Customer Data Platforms (CDPs) have gained immense popularity in the wake of the pandemic. Most businesses were compelled to go digital during the pandemic. This helps in critical customer efforts. It allows you to interact with all your customers and clients digitally. Further, there has been an influx of customer data. Brands have been turning to CDPs for collecting and using data. The rising demand and usage of digital media results in almost 73% of the companies have turned to CDP. Also, CDP has increased its revenues by nearly $1.6 billion.
What is Customer Data Platform- Ultimate Guide to CDP
What is the Customer Data Platform?
It is packaged software creating a unified customer base. It also helps in increasing sales and customer services. Also, it increases the customer service along with the point of purchase. It is an essential software solution to collect data from various customer touch points.
How does the Customer Data Platform work?
The CDP takes separate data sets to help create a unified customer base. It also helps to keep the customer profile with new data available. Some of the main processes to follow are:
1. Collection of data
Most of the CDPs don’t collect data on their own. They connect with other systems like Web Analytics to get the job done. It will connect with the first-party data at first. Secondly, it includes customer behavior for purchasing data.
It also connects with zero-party data. It is sharing information with the customer to communicate with the business. Zero-party data includes the center information that customers love to share.
2. Unification of data
The CDP helps you connect your databases storing everything in a single place. Teams try to understand various channels across the platforms. Furthermore, the consolidation helps unify the history and behavior of the users.
When all the data is stored in one place, the business has more control to give protection. After the information is unified, the company goes for segmentation. This helps you understand the audience better.
3. Activation of data
The software helps in building unified profile bases about the users. These include behavior, demographics, etc. The customers staying up to date with the marketing teams should be relevant in their jobs. Further, CDP helps make the data available to other systems in the business.
It allows various departments to use the customer identities. You can also build the customer segments through the existing ones.
4. Providing data insights
With the help of unified customer bases, the teams can cover across media channels. It allows businesses to analyze the users’ data well. With the right technology, it will improve the audience’s discovery too.
Advantages of Using Customer Data Platform
1. A better understanding of the customers
CDP gives a 360၀ view of the business to the customers. About 72% of the customers understand the business better with personalized marketing. When the customers get a personalized experience, they love to use it.
Also, the customers can recognize the brands to understand the customer journey better. Different transactions among businesses and customers are also included in it. The CDPs can understand the customer behavior too. Then it tailors according to the customer’s needs. When the companies do so, they gain long-term loyalty to create a good brand identity and image.
2. Option of campaign optimization
If you want to understand various marketing techniques, CDP is the best form. It runs on multiple channels and platforms. You get to know how well the business can cope with customers’ needs. It increases efficiency in return.
CDP increases the business insights by putting relevant data into the campaigns. This is done at the same place for comparative analysis. This leaves a deep understanding that the customers gain on their own. This helps businesses to improve their future promotions constantly.
Customer Data Platform automatically collects the data to provide a good customer journey. It provides better interaction between the customer and brand.
3. Discovering various new segments
The brands need to divide their target segments and audience. The segmentation is done on various factors like age, income, brand interaction, etc. When you communicate correctly with the right people, you always win.
When you implement CDP, it helps discover new segments on the way. You can apply all the analytics you know to the business. Also, you get customer data simultaneously and in the same place. The software relevant to the company is used. So, all the information is saved in it beforehand. It could be used anywhere you need to.
4. Reduced management costs
Various applications like Salesforce are installed into the software. CDPs help reduce costs since the data is present in the platform itself. Further, all the information is collected in a single place. You don’t have to pay anything for the cloud again.
When you have all the data in a single place, it becomes easy to follow the guidelines. You can make all your contacts anonymous to provide better data protection. People today want personalized interaction with brands. But on the digital forefront, there can be data leaks too. When you use data from a single platform, you monitor the data so that it is not stolen.
5. Long-term earnings
CDP helps you in solving immediate problems at a go. Each campaign is improved over the previous trial, so the errors are gone too. This helps in saving all resources and achieving high conversion costs. In this way, you can plan for your long-term earnings.
Need for Customer Data Platforms
Customers love switching between devices in the present times. All the information is available online, and the customers interact using multiple devices. All the data from the touchpoints are generated and synchronized to give a 360o view of the customers. This is the purpose of using CDP. CDP helps to know the first-party data. They will go incredibly well with all the brands in the future.
Also, there is third-party data collection phased out presently by Google or Apple. There are many independent departments to deal with the customers directly or indirectly. It isn’t easy to get data from various streams. It will need relevant team support and extraordinary customer service. The CDPs help to remove the data silos. These exist within the organization too. It helps in providing, compiling, and acting on all the data. It helps to bring all data to a single platform for the ease of the customers. This gives the marketers, and stakeholders incredible insights into the business.
How to Choose the Best Customer Data Platforms?
Selecting the right CDP for your business is quite a hectic process. There are various choices to explore, yet not something that should be considered lightly. Below, you will find the best method to utilize while picking a CDP.
1. Assembling the buying team
Even though the decision is yours, you need to include shareholders. Since you will be handling CDP from different departments, there should be uniformity. You will get the best customer experience with the tools that handle customer data.
2. Defining your challenges
If you want to know if CDP is best for your business, think of the system you will be using. You should define your challenges ahead of time. This will help you in getting the right solutions. Some of the examples you can include are:
- Decrease in the abandonment rates
- Identify all the priority customers
- Increasing engagement with the royalty programs
Take time to think about what you want the CDP to accomplish. Talk with all other stakeholders for their views.
3. Knowing your integrations
Make a list of the tools integrated with your software. This will help you in interacting with your customers. Some systems like CRM allow real-time chat services. Most businesses have the following:
- Business intelligence tools
- CRMs
- Google Analytics, etc.
Most CDPs offer the same services. They collect data from various parts and keep it in one place. Additionally, it’s what the future will be all about. These capabilities are helping the marketers in huge ways possible. The type of CDP you choose depends highly on the company’s needs. Even so, a lot of changes are being made in the industry. It is becoming challenging. So, how you will collect data affects the way people see your company.
Apart from it, there are a few things to consider while choosing CDPs:
4. Having accurate identity resolutions
The CDP should be able to unify all the customer identities. The single customer view is essential in CDP. If it is not created, then the whole point of the software will be useless.
5. Having extensive data integrations
This CDP will give you the right technology to unite everything you want. You should choose CDP that allows ingesting customer data. Also, it is active wherever it is held and whenever data is needed. The process could also be set again on a loop.
6. Customer segmentation
If you want personalization from your software, you should create custom audiences on the data points. Further, the audience uses multiple channels like emails, social media ads, etc. These come with deep linking from within. It allows seamless transitions between the programs.
Conclusion
If you are already using CDP, think of the current setup. See whether it will meet the long-term marketing goals of the companies or not. You should invest in tools for the short term as well. You don’t know how the market will perform in the future. Marketers should handle the misuse of data properly. CDP has helped businesses in many ways. Therefore, It is one of the essential parts of the company. Learn it if you want to use it. Without the CDPs, collecting data would be harder. CDP is the new game in business, so use it efficiently.
Simran works as a technical writer. The graduate in MS Computer Science from the well known CS hub, aka Silicon Valley, is also an editor of the website. She enjoys writing about any tech topic, including programming, algorithms, cloud, data science, and AI. Traveling, sketching, and gardening are the hobbies that interest her.
