omnichannel approach is key to getting all the context needed to deliver excellent CX.

It’s All About Data: Putting It Into Action

There’s no better way to understand your customer than to build a direct, 1:1 relationship with them. That’s why shifting from a third-party data strategy to a first-party data strategy is so essential. Best of all, companies already own this data.

Unfortunately, most businesses just haven’t put it to productive use. That is, they haven’t collected, synthesized, or presented it to representatives so they can refer to it during customer interactions.

A first-party data strategy offers a comprehensive, single view of the customer, while omnichannel communication tools give companies the context they need to connect with customers in whichever way they prefer.

With these two ingredients, personalization is possible at every single interaction across the customer journey, from sales to marketing to service and support.

Businesses need to understand that personalization isn’t a one-and-done deal — it’s an ongoing curation and set of practices that needs to be reinforced internally and externally to maintain the quality and relevancy of your customer engagement.

Data that’s collected directly from every single customer touchpoint, then unified and fed into a central repository like a customer data platform (CDP), eliminates much of the mystery of the customer journey.

With a CDP, data is transformed into a holistic view of a customer’s entire journey. Not only that but the data also becomes actionable. Representatives are able to access the data they need to not only personalize CXs in real-time, but to learn from past interactions in order to improve future ones.

For example, a representative notices that a customer who has previously ordered a product every four months has not yet made their order, and offers that product mid-conversation. A clear view of a customer’s journey allows a representative to anticipate a customer’s needs. These actions can also be automated by serving up reminders on a preferred channel and on a timely basis.

Omnichannel plays a role in creating a comprehensive view of the customer as well. Just because a customer connects with a contact center via multiple channels does not mean that their experience is omnichannel.

Multichannel contact centers are still siloed, which limits the level of service representatives can provide. But with an omnichannel infrastructure, representatives see the entire customer journey through real-time dashboards. They’re able to multi-task and interact with customers asynchronously.

As a result, customers will receive the same personalized experience regardless of channel or previous interactions. Arming representatives with a full view of the customer empowers them to create service experiences that are unique to a specific customer’s preferences and history, encouraging customers to return time and time again.

Time To Let the Cookie Crumble

The clock is ticking on the old way of connecting with customers. Third-party cookies will soon no longer be an option and siloed communication channels simply can’t meet the sky-high demands of today’s customers. What is perceived as a challenge is in reality an exciting opportunity to capture the hearts and minds of your customers and offer fresh, unparalleled experiences.

The time is now to optimize your infrastructure for personalization. Businesses that deliver the best CX – that truly know their customers and personalize every interaction – will win in today’s digital world.

Investing in first-party data and adopting an omnichannel communications approach are two important steps to getting there. Now is the time to break the cookie habit and make way for new, more secure experiences.

Vacasa’s Personalization Success

Vacasa is a leading North American vacation rental management platform: and is a great example of a company that has optimized for personalization via successful first-party data strategy.

Vacasa’s marketing analytics team had realized that their existing analytics service had limited capabilities when it came to collecting data and providing insights on how customers were using their website. This meant that they were limited in their ability to properly formulate effective marketing strategies and were unable to measure the success of their preexisting campaigns.

A robust revamp was required to access customer data and automate complex tasks, all while providing truly omnichannel support and scalability. Vacasa knew that a customer data platform (CDP) was necessary to gain insight into how customers were interacting with their site in real-time and inform their tactics.

By investing in a CDP, Vacasa’s marketing analytics team was able to unify their customer data and establish a source of truth to make better business decisions using first-party data from various touchpoints, as well as build more intelligent marketing and lifecycle campaigns.

Vacasa representatives are now able to access text messages, emails, site reservations, and more all in one place, allowing them to form strong customer relationships with both home guests and owners by personalizing engagements across the board.

Email marketing campaigns sent to 500,000 recipients consistently reached over 21% open rates, performing well-above industry benchmarks. This has paid dividends, with Vacasa seeing a 3x-10x increase in guest bookings.

Simonetta Turek

Simonetta Turek

Simonetta Turek is the General Manager of Customer Experience Products, Twilio. Prior to Twilio, she worked at AWS and has a long career in enterprise software and communications, with extensive knowledge of the customer engagement space. She is a seasoned, customer-focused senior software executive with managerial and entrepreneurial experience in the U.S. and abroad.

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