Suppose a customer has been looking for a certain shade of exterior paint for their patio. They’ve visited the websites of various leading paint brands, Amazon, Google Shopping, e-Commerce websites, product listings, local hardware stores and checked with friends and family on social media.
No doubt, it may have been quite interesting and exciting to discover the various options available, but they could have saved time and effort if all these touch-points and interactions could have provided a paint company with one single unified point of view.
With the humongous amounts of data arriving on websites, business-owners are flooded with information – they have access to customer/visitor transactions, demographics, behavior and more. However, this data may be stored in separate silos, making it difficult to create a viable UX across different channels and devices.
This is where a customer data platform (CDP) can step in. It offers the gateway to a more integrated, comprehensive marketing program that is entirely data-driven. A centralized marketing “brain-center” can function only when data from different channels and streams is collated, sorted and analyzed to leverage its true power. Otherwise, it’s merely a set of facts and figures. Unless data is analyzed and interpreted, it doesn’t serve any useful purpose.
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Data Science
This is a relatively new field of study that harnesses and uses the power of information. It uses scientific processes, algorithms, statistics and different methods to draw out inferences, insights and knowledge from both raw and structured data. It is an inter-disciplinary field.
In recent years, it has become a vital tool for businesses and organizations, no matter what their size and nature of work. Experts in this field, called data scientists, are in high demand as they can collate and classify data into actionable information that the company can use to boost profitability, deal with competition and further its business goals.
What Are CDPs?
Professional marketing tech research analyst David Raab was the first to define such a field of study in 2003. He describes it as a “marketer-managed system that creates a persistent, unified customer database that is accessible to all other systems.”
CDPs are software that brings customer data from diverse sources together on a single canvas. It then sorts, organizes and categorizes this data under other usable heads. The data is gathered from different touchpoints in the customer’s journey in real time and it can be used to create unique, individual customer profiles to be stored at a central point.
This facility is managed by a vendor-neutral firm that specializes in helping marketing departments and professionals to manage the customer data that is available to them. This data is received from first, second- and third-party sources, and is comprehensive and more broad-based than before. It includes the Customer Relationship Management software already installed, the Data Management Platform, web-forms, social media activity, behavioral data from website interaction, email, transaction records etc.
This gives marketers a more globalized and in-depth view of the eco-system where such data can be used.
Are CDPs Different From Other Data Management Tools?
While they do share certain functionalities with other data management tools such as CRM, DMP, data warehouses, data lakes, data integration and workflow tools, CDPs are significantly different from these. Unlike CRM which are not built to manage/integrate enormous volumes of data from various sources, CDPs can connect transactional and order data, behavioral, web and mobile data, profile and product data.
Unlike DMPs, the CDP creates persistent customer profiles from cookies.
Data warehouses don’t give you real time data nor are they packaged systems.
Essential Features
An effective CDP is a software package that is pre-built to meet the unique needs of an organization. It can be customized to match the company’s requirements, and can be scaled up whenever necessary. A certain level of tech resources and expertise are required in the setting up and maintenance, but not to the extent at which they’re required with data warehousing projects.
They deal with important aspects such as identity, data clarification, transformation, centralization and enrichment, audience segmentation and finally, analytics and integration of streams of data.
They can:
- Enable profile unification across devices and fields
- Provide customer modeling through class definition, data management and geographical fields
- Offer real-time personalization
- Provide plug-in tools to automate any action linked to the customer within the framework of rules
Benefits of CDP
CDP plays a major role in establishment, growth and maintenance of the connections between your organization and your customers, vendors and other parties who connect with it.
The major benefits of CDP include:
- Creation of granular and real-time market segmentation
- Offers a truly unique and 360-degree, up-close view of the customer
- Enables the formation of predictive models such as customer lifetime value, discount sensitivity, clustering and propensity
- Promotes integration across advertising, marketing platforms, social media, email marketing and enables the use of measurement/testing tools
- It is a highly flexible and agile tool that easily adapts to dynamic customer behaviors
- Helps to boost personalization and provide top quality UX, follow-up based on web activity, and offer timely notifications
- Helps all departments in your organization to have equal access to customer data
- Creates deeper and more enduring brand loyalty
- Smooths the process of launching new products and services
- Enables strategic marketing
- Enables operational efficiency through centralization
- Reduces operational overheads such as connecting/syncing tools
- Simplifies reporting and attribution
- Enriches relationships with partners, suppliers
- Secures data according to current privacy regulations
- Allows your company to be more relevant and competitive
Who Can Use CDP?
If your organization has a multi-tool, complex tech stack, has a well-established and mature strategy for data management, and has a good buy-in from the management and marketing teams, CDP is right for you.
The main beneficiaries of a CDP platform would be front line marketing teams, sales and demand generation departments in your organization.
CDP has today grown and matured into a process that’s no longer merely “good to have” but has transformed into one that is a “must have.”
So, the next time a customer looks for a certain shade of paint for her/his patio, your company can provide the perfect one, at the right price point.
