Optimizing Acquisition and Retention Costs with CDP

Scal-e has just been listed in two reports by the Forrester International Research Institute : “Now Tech: Customer Data Platforms, Q4 2021”  Asia Pacific (APAC) report, and “Now Tech: Customer Data Platforms, Q1 2022” world report. The marketing & technology French Blog Martech.cloud took advantage of the launch of the new Scal-e website to organise an interview.  

Scal-e´s CEO Christophe ALVES spoke with the Martech.cloud about the company since its takeover in 2018, he discussed Scal-e´s strategy, the evolution of the market, its team and his vision of the company’s future.

This article is the first of a series of 5 entries published throughout 2022. Find the links to all the articles at the end of the page at the end of the summer.

Martech.cloud : How do you see your customers saving on acquisition and retention costs using the Scal-e platform?

Christophe Alves : Without the customer consent, the data no longer has any value for a brand. Scal-e platform uses its CDP and its Privacy module to allow marketing teams to maximize the use of their customer data.

The ability to segment, personalize and recommend capabilities are the first advantages to improve brand results. If you target more precisely and improve the quality of your content or recommendations, you will improve the impact of your campaigns on your audiences. For example, we have brands in retail that personalize millions of emails every week and have an annual average open rate of 40% on the email channels, compared to a 10% average of their direct competitors.

Another advantage is being able to communicate through all the channels used by the customer. Every agency and every brand talks about following the customer journey and personalizing the customer experience at every touchpoint. However, if the customer is at the heart of a brand’s strategy, why not integrate all the channels chosen by their customers? Often, these are technical limitations and linked to a classic after-sales service or marketing automation tools that only offer certain communication channels: email, SMS and sometimes push. At Scal-e we aim to help brands follow their customers across all channels. Whether they are relational or transactional channels, such as e-mail, SMS, push, print, fax, mobile wallet, seller channel (point of sale or after-sales service), but also conversational channels which are more present in the daily life of customers such as WhatsApp, Messenger, Telegram, WeChat and all social networks such as Instagram, Facebook, Twitter, YouTube, etc.

We currently offer more than 30 channels, natively integrated with Scal-e. Our philosophy is to use each project to identify new channels and include them in our offer as a new available channel for our clients. With the aim of reaching their customers on all their preferred channels.

Martech.cloud : You have many interesting topics and congratulations on your 30 channels already integrated. Regarding communication channels, what is the last channel identified by your teams?

Christophe Alves : That would be Discord, I don’t know if you use it? But in the world of gaming or cryptos (web3), it’s a bit of a “must-have”, in addition to Telegram that we already have integrated. We have already had questions on this subject but no concrete requests. We are currently building a use case with a web3-oriented agency (token, NFT, Decentralized Identity’s “DIDs”). When this will be signed, it will be our first project using the Discord channel.

Martech.cloud : No, I don’t use Discord, but I will investigate it. Back to your CDP, for non-experts, could you tell us what a CDP (Customer Data Platform) is, in simple terms?

Christophe Alves : I understand there are too many acronyms and many technical definitions, and some acronyms are not used wisely, which can make it difficult for brands to navigate. That’s why it is important for Scal-e to be recognized by actors like the CDP Institute*, Forrester* and hopefully Gartner soon. To facilitate the readability of our offer but also to participate in the promotion and progression of the market.

A Customer Data Platform is made to create B2B or B2C customer profiles or also known as a 360° customer view : it would be all the information we have on a customer, which enables us to implement acquisition and loyalty strategies based on customer knowledge. A brand must communicate differently with a new customer and an ambassador customer; therefore, brands need a tool to unify all customer knowledge that facilitates daily use. In other words, a CDP is a solution that makes it possible to easily collect, clean and unify all the customer data that marketing teams need, it also allows companies to update easily the data, and share this data with any tools that would need it.

Customer Data Platform and Loyalty Program: Use Cases

Martech.cloud : Okay, can you give us an example of using a CDP ? Maybe linked with a loyalty program?

Christophe Alves : Of course, let’s imagine a brand that would like to reward its top customers with a digital voucher for expressing their passion for the brand on social media (Instagram, Facebook, Twitter, etc.)

This is a common question in the age of social selling; however, it is not that easy to implement. To achieve this, the brand would have to:

Step 1: Build an RFM score allowing them to know who their client ambassadors are. The CDP will play an important role here, as the score will be based on all the elements merged in the CDP. I am speaking about one score, but you may need to create more than one. Let me explain, if a brand has several product ranges, with different purchase frequencies and amounts. It may be in their interest to make an overall RFM score and multiple RFM scores due to their range of products, to refine their customer classification and better understand the cross-selling potential.

Martech.cloud : Can you remind us of what RFM means?

Christophe Alves : RFM (Recency, Frequency, Monetary) is a simple scoring system that allows you to set up better customer population segments and identify customers: with potential, at-risk or addicts, etc. Enabling you to communicate and reward customers differently.

Martech.cloud : Can you explain the reason for several RFM scores and give us an example, so we can better understand the cross-selling capacities and segmentation of populations (new, at-risk, ambassador, etc.)?

Christophe Alves : For example, let’s take a brand selling smartphones and smartphone cases. A customer who buys a smartphone every 2/3 years is a customer who will appear as an ambassador. On the other hand, a customer who changes their phone case every 2/3 years could be considered a potential customer and not an ambassador as with other customers who buy a case every 3 months.

It is necessary to implement a frequency score depending on the type of product. Meaning, that you must make a score that is adapted to the purchase frequency of smartphones and another score adapted to the purchase frequency of covers for smartphones allowing you to compare different purchases. Also, you need to differentiate the amount scores as a smartphone cost much more than a case.

The question for each brand is whether they want to consider all their customers. Because with an overall score for all products, in my example we consider a customer who has only bought a smartphone once and may never buy again as an ambassador customer and neglect a customer who buys a phone case every 6/9 months has a lot of potential.

Martech.cloud : Now that it is clearer, what would be the step 2 of using a CDP while implementing a loyalty program?

Christophe Alves : Step 2 : would consist of feeding the CDP by the company’s various social media to retrieve all the posted comments and link them to the correct contacts.

The Step 3 would be to connect a loyalty engine to the CDP so that the loyalty engine can allocate a voucher according to the criteria set e.g. if they commented on Facebook and Instagram then they would get a voucher.

Martech.cloud : If I am understanding the natively integrated part of Scal-e does this mean a brand can replace all their solutions by Scal-e?

Christophe Alves : Yes and no.

Yes, in Scal-e we have all the necessary modules natively integrated to replace them. However, it’s not mandatory for a brand to replace its existing solutions.

As our strategy is to limit the impact on the client’s IT architecture. So, the idea is to adapt to their existing solutions to complement and improve their effectiveness.

Customer Data Platform and Unification of Online and Offline Data: Use Cases

Martech.cloud : Can you give an example of using a CDP with another module?

Christophe Alves : Sure, I was talking to a brand that sells jewellery in stores and on their e-commerce website, they have been struggling to consolidate their different loyalty programs. The brand cannot offer the same customer experience in-store and on its website. The points customers obtain in-store and on the site are difficult to attach to the same loyalty account and sometimes members have 2 loyalty accounts : one in-store and one online. Even worse, prepaid cards, promo codes and discount coupons only work on one or the other in-store or online.

So, in addition to restricting their members, it is financially inefficient as the company could generate several times the same discount coupons, as the have duplicates profiles in their system.

Long story short, the company was asking us to unify their two loyalty programs without disrupting their current infrastructure. We offered them the ability to keep their store loyalty program and the e-commerce loyalty program, and simply connect them via our ETL to our CDP and to our loyalty engine. Our loyalty engine will centralize all points and rewards generated (card, code, coupon, etc) in-store or online. The idea is to allow members to use their rewarsds both in-store and online to standardise their experience and allow the point of sale (POS) and websites to call us in real-time to “burn” the reward.

Follow up for the rest of the interview next week and you can also catch up on the previus article!

Become a Scal-e customer or partner

If you are familiar with customer data management and acquisition and retention issues, and would like to become a Scal-e customer or partner, contact us!

Contact us