Think back to the last call you got from your Relationship Manager at the bank. If you groaned and cut the call, we know the problem. Though you’ve been banking with them since the days of your first salary account, they have no idea who you are or what life stage you’re in.
Imagine if they did!
Your Relationship Manager could point you to a credit card that actually gives you reward points you can use or show you how to save 15% on your next electronics purchase or send you a financial product you might actually be interested in. Instead of blocking them or saving them as “HDFC Ramesh - Don’t answer”, you’d actually answer the call.
Who really are you?
Not to pose an existential question (please don’t @ me saying ‘cogito, ergo sum’) but where’s the evidence that you exist online? Eric Berne defined a social stroke as ‘a unit of recognition’ where one person recognises and acknowledges another. The same way, we need a way for our real selves to be identified and authenticated online. That virtual representation is our unique digital identity.
Digital identity can be a powerful force of good—just ask governments around the world. Establishing DI helps to streamline administration, reduce processing times for services, improve security, and bring more people into the fold of governmental systems, particularly those from remote or underserved areas.
In several African countries, digital identity efforts have improved prosperity and social inclusion. Here in India, Aadhar-led bank account opening and mobile linkage (a trinity called JAM – Jan Dhan Bank Account+Aadhar Card + Mobile Connection) has worked wonders in increasing the penetration of banking services.
Digital identities are great for society, great for the economy—and as we’ll see, crucial for businesses too.
Customer uniqueness in the context of businesses
If businesses could recognize you uniquely and identify you across interactions, you’d get better product recommendations, truly personalized service, faster resolutions to support requests, and much more. As someone running a business, knowing your customers’ digital ID will help you delight them the same way.
- They help break information silos
Unique customer identifiers help you form a more complete picture of a customer’s journey. Without it, data silos abound. For example, without the uniqueness identifier, the same user coming to sign up in April, and activating the account in July, using another instance, are disjoint—and marketing and sales attributions go bonkers.
- They improve customer experience
With unique identifiers, your customers’ context is all in one place. This leads to a quicker resolution of their concerns, and you can win them over in a more cost-efficient manner.
If you’re thinking: ‘Well, we have a customer ID field in our billing system, so why all this fuss about identification’, I want to ask you: does your customer ID field translate into a better knowledge of unique customers? Not always—because there’s a difference between the count of paying customer IDs, and the count of unique paying customers.
Let’s say you are a mobile network operator fine tuning your marketing and upsell efforts. If you count the number of unique people with mobile connections, customers with multiple mobile connections will have a count of 1 against their names. But if you measure the number of mobile connections themselves (assuming that the same number is not shared by multiple people), you will arrive at a different count. So who is driving revenue growth: new users or existing users?
Defining customer uniqueness
Definitions should be aligned to serving your customers well and running your business profitably, based on:
- The nature of your business
- Type of customers
- Your Go-To-Market approach
Let me get into a little nerd speak: most data tables have primary keys which define uniqueness in their own ways. For example, uniqueness can be defined based on customer mobile numbers, email IDs, customer IDs, Transaction/Deal ID, Company name, PAN card, SSN, Bank account number, website domain name, etc. Sometimes a combination of multiple fields or attributes helps in forming a unique identity.
When customer identification is faulty
When customer identification is faulty, it creates a principal-agent problem within the organization. In this scenario, the teams (agents) working on customer acquisition and reactivation have different goals (maximizing their departmental metrics) but these goals are not aligned with the overall company goal (maximizing total customer value).
Say you are an OTT platform, and a subscriber fails to renew their subscription (a classic churn case). Your customer winback/reactivation team reaches out to the user with a discount; they change their mind and get back on their plan. Does this count towards new customer acquisition or winback revenue?
In the absence of unique identification, the churned subscriber who is reactivated may get counted twice - once for acquisition and once for reactivation. This misattribution creates a misalignment of interests. The acquisition team gets credit for a "new" customer even though it's a reactivation, while the reactivation team gets credit for their efforts.
This situation incentivizes both teams to focus on their individual metrics (number of new acquisitions, number of reactivations) rather than the overall goal of maximizing customer lifetime value. You may end up overinvesting in marketing whereas the actual investment should have gone into keeping subscribers engaged before they churned.
Another example: counting new customer IDs may be a misleading metric for new customer acquisition when more departments from the same company are creating new customer IDs. You may end up doubling down on marketing dollars looking at the number of new customer IDs, when you should actually be focusing on customer success and expansion efforts.
Defining customer identity—deliberately.
Now that we've seen the negative impact of poor customer identification, let's explore how you can be deliberate about defining customer identity in your organization.
Step 1: Identify your overall organizational goals. Are you looking to improve new user onboarding, customer acquisition, net expansion rate, or optimize marketing spend for acquiring new customers? Your departmental goals and customer identification methods should all flow down from these overarching objectives.
Step 2: Weigh the pros and cons of using the available dimensions and fields. Take note of the problem areas. For example,
- The customer IDs in the billing system could inflate your new customer acquisition or churn numbers.
- The email field may count multiple users from the same company as different entities.
- The company name has multiple versions across systems or is missing values.
Step 3: You can overcome these limitations with some creative solutions. For example, though a customer has multiple customer IDs, you can get around that by defining logic to create a ‘Parent customer ID’ field to consolidate their information. To avoid overcounting based on the email field, you can use the root domain for work emails and the entire email address for generic domains such as Gmail/Yahoo, etc.
Simplify it with DataviCloud
If you are using a unified data platform (of course I recommend DataviCloud), defining unique customer identities can be a lot simpler, not to mention more accurate and dynamic. All you need to do is connect your data sources—CRM, product analytics, ads manager, spreadsheets, etc. You can do this on DataviCloud with just a few clicks—zero coding.
Our machine-learning algorithm collates the data and automaticallyidentifies unique customers based on customer attributes scattered across your systems. You can see these on an intuitive, easy-to-use dashboard.
Even better? You can not only refine the identity definition to closely align with your business but the system also recommends outcome scenarios for you to take action.
The end result is that your team can make informed decisions to define customer uniqueness without starting from a blank page, collating data, or writing hundreds of SQL queries. Want to see this in action? Sign up for a 30-minute, outcome focused demo here.
