The Clock is Ticking: It’s Time to Leverage Customer Data Platforms
The period of leveraging third-party cookies is coming to a screeching halt, with new regulations and privacy concerns arising daily. While this may be troublesome for marketers who rely on this data, there are options beyond third-party cookies. The time to migrate to a Customer Data Platform or CDP is now.
The key to digital marketing is high-quality customer data. Marketers know that the much-bandied about phrase know your customer (KYC) goes beyond just knowing their names and what they purchased in the past. High-quality data results in superior engagement and high lifetime-value conversations.
How well do you really know your customers though? Traditionally, organizations have used customer relationship management (CRM) systems operated by salespeople to organize and manage data from customer interactions. For example, a history of a customer’s past purchases would be tracked, or utilized to create a record of potential customers. These are then analyzed to drive sales.
Further customer-relevant information is stored in other discrete, unconnected systems. Marketing systems and customer service information might only partially appear in CRM systems while unstructured data such as those from delivery platforms, i.e. systems that interact at channel touch points such as email software, webpages, social media or surveys would not be connected to those systems. It was hard to build up and maintain a persona of the customer from all this data that also stayed current.
Besides demographic and transactional data, you can have behavioral data on the web and mobile from data management platforms (DMP), such as those that serve advertising and are used for retargeting using cookies – information that might expire in 90 days or the cookie’s lifetime – as well as in-store interactions.
Each of the above kinds of data come with different levels of personalization.
What is a Customer Data Platform?
All the information listed above can now be captured, labelled and stored in a CDP to form a more complete view of the customer to allow for better marketing efficiencies.
Indeed, the CDP Institute defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems.”
A CDP these days not only manages data from a wide variety of customer interactions and combine them with marketing content, but also make sit easier to comply with data protection regulