You know when a product feels too salesy? Maybe it comes off flashy, money-hungry, or simply seems like it won't bring you any value, each of which is a side effect of not knowing your customer, your potential client, your target audience. The challenge, then, is this: Learn to speak the language of your customer's desires, or risk sounding straight-up insincere and ill-informed.
A customer data platform (CDP) can give you the deeper insight you need to make this happen.
What is a customer data platform (CDP)?
A customer data platform (CDP) is software that allows businesses to collect, store, and manage large sets of customer data from multiple sources, with all of it housed in a single location. These data types might include anything from customer demographics, purchase history, and data detailing various customer behaviors. And by integrating your CDP with other digital tools such as a content management system (CMS) or customer relationship management system (CRM), you can leverage personalized customer insights to simultaneously deliver exactly the kind of experience your customers are looking for.
A CDP allows you to build a aligning multiple 'data spaces' for analysis, ultimately helping your company maintain consistency across decision making by generating customer profiles. Marketing, sales, customer support and finance employees are generally the primary bearers of this data, and can benefit from a CDP by using it to drastically cut down their data collection efforts.
In a nutshell? CDPs provide a single source of truth for all customer data, allowing you to have a more complete and detailed understanding of your customers and their behavior.
What does a customer data platform (CDP) do?
Your workshop for customer data
CDPs are your data-crunching friend. They pull customer data from all of their digital locations to amalgamate a customer profile. Website interactions, email campaigns, social media channels, point-of-sale (POS) transactions (and more) can tell us so much about a customer base, and with a CDP, your team will be able to make informed and accurate marketing decisions.
Unifies diverse customer data
A CDP makes its own copy of the data and stores it in one, neat and tidy place, always updating the information accordingly.
Glossary of data types you’ll uncover in a CDP:
Behavioral data - Website visitors’ actions (i.e. pages they visit and how long they stay on the website, what products they view or purchase, etc.)
Engagement data - For social media, this would be likes, views, comments. For a website, this data would include click-through rate, bounce rate, and time spent on a page.
Mobile app data - Download and usage statistics, the number of push notifications sent and how many were clicked on, the number of in-app purchases, and the number of reviews/ratings.
Transactional & POS data - Purchase history, the price of products purchased and if a discount was applied, the payment method used.
Demographic & personal data - Characteristics of a target audience like age, gender, income, education, and location of the consumer.
Analyzes data in real time
CDPs know exactly where the data is flowing at all times, allowing it to predict which customers will purchase and why, based on their specific data sets. Though they all ingest data in real time, some CDPs are more robust than others—some can instantly update customer data, while others take more time to process.
Generates a unique ID for each customer
When a customer’s information is spread across multiple channels, things can get confusing; there’s an email on one account, a phone number with that email but a different name, and other possible inconsistencies. This data fragmentation makes it difficult to manually identify who’s who in your customer base.
From the information gathered about your customers, a CDP stitches together a unique profile per customer to keep a consistent ID when segmenting them into categories. Phone number, social media accounts, and email addresses are all relevant information to have in this ID.
Segments customers by their data
CDPs take this data and section off groups of customers with similar characteristics. This can be looked at according to the demographic they fall under, the amount of time they’ve spent on your website, what purchases they made, and more. Segment categories can look like: frequent customers, loyal customers, and lapse customers.
Segmenting creates a unified view of each customer, allowing you to better understand your customers and create marketing campaigns personalized to their wants and needs.
So, what’s the point of all this? Knowing this information, you can personalize the customer’s experience based on their segmentation.
Below are some examples of what can be focused to be most relevant to respective customer segments:
When re-worked to target within these segments, your marketing can increase relevance by showing customers the right products and presenting it in an appropriate way for the audience they’re in.
Manages customer data flow & privacy
Comply with data regulations
CDPs often include tools that help businesses control the flow of data between marketing systems to ensure the rights of their consumers. These tools are helpful for companies that need to comply with data privacy regulations, such as the EU’s General Data Privacy Regulation (GDPR) and California’s Consumer Privacy Act (CCPA).
Easily find & delete customer data (if needed)
CDPs can also allow you to anonymize or delete data upon request, allowing you to protect your customers’ rights and build trust with them. If a customer wants to redact or withhold certain bits of their information from your held data, you’ll need to be able to point to a specific place where the data lives. Since data in a CDP isn’t isolated, you can quickly find the data in question.
Send privacy updates
From a CDP, you can share consent updates with your customers when data privacy updates arise and ensure they are given the choice to consent or decline. Your customers won’t be in the dark about the data you want to see and will have the opportunity to redact consent to showing their data. Consequently, this builds upon their trust in you as a company.
Why you need a CDP in 2023
Increase customer loyalty with tailor-made marketing
The truth is, digital marketing doesn’t come in a one-size-fits-all. With a clear knowledge of the customer’s behaviors and preferences, the marketing should follow suit.
Create a better customer experience
Marketing specifically to a segment of customers can personalize your advertising and campaigns, providing a more engaging experience. A big problem is data fragmentation; it’s nearly impossible to give an accurate data analysis when customer info is scattered among several channels.
Once the CDP has segmented each customer according to the data, you can see a clear picture of customer behavior and preferences, and therefore make data-driven decisions that will help to better build your business. In other words, CDPs can allow you to create marketing campaigns that speak the language of multiple types of customers--and, in certain cases, can help you to eventually become fluent in those languages yourself.
So, with that in mind, the following equation rings true.
Data = Storytelling (um, what?)
When you say the right things to your customers, you resonate with them. And when customers have a better experience with your company, they are going to be more loyal to your brand and more likely to come back and purchase your product or service. Both of these results are a direct consequence of good clean data, made all the more accessible with a fine-tuned CDP.
Using powerful data tools to craft better stories can help you build stronger customer retention by ensuring your product or service's narrative stays consistent, all the while helping your marketers acquire new customers by using their CDP-streamlined datasets to craft stories that resonate more effectively with alternative audiences.
Optimize your marketing tasks
Easily integrate with other marketing tools
CDPs work best when leveraged alongside other marketing and sales technologies, such as Customer Relationship Management (CRM) systems.Often, companies will use CDPs in conjunction with CRM systems since CDPs are designed for deep-diving into how business marketing campaigns should go, while CRMs are made for sales-focused tasks rather than data analysis.
CRMs allow you to manage your interactions with both potential and existing customers, which you can then integrate with a CDP to help maximize every opportunity provided by the two systems.
Work smarter, not harder: Increase ROI
Let a CDP optimize your media investment in marketing campaigns. For instance, if the data tells you that a customer segment has skipped a certain stage and is projected to buy, you don’t have to send out as many emails or notifications to them as you would customers that need more of a ‘push.’
Marketing campaigns that reflect your customer segments will make that investment go a long way instead of putting all of your eggs in one basket by giving everyone the same messaging. Customers will be more engaged and apt to purchase from you in a shorter window of time when the messaging is specific to them.
Visualize customer data
When you need to present the backbone of your marketing plan to key stakeholders, a CDP can provide a clean visualization of the customer data that lead you to certain marketing decisions.
Instead of number-gibberish, CDPs give you the data in a way that’s easy to understand, even for non-technical people. This isn’t just for your IT department, marketing, finance, and sales employees can all use a CDP for data analysis and planning.