What is Identity Resolution and How it Works
More and more businesses online are veering around to the fact that if they have to remain competitive, the one thing that will keep them ahead of the pack is a complete understanding of their customers. A customer’s identity resolution is like the Holy Grail for any business, especially in today’s competitive world.
Table of Contents
- What Is Identity Resolution
- How Does Identity Resolution Work
- How Can Marketers Benefit from Identity Resolution
- What Are The Benefits Of Identity Resolution
- Why Does Your Brand Need An Identity Resolution Platform
What is Identity Resolution?
A single unified customer profile is of paramount interest to businesses today. Identity resolution is the way of attributing customer interactions with your business across all touchpoints.
Also, let’s not forget that in the last few years, the number of touchpoints customers can have with your business has simply exploded.
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How Does Identity Resolution Work?
In a recent report, Forrester has described identity resolution as, “The process of integrating identifiers across available touchpoints and devices with behavior, transaction, and contextual information into a cohesive and addressable consumer profile for marketing analysis, orchestration, and delivery.”
So far, website cookies alone would do the trick where this concept was concerned but consumers are no longer shopping only on their desktops.
In fact, more and more of them are now taking to buying from their mobile computing devices. That, and new data privacy laws have made the browser cookie passe.
What is “in” now instead is cross-device Identity resolution tracking. This is a process of collecting and combining data around a single customer in a way that links all his/her devices used back to him/her.
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Why is cross-device tracking gaining importance? It is a fact that today, the average person owns multiple devices connected to the World Wide Web. Eg: laptops, smartphones, smart TVs, game consoles, etc.
Device tracking allows marketers to confirm which device and channel were used when a service or product was eventually purchased – whether it was a desktop, mobile, and whether it was from an e-commerce site or a social media channel.
With that, what has effectively happened is the e-commerce company or retailer has also managed to create a “unified” picture of its customer. The process is called “Identity Resolution”.
It is the method in which certain unique “identifiers” are used to “connect” all the actions of a buyer to create a single, unified, real-time, customer identity.
So what are these identifiers? The location, the browser used, the device used, the platforms, and the channels, all of these are identifiers that help link the same person, irrespective of the device or channel used.
Once a single customer’s identity is “resolved”, it becomes far easier for the marketer to serve up offers to him/her.
Because of Identity Resolution and customer data platform (CDP), each customer can be served up a personalized and unique brand experience.
How Identity Resolution is Beneficial for Marketers?
With this concept, marketers get a complete 360-degree view of their consumers by unifying online and offline data.
All kinds of businesses, from mom-and-pop to Fortune 500 companies, are now turning to identity resolution services to help their customers better manage and protect their personal data. Why? Because this practice improves your customer’s overall trustworthiness.
Of course, if you are the one offering a service, many of your customers may opt-in to have you manage their personal data and handle it in accordance with industry standards.
1. All about cross-device tracking
So, for the reasons stated above, more than cookies, marketers these days prefer to use cross-device Identity Resolution tracking to maintain a complete profile of every client.
Essentially, the latter allows the collection of data and its linking in a way that all devices used by one person are tracked back to him/ her.
The importance of cross-device tracking lies in the fact that it enables business teams to understand if a particular advertisement served on the desktop first resulted in a sale on a mobile; both devices are owned by the same person.
But here’s where things start to get a little tricky. There are two types of cross-device tracking – deterministic and probabilistic tracking – leading to two types of identity resolution – probabilistic and deterministic.
While both these methods involve complex matching across millions of data points as well as access to ALL the digital and device data, depending on the technology and data sets, they can deliver one of two types of matches.
2. Deterministic matching
Under deterministic matching, using a deterministic connector like perhaps a hashtag, email address, or username, the records of a particular customer are matched. This approach works best with first-party data.
Why first party? Because it involves the use of personally identifiable information of a customer like his/her email address, home or work address, telephone or credit card numbers, etc. At the end of this exercise, there remains no doubt about the identity of the customer.
Here’s an example of identity resolution: If John Doe uses his email address and logs into his email on his desktop, then uses the same on his Tablet, deterministic matching will show he is the same fellow.
Deterministic matching is considered to be more perfect and takes the guesswork out of the tracking game. But here’s the thing: although a more accurate matching method, it cannot be implemented by all businesses.
One reason for that is because of the kind of resources it draws on, and because of the humungous amount of data, implementation is not possible for all the companies. So here’s where probabilistic matching comes in.
The other factor that poses a hurdle in the implementation of deterministic matching is that it requires concrete identifiers like social security numbers or driver’s license numbers. But many a time, some companies do not need such information. Or, even if they do, consumers may refuse to submit such sensitive information.
Randomness is not included in deterministic identity resolution models. With the same initial conditions, you will get the same result every time you run the model.
3. Probabilistic matching
This one tracks not a customer’s identifiable information but relies on algorithms. This method is more “anonymous” than a deterministic one. Essentially, probabilistic matching tracks anonymous data points from different digital elements.
