How Treasure Data captures, analyzes and uses customer data

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For the past decade, companies knew little about their customers. Today the world is inundated with information from the internet, the shops and the world in general. Treasure Data tries to solve this problem with a tool that tames the chaos, at least a little, through well-orchestrated curation.

Treasure Data uses the letters CDP for its customer data platform to differentiate its approach from traditional customer relationship management (CRM) products. The goal of satisfying customers is the same, but the software is designed to handle much larger amounts of data from a much wider range of sources. CRM software focuses on tracking customer interaction with the business, while CDP aims to use all available data to tell a better story about customer needs.

CDP products are appearing from various established companies and startups. Microsoft and Oracle, for example, focus on it. Startups such as Segment, Klaviyo, Bloomreach, and Insider are just a few of several companies committed to helping businesses understand the relentless data flows and provide options and opportunities for cross-channel marketing.

Treasure Data has built a platform for collecting various marketing data over the past 10 years. Co-founders Kazuki “Kaz” Ohta and Hironobu Yoshikawa built the company to bring in more than $100 million ARR from clients like Subaru and InBev.

To learn more about Treasure Data’s vision of how companies collect, transform and understand multiple data sources, VentureBeat spoke with Ohta to understand what it accomplishes.

VentureBeat: Congratulations on building such a strong company. What’s your secret?

Kazuki Ohta: We’ve had so much tailwind lately. According to McKinsey, 60% of customer interactions for any business today take place in the digital world. And this percentage is higher for Generation Z consumers. So all companies need to understand the customer with data.

VB: That’s a strong force that drives the CDP world. Are there more?

KO: The problem is that 10 years ago it was a big data mistake where you could collect everything about your consumers and customers and use the data wherever you want. But 150 of the 200 countries have implemented consumer data privacy laws, such as the GDPR or the CCPA. So you have to get consent and then use the data together with the consent of the consumer who also has the right to be forgotten.

VB: That sounds like a problem. But you framed it like it’s a benefit.

KO: The new rules mean you have to manage customer data in a centralized way. So those trends will continue for the next five to 29 years as consumer privacy regulations get tougher.

VB: How else does regulation help?

KO: There is now also a tactical wave where in two years 75% of web and mobile users will become anonymous due to third party cookie regulations. Facebook lost $200 billion in business value a few weeks ago. Many companies are currently shifting their strategy to own their own first-party data. That means they don’t rely on third-party audience data. They will want to own and manage their own customer data and use this data themselves for better marketing, customer service and to support every customer touchpoint.

VB: Can you give me an example?

KO: The problem we’re solving is simple. I have been a customer of one internet and cable provider for 11 years. And every time I call them it takes 20-30 minutes to wait. And then they don’t know anything about me. They ask for my phone number even though I’m calling from my phone. That’s because they forward the phone to different lines, right? And they obviously don’t know anything about me.

VB: That’s about 90% of the companies I call.

KO: The problem we’re solving is in the business; there are so many data silos in many systems, such as product data, business division CRM, and marketing customer support. Businesses are using more and more channels as consumers use more devices. There are many advertising platforms and geographies, and there is an overwhelming fragmentation of customer data. And it’s clear that the existing solutions don’t work based on the example I showed. We have one centralized platform for customer data so that we can consolidate all data from multiple data sources into it.

VB: My cable company may not really know me in the end, but at least the data will be better organized and I may not have to wait 20-30 minutes to get anything done because the customer service reps are always authenticating and searching for me to my dates.

KO: Think about buying a car. You go to websites, research a lot, go to dealerships and then try out some cars. Think of Subaru, one of our customers. The problem they had was that they have multiple product lines, such as Legacy, Forester, and Impressa, and each product line uses different ads, agencies, AVC, and even websites. It is managed by several teams. And then when you go to a dealer, they don’t know who you are, what you’re looking for, or when you’re trying to buy, right?

So what we did was merge all the data sources into one and created a Customer 360 view. We collect nearly 800 million digital touchpoints in real time every day. So every day Subaru prospects and customers visit the website, use the mobile app or go to a dealer. All this data comes in real time in Treasure Data.

VB: Once you have the data, what happens?

KO: We apply machine learning models to predict who will buy which model or what kind of accessories. That used to be done by a human. Machine learning is far from perfect, but it offers more accuracy. Then passing this information on to the dealer’s representative will help them spend their time with you more wisely.

Based on all the data you have generated during the journey you have made with servers from different channels, we can calculate that you have a 95% chance of buying an Impressa. So the seller can better spend time with you.

Dealer conversion rate increased from 18% to 31% and then we generated over $800 billion plus revenue increase for one region.

VB: You mentioned the compliance and privacy regulations. How does that play into this?

KO: You know InBev, the world leader in beer producing Budweiser, Bud Light, Corona and all these different brands. They generate $54 billion USD in annual revenue. The challenge is that so many brands are growing separately. They had so many data silos in 40 countries and 500 brands. They had no common processes or data. Each country uses different tools. They also relied a lot on the third-party audience data, but now that the third-party cookie data is dying, they have to switch to the first-party data. That means direct ownership of the consumer data.

You mentioned that the compliance department is asking the marketing department for a centralized data security compliance. The governance is complex for something like GDPR and CCPA. With Treasure Data, we’ve merged over a thousand data sources into one tool.

VB: So you’re not selling data storage so much as regulatory compliance assistance.

KO: Yes, we have many security features, such as processing control, access control for third-party audits, audit for access to role data, and access control for log roles. Those are some of the features we deploy for compliance.

VB: How do you deal with the patchwork of regulations around the world?

KO: We are the only ones with data centers around the world. Now, in the US and near Japan or Korea. Some brands like LG have significant business in Korea. Korean consumer data cannot be stored outside of Korea. So they use Korean Treasure Data, Instant Store, and Korean consumer data, while leveraging other data and locations to roll out CDP around the world.

VB: Alcohol is always strictly regulated, but it is regulated in different ways in different countries.

KO: What’s interesting is that after the pandemic, a number of countries allowed them to sell alcohol online because nobody wants to go to brick-and-mortar stores. So they had to shift a lot of sales to digital sales and then CDP was the driver of the digital sales channel.

VB: That’s a shift.

KO: Consumers find it useful. Also, looking at my behavior, I probably use more deliveries than going to the store. So that consumer behavior will continue, and we will see more direct-to-consumer approaches continue to increase.

VB: How do you work with CRM platforms?

KO: I think CRM is more than an operational transaction store. It’s more up front to manage the records and CDP platforms that are more analytic. This means that we collect not only the customer properties and attributes or fields, but also all the behavior. Every time they visit the website, go to a mobile app or even drive their car or generate IoT product data, we collect it. All this data comes on our platform, which is very different from CRM.

If you’re using CRM, you’re going to store a total of 100 million records. But with CDP, we capture 2 million records every second during peak hours. So it’s a fundamentally different technology. I’d say, from the buyer’s perspective, it’s still a little confusing, because you’re wondering, “Should we have CRM and CDP at the same time?” Well, but in the next five to ten years, that gray area is bound to grow.

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