As the marketing industry continues to grow and mature, a few key trends have become increasingly prominent.
First, most contemporary marketing is driven by data points. Leading marketing professionals are 72% more likely than others to invest their time and resources in improving the first-party data they capture. Additionally, 90% of top-performing marketers report that personalization contributes directly to their ability to generate a profit for their organization. An organization’s ability to collect and interpret valuable customer data and use it to guide its efforts to connect with customers has quickly become essential to modern marketing.
Secondly, prospective and current customers now engage with companies simultaneously across a variety of digital channels. These consumers might engage with a company website or marketing system, read emails, and interact with the brand on multiple social media platforms at the same time. Brands that cannot understand how these different interactions influence each other and bring together the information from multiple sources in one data management platform can find themselves missing valuable pieces of the customer picture.
These two essential trends have led many marketers to consider implementing a customer data platform (CDP). This type of software offers improved insight into customer behavior and improves the ability of organizations to engage with leads and customers with an omnichannel approach. This article will explore the role of CDP software within modern marketing and how this can help brands better manage the changing world of marketing.
Customer data platform basics
For brands to effectively reach their audiences across multiple platforms, they need to understand how their customers behave on those various platforms. Obtaining a more complete picture of behavior at various customer touch points will help them do a better job of providing personalized experiences and solving customers’ pain points. Businesses will be equipped to provide customers with the information and offers to keep them interested in the organization and proceed toward a purchase. The CDP answers the need for businesses to gather this information.
CDP was first defined by David Raab, a marketing technology (Martech) analyst and founder of the Customer Data Platform Institute. The CDP Institute defines a customer data platform as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” With a CDP, companies can bring together customer data from multiple platforms into a single space, such as mobile apps, emails, and the primary company site.
This creates a unified look at user behavior. Rather than segmented or incomplete data obtained through other platforms, the CDP answers the growing need for integrated customer profiles in real-time, creating a single customer view or a 360-degree view.
The CDP emphasizes gathering key customer data to use across departments. Rather than draw conclusions, the main goal lies in creating a complete view of the customer. The information can provide data for everyone, from marketing to sales and customer service. With everyone having access to a common data source, it also helps break down the silos between the different company departments.
Customer data platforms: Functions and benefits
To understand the value that a customer data platform offers organizations, it’s important to explore the key features and functions available with the software. Your customers don’t move in a linear line from their first moment of researching their pain point to making a purchase. However, the trail they take can provide valuable insight into what they seek and what they want to see from the brands they buy from. You can gain valuable information about the types of deals and offers that will appeal to them most and improve your campaign management.
To understand the value that a CDP can offer your organization, let’s explore six key functions and benefits that businesses like yours can gather through this software.
Integrate information from multiple marketing channels
Many businesses find it straightforward to gather customer data and information from a single source. For example, they can gather the information entered in a form on their website. However, with customers moving around so often between different platforms and areas to interact with businesses, the picture that this data presents is often incomplete.
Instead, the CDP can integrate the information from several sources. You can unify information from sources such as your mobile app, your website, and even when they are offline points of contact, such as with in-store behavior. All of this information creates a more complete picture of consumers.
Gain a detailed understanding of your customer’s needs and preferences
Armed with the more complete data gathered through the CDP, brands will also better understand needs and preferences throughout the customer journey.
With greater insights into the needs of customers, businesses can improve their operations across departments and give their marketing strategies a boost. From research and development to customer service, every department will have a better understanding of their customers and improve their capacity to address pain points, build customer engagement, and encourage retention from buyers who continue to make purchases.
Create unified, comprehensive customer profiles
As businesses set out to engage with their customers, the CDP can help them create a comprehensive view of the buyer. Rather than spending hours integrating behavioral data collected from various sources or trying to operate using incomplete pictures of information, businesses will now find it straightforward to create the profiles they need to move forward.
Reach individuals with offers tailored to them
As businesses create more effective profiles of their customers, they will also improve their marketing efficacy. They can create more tailored offers and promotions to reach their target audiences. Marketing automation will improve their ability to engage customers.
For example, customers don’t like continuing to see ads for a product they’ve already purchased from your brand. The ability to track customers in a more integrated format can enhance the quality and personalization of the offers and ads your customers receive.
Considering that nearly two-thirds of consumers report that they expect to receive personalized experiences from brands based on their unique preferences, businesses that become more adept at using the wealth of data at their fingertips will have greater success providing the best customer experience.
Make key marketing data accessible to your team
The value of data extends far beyond its capacity for the marketing team. As mentioned, quality customer profiles can enhance the abilities and performance of departments across the company. With a CDP, it becomes easy to make this information available to anyone who might need it at the organization. Everyone can access the information from a unified source. This makes it easier for everyone to take advantage of the information’s potential.
Improve your ability to build cross-channel marketing abilities
As your business works to create cross-channel marketing campaigns, you likely have to take the time to share data between departments, combine your various resources, and report on the data and information you’ve independently gathered to put toward a common goal. A CDP makes this entire process significantly smoother.
Everyone will begin by working with the same accurate data set. There will be no discrepancies regarding the data and the type of picture it presents about the targeted customer set. It will enhance the ability of different marketing teams to create common campaigns that work toward a single goal.
CDP vs. CRM vs. DMP: Choosing the right real-time data tools for your team
Although the value of the customer data platform might appeal to you, many marketing professionals find themselves questioning the value of the CDP as separate software. After all, many brands are already intimately familiar with software options, such as customer relationship management (CRM) tools and data management platforms (DMPs), and may already have one or both in their organization.
However, a CDP operates differently from these other types of platforms. This type of software offers unique implementations and abilities that don’t exist with other data tools. We’ll explore what separates these different options and how they can be used for customer data management and to drive organizational success.
CDPs vs. CRMs
A customer relationship management (CRM) platform also focuses on recording customer data, but it focuses on historical customer information and general consumer data. This platform can’t bring together the wealth of data that can come from a variety of different sources. Instead, it mostly contains information from web forms and sales representatives.
- A CDP can integrate more data sources. Integrating more data sources comprises an integral part of the CDP. Rather than rely only on the information filled out directly, the customer data platform can integrate information from different customer interactions and provide a complete profile of the buyer.
- CRM focuses more on sales data; The focus of CRM largely lies in sales. This platform helps track transactions and direct sales interactions with customers and contact information and some general demographic information to help the sales representative make their presentation. The CDP wants to create a whole picture of the customer for use across departments.
- A CDP provides a more comprehensive view. With the ability to bring in information from multiple data sources, including internal and external sources, the CDP provides a more comprehensive picture of customer needs.
- CRM doesn’t have the same capacity to integrate across departments. CRM platforms largely revolve around sales departments. They do have some limited data integration, but the information they provide doesn’t offer the level of insight for other areas of the company. The CDP has more integrations available and collects data that serves professionals throughout the organization.
CDPs vs. DMPs
Although a data management platform (DMP) will also gather customer data for use in engaging prospective customers, it has a greater focus on targeting customers with ads. With a greater emphasis on gathering information specifically for the brand’s promotions, it doesn’t collect the same type of information or stretch across multiple departments as easily.
- DMPs focus more on third-party data with limited first-party data. Customer data platforms bring together information from a variety of sources, largely relying on first-party data to build complete customer profiles. On the other hand, the DMP largely relies on third-party data to better target ads.
- DMPs have a greater emphasis on only advertising. The DMP is designed to improve the targeting and retargeting of customers through ad displays. Segmentation is key for this software. This means the information is not as useful to other departments and doesn’t provide unified customer profiles.
- DMPs rely largely on cookies, and the information expires. Since the DMP largely relies on cookies to collect the data it uses, the information is only contained for a set length of time—typically about 90 days. However, the CDP information doesn’t expire and is used to regularly update and fill out the complete customer profile, including how it changes over time and across touch points.
- DMPs often work to create categories of customers rather than individual profiles. Since the DMP has a primary focus on providing the information needed for targeted advertisements, it focuses more on building customer segments and groups rather than building profiles for individual buyers and prospects.
Implement your CDP with world-class expertise
For brands that want to take advantage of the latest developments in the marketing ecosystem, including the level of data collection available and the need to engage customers across multiple platforms and throughout the consumer life cycle, a customer data platform can be an excellent addition to the marketing technology stack.
When these capabilities are combined with the skills of experienced marketers, it can unlock tremendous potential for any organization. You can improve the customer experience and build revenue opportunities.