Some examples of the latter are device type, operating system, and browsing behavior. It uses a statistical approach to understand whether two customer records represent the same individual or not.
Probabilistic matching generates matching records that gives weightage to the frequency of the occurrence of a data value within a particular division.
But the obvious question is – why would you want to track anonymous data points? Isn’t this a very random way of tracking, especially because you want a near-accurate picture of your buyers?
Businesses must understand that to date, no matching system is perfect. Even for deterministic matching to work successfully you must be 100% sure of the veracity of your data points. If values are suspect or missing, the match may not be accurate.
Benefits of Identity Resolution
ID helps create a complete and accurate view of each customer. This helps businesses deliver more personalized marketing and customer experiences.
For example, if you have one set of customer data in your database, another in a CRM system, and another in an email marketing tool, there is no way to know if the same person is using your website, subscribing to your emails, and calling you on the phone.
This can lead to a poor customer experience because it looks like you are not listening. Or worse, you may lose customers when you think they are still engaged with your brand.
ID resolution is also required if you want to take advantage of social network features that require that customers have an account.
Though identity resolution is relatively easy in some circumstances, it can be challenging for a number of reasons. The number of databases in use can be large.
Sometimes this is because your data source was generated by a third party and it only contains the current state, not a history. Or the vendor wants you to continue sending your data back to them.
You may also have multiple versions of a customer record in the form of multiple versions of your own software. Identity resolution is not always automatic.
If a customer is not signed in to a system, the identity resolution process must go through a series of checks to be sure that they are still the same person they were last time they visited your website or called you.
What Benefits can A Brand Achieve with an Identity Solution?
An identity resolution solution can provide your business with a number of valuable marketing benefits. By identifying and tracking customers across all channels, you can better understand their behavior and preferences. This information can help you create more targeted marketing campaigns that are more likely to resonate with your customers.
In addition, the ability to identify customers across different channels can help your business reach more consumers with fewer resources.
An identity resolution solution can also help you find new customers that have not been previously contacted by your sales team. This type of customer will often open their wallet much more quickly than those who have already been contacted by the company.
Finally, an identity resolution solution can help you reduce complaints and improve your customer service. By understanding the source of a customer’s dissatisfaction, you can make adjustments to your offering that will improve their experience.
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Why Does Your Brand Need Identity Resolution Platforms like a CDP?
Identity resolution platforms are necessary for brands because they allow brands to better understand their customers. By identifying and resolving customer identities, brands can more accurately track customer behavior and preferences.
This allows brands to provide a better customer experience through targeted messaging, dynamic product recommendations, and tailored offers.
In addition, by helping to make customers feel welcome, effective identity resolution platforms can foster a more memorable customer experience.
Brands today are able to take advantage of the massive amounts of data that have been collected by digital marketing platforms, social media, and mobile technologies.
This data includes information such as social network connections, location, shopping history, travel patterns, and customer preferences.
By using these datasets to identify customers with similar characteristics, marketers can create targeted experiences for them across multiple platforms.
The ultimate vision for identity resolution platforms is to be able to take in all of this customer data and then use it to create a branded experience for each individual customer.
“Data, Location and People” services can provide extra value to brands today in leveraging the information that has been collected about a customer.
A customer data platform (CDP) helps interpret customer data so that you can create effective, personalized customer experiences.
CDPs like Express Analytics’ Oyster have the ability to collect and unify all customer-related data, across online and offline touchpoints, to create a 360-degree view of a single user.
Thus, it helps manage fragmented data across multiple channels so you can track customer behavior and deliver intelligent recommendations (in real-time).
Who Needs Identity Resolution, Why, and When?
As we have already said in this post, there are several areas in which identity resolution can be used: IDR can be used to improve customer experiences. For example, by providing the correct name and address of a customer when you deliver a package, or by ensuring that the correct records for unemployment benefits are received.
Identity resolution can also be used to combat fraud. By recognizing fraudulent use of a credit card, it can prevent misuse of that credit card. Identity Resolution can also be used to increase efficiency by identifying employees who are using the same identity.
Customer data resolution is also used to improve marketing efforts by ensuring that customers are taken off mailing lists when they no longer wish to receive mailings or the products being advertised.
Identity resolution services also have value in ensuring that businesses receive the benefits they pay for (e.g., Medicare, insurance policies).
For example, if you submit a claim for Medicare and the proper records for your identity are not immediately available, it could result in a delay in reimbursement or denial of your claim. Thus, identity resolution can be used to ensure that the records are always accurate.
Conclusion: Identity resolution is the process by which you can create an accurate customer profile. This helps in better personalization and an enhanced brand experience.
Whether to use deterministic or probabilistic depends on what your company’s business goals are, what is your marketing trying to achieve, and the available resources at hand. But let’s also not forget that you could use both matching methods together.
Since the probabilistic methodology is easily scalable, it can be used to add value and scale when applied to an identity solution that rests on a deterministic matching base.