Why CDPs May Define the Future of Telcos

Telcos across the world are facing digital transformations. For decades, they have built their success on the control over their physical distribution channels and were able to grow their customer bases while creating a competitive moat. More than anything else, they became highly developed distribution machines.

However, the digital ecosystem has disrupted this business model. Companies like Facebook and Amazon have created compelling consumer products and people are spending an increasing amount of their time using them. This gives them tremendous distribution power and, no matter what business you are in, chances are that your existing and future customers can be found in their user base. This poses significant challenges for companies, like telcos, who have staked their futures on their ability to leverage distribution as a competitive advantage.

Does this mean that it’s inevitable for telcos to be disrupted by new entrants who are better at using digital advertising platforms? Not necessarily. Incumbent telcos have spent decades building trusted relationships with their customers, and these relationships are generating the hard currency of any digitized business — customer data. This is the “unfair advantage” that any incumbent telco has over their challengers, and it’s a significant one if used in the right way.

Leveraging that data in combination with the partners’ capabilities is the means to recreate a telco’s “competitive moat” in a digitized world. A telco knows more about their customers than most companies do, but most of them are still not using it in ways that create meaningful business outcomes due to: a) customer privacy and the damage that could result from the mismanagement of customer data; and b) lacking enough data on users outside of declared contract holders.

So how do telco marketers solve for these challenges in order to stay competitive?  

One solution is a customer data platform (CDP). In the case of telcos, CDPs are especially useful for: a) managing first-party data against persistent user profiles in order to get a real-time view of customers’ interests, behaviors and lifecycle stage; and b) activating a wide range of marketing and advertising channels in order to drive business results.

However, not all CDPs are built the same. In order to find the one that best suits their specific needs, telcos should look for the following criteria in their CDP vendor:

1. Superior identity resolution
Offline customer data sits in multiple silos and is usually keyed to different identifiers. In addition, digital data is equally fragmented, with the average internet user in the U.S. having 8.1 digital identifiers spread across more than three devices. This is why an identity graph is a crucial ingredient for not only unifying customer data, but making it actionable. It is also the the most effective way for a marketer to project their first party customer insights onto prospects through look-alike modeling. This is why the Tapad CDP, for example, runs on top of the Tapad Graph and its 4+ billion devices. We believe that — if marketers want to achieve personalization at scale — they have to personalize interactions for not just existing customers, but future ones as well.

2. Ongoing compliance
With GDPR and ePrivacy regulations being introduced in the EU, marketers should ask their vendors how they are continually implementing privacy-by-design principles. Compliance is not a one-off effort. Instead, the marketer and the vendor should work as partners to ensure customer data is being treated in a privacy-conscious and compliant manner. At Tapad, we practice what we preach. All of our products have been screened by legal experts to ensure compliance and every new product idea is screened prior to entering development phase. We are also continuously working with our customers to ensure that their data permissions are propagated into our CDP so that they are compliant at all times.

3. Real-time and actionable data insights
Holistic use case support requires robust capabilities with real-time data ingestion, interpretation, and activation. While batch processing will continue to be sufficient for some use cases, real-time processing will be mission critical for others. For example, churn management is a mode of communication that usually starts as one-to-few (personalization for at-risk segments) and ends as one-to-one. As such, it is of utmost importance that any customer interaction is processed, interpreted, and responded to as soon as it happens.

While CDPs might not be the first platforms to help brands use customer data, it is the first one to do so in a marketer context. As such, they are marketer-controlled rather than IT or finance-controlled. They are systems of insight and action rather than systems of record. Overall, with the right CDP in hand, telcos are one step closer to maintaining their “competitive moat” in an increasingly competitive market. Learn more about the Tapad CDP and how it’s purpose-built for telcos.