One of the marketers’ greatest tools is customer data. The more you know about your ideal customers, the more easily you can understand what they need and value, as well as what kind of messaging connects with them.
This is equally true for retaining current customers — you know they’ve been driven to purchase from you in the past, but why? What do they like or not like about your brand? What does their decision-making process look like compared to others?
One way to gather, consolidate, and analyze all of this data is through a customer data platform (CDP).
In this article, we’ll cover what they are, how they work, and how to choose the best CDP for your brand in 2019.
What is a CDP?
A CDP consolidates and integrates customer data from several different sources — including websites, mobile apps, email platforms, analytics tools, helpdesks, CRMs, and more — into a single database.
This provides customer insights, makes marketing teams more effective, and allows brands to tailor marketing and support to each individual customer. The customer data collected by a CDP can be as high-level as past purchases or as granular as having opened a mobile push notification.
Customer data platforms go beyond the traditional functionality of a CRM by gathering data from multiple sources to provide a 360-degree view of a customer.
For example, with a more traditional tech stack, a retailer’s customer support team may not have access to a CRM or other database with customer information, making support interactions impersonal. With a CDP, every detail of a customer’s interaction with the brand is in one place, meaning support teams can cater their service to the individual.
4 main components of a CDP
1. Ingestion – The collection of data from numerous data sources, including website analytics, mobile apps, offline conversion data, IoT devices, and many more.
2. Unification – Identity resolution, the process of stitching data together from all various sources to provide a single, unified view of a customer
3. Analysis – Analyze customer data to create targeted segments based on customer behavior across all data sources in your CDP
4. Activation – Using the learnings from your analyses to better orchestrate the delivery of your ads in order to provide a better customer experience across all advertising channels
Does your business need a customer data platform?
Here are some signs that your business could benefit from a CDP:
- Your data is siloed, causing inefficiencies between teams
- You’re using valuable tech resources to build and maintain bespoke integrations between systems
- You have blind spots within your customer journey
- You don’t understand why your customers don’t (or do) stay with your business
- You want to introduce behavior-based marketing and personalization
If any of the above applies, it might be the right time to integrate with a CDP.
How to choose a CDP
When choosing a CDP for your business, take the following factors into account:
Flexibility: How agile is the platform? Your customer data is unique; you should be able to configure your CDP to meet your brand’s needs.
Scalability: More sales means more data. Make sure that the platform you choose can scale alongside your business.
Security: Customer data often contain private information that users trust you to keep safe. Make sure your CDP is credible and offers proactive security settings to prevent data leakage. This is especially important if you have customers in Europe, where GDPR rules affect brands’ abilities to collect and use customer info.
Transparency: Your CDP should provide a complete view of the customer journey, from their first interaction with your brand through every retention effort. Keep this complete visibility in mind when selecting the right data platform for your brand.
Clarity: Data analysis is only valuable if your entire team can access and understand it. The right CDP for your business will provide the level of reporting you need in an easy-to-understand and actionable format.
Why are Customer Data Platforms critical in 2019?
Here’s what Will Weld, Solutions Architect at Elite SEM has to say about the value of customer data platforms for brands in 2019:
“CDPs are critical to providing a unified view of your customers. Companies continue to leverage more and more advertising channels in their marketing efforts. With this comes an influx of data that is silo-ed to those specific channels. “
“A CDP can help unify that data across channels and resolve it to an individual customer. CDPs can provide a single touchpoint of unified customer data to extend out to various platforms for activation.”
According to Weld, here’s an example to illustrate the value of a customer data platform:
“I saw an ad for skiing gear at REI on my Instagram feed. I went into REI in person to purchase some skiing gear. I’m still seeing the ad(s) show up on Instagram days/weeks/months later. All of that ad spend is wasted on me because the targeting mechanism used for the Instagram ads didn’t know that I went into REI and completed an offline transaction.
By having a CDP that unifies (e.g.) social data with offline transactions, I could develop a customer segment that basically indicates that I made a purchase in-store and I should not be shown any more Instagram ads (at least for skiing gear).”
“I could then push that customer segment out to Instagram as “people not to target with skiing gear ads” so that I’m not shown those ads anymore. This saves money for the brand and doesn’t get me annoyed when I see the same ad across 5 different channels.”
CDPs are new to the marketing tech stack, but they’re likely here to stay — especially as omnichannel customer experiences become the norm.
It’s no longer enough to send an amazing email campaign or offer great customer service if the two activities aren’t integrated. Working with a CDP can help provide a best-in-class, streamlined customer experience in 2019 and beyond.