The Customer Data Platform Built for Conglomerates
How conglomerates can leverage a new generation of CDPs to create a virtuous cycles between individual brand autonomy and consolidation to drive value across the portfolio.
June 20, 2023
Conglomerates, or businesses owning multiple complementary brands, possess a unique opportunity to leverage data sharing and activation through a Composable Customer Data Platform (CDP) to increase their share of wallet from customers. By integrating and analyzing customer data centrally across brands, conglomerates can better understand customer preferences, deliver personalized experiences, and foster cross-selling and upselling opportunities.
While challenges exist, a well-implemented customer data infrastructure can lay the groundwork necessary for conglomerates to unlock the full potential of their brand portfolio to accelerate business growth.
In this blog post, we will explore how conglomerates can harness the power of a Composable Customer Data Platform (CDP) and secure data sharing to enhance their understanding of customers, drive cross-brand loyalty, and ultimately increase their market share.
Conglomerates are business entities that own and operate multiple brands across one or many different industries. These organizations strategically bring together brands with complementary products or services, targeting overlapping customer segments. This strategic consolidation enables conglomerates to unlock synergies, capitalize on economies of scale, and identify new avenues for growth.
Remarkably, some of the world's most renowned brands are owned by just a handful of conglomerates, highlighting their significant influence and market presence.
- Procter & Gamble, maybe the most famous, owns over 100 brands in 11 categories of personal care products (list of brands). Unilever is a similar conglomerate based in UK.
- PepsiCo owns over 100 brands in food and beverages, and balances sugary drinks and snacks with healthy versions to capture market share
- A doughnut at Dunkin, lunch at Arby’s or Sonic and dessert at Baskin Robbins all contribute revenue for Inspire Brands
- Gap Inc. houses top purpose-led brands such as Gap, Banana Republic, Old Navy
- Estee Lauder continues to build an extensive portfolio of brands in prestige cosmetics with an impressive demographic diversity
Conglomerates acquire brands to either diversify and extend brand portfolio or to drive financial synergies between mostly-similar brands (by consolidating operational functions).
Most conglomerates are very successful when it comes to acquiring brands, but very few succeed in fully integrating them to actually enable the synergies for which they were acquired. As such most conglomerate companies face many of the same core challenges:
- Data Silos and Fragmentation: Conglomerates often have brands operating on different platforms or systems, leading to data silos. Consolidating and standardizing these disparate systems can be a complex undertaking.
- Trust and Consent: Building customer trust is crucial for successful data-sharing initiatives. Conglomerates must be transparent about data usage, provide opt-in/opt-out options, and ensure customers have control over their data.
- Cross-Brand Collaboration: Encouraging collaboration among different brands within the conglomerate can be a cultural challenge. Identity and purpose of acquired brands are preserved by design which often leads to silos and lack of cross-brand communication and synergies.
- Data Security and Privacy: Protecting customer data is of utmost importance. Conglomerates must invest in robust security measures, implement strict access controls, and regularly audit data usage to ensure compliance with privacy regulations.
Technology teams at conglomerates are forced to live in a “OR” world and make compromises–brand autonomy OR tech consolidation, speed OR data security/governance. These choices often correlate with economic performance - a growing economy encourages autonomy over consolidation while a slowing economy reverses the trend.
What if conglomerates didn't have to compromise and could live in an "AND/WHILE" world? Instead of making sacrifices, organizations could instead focus on gaining a deeper understanding of the customer and avoiding cost duplication. While this is the objective of many organizations, few realize that they're actually much closer to making this dream a reality via data sharing.
The Power of Secure Data Sharing
Data lies at the heart of successful conglomerates. Conglomerates gain a comprehensive view of customer behaviors, preferences, and purchasing patterns by consolidating customer data from different brands under a single customer data infrastructure. This enables them to craft personalized and targeted marketing strategies to drive tangible outcomes.
Enhanced Customer Understanding
Conglomerates can create comprehensive customer profiles by enabling data sharing among multiple brands. Analyzing data across brands provides valuable insights into cross-brand interactions, resulting in a holistic understanding of customers. This in-depth knowledge allows conglomerates to identify opportunities for upselling and cross-selling, enabling them to deliver personalized offers that align with customers' preferences. Ultimately, this enhanced customer understanding strengthens customer engagement and fosters long-term loyalty.
Improved Customer Experience
Leveraging these central customer profiles, conglomerates can deliver a seamless and personalized customer experience that transcends individual brands. These organizations can create cohesive customer journeys across their entire brand portfolio by harnessing data from diverse touchpoints. For instance, if a customer purchases from one brand, the conglomerate can utilize this information to offer relevant products or services from other brands within their portfolio. This integrated approach enhances customer loyalty, fosters a deeper connection with the conglomerate's brands, and significantly increases the chances of repeat purchases.
Sharing data among complementary brands fosters collaboration and synergy. Conglomerates can identify opportunities for cross-brand promotions, partnerships, or co-branding initiatives. For instance, if one brand has a strong presence in a particular market segment, they can share data with another brand to tap into that segment's potential. This collaboration enables conglomerates to expand their customer base and increase their overall market share.
Efficient Resource Allocation
By consolidating customer data across brands, conglomerates can optimize their resource allocation. Insights derived from the shared data allow conglomerates to identify commonalities and overlaps within their customer base, eliminating redundancies and streamlining marketing efforts. This data-driven approach ensures that marketing budgets are effectively utilized, maximizing each brand's return on investment (ROI).
Addressing Data Privacy, Governance, and Security
While sharing data among brands within a conglomerate offers numerous benefits, addressing data privacy and security concerns is essential. Conglomerates must adhere to rigorous data protection protocols and ensure compliance with applicable regulations, such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA).
Implementing robust data governance measures when sharing data across brands, including anonymization, encryption, and access controls, helps safeguard customer data. Additionally, obtaining explicit consent from customers to share their data across brands establishes transparency and builds trust.
Composable CDP Architecture
Modern data warehouses such as Snowflake, Databricks, or BigQuery lay the groundwork for unlocking the next generation of “Composable” Customer Data Platforms. These cloud solutions make storage, compute, and data collaboration more manageable than ever.
Once data has been centralized, leading conglomerates are turning to Hightouch to empower anyone within their organization to securely and efficiently activate customer data to downstream applications like CRMs and ad platforms. This approach breaks a complex technology project into manageable pieces, driving time-to-value one use case at a time.
Most importantly, limiting data access to only what’s appropriate for each brand becomes trivial, as it’s just a matter of leveraging the granular controls provided by Hightouch and the underlying data platform. With this composable architecture, Hightouch is simply peering into the data platform. The data doesn’t need to first get copied into some SaaS infrastructure (a necessary evil for legacy “bundled” CDPs)
Store and Model
Modern cloud data warehouses like Snowflake, Databricks, and BigQuery make storage and computation of massive amounts of data easier and more efficient than ever. With data stored centrally for each business, data teams leverage the power of the cloud data warehouse to ensure their data is properly modeled into a production-ready environment.
Share and Enrich
Joining data from multiple brands, as well as 3rd party data sources, unleashes the true potential of this infrastructure to enable enriched customer profiles. To be clear, brands will have the control to share only what they prefer to, and what can be legally shared. Secure data sharing capabilities of modern cloud data warehouses make doing so seamless. Techniques common to traditional Customer Data Platforms (CDPs), such as identity resolution, can then be deployed on top of the shared data sets directly within the data warehouse to merge customer profiles.
In exchange for sharing selective data, brands gain richer customer profiles and avoid duplicative costs. Using the activation capabilities of platforms such as Hightouch, data can be safely sent back to individual brands and any external applications for marketing or operational purposes. Data teams can enforce all data governance while giving less technical business teams powerful no-code features to build and define audiences from the central data sets.
Conglomerates that own multiple complementary brands possess a distinct advantage in capturing a greater share-of-wallet from customers. By safely sharing data among brands using a Composable CDP architecture, they can move from an “OR” world to an “AND/WHILE” world to gain a deeper understanding of consumer behavior, deliver personalized experiences, foster cross-brand collaboration, and optimize resource allocation and preserve brand identity/autonomy.
This is not without challenges, but small starts that deliver quick wins today are quite possible with modern data technology.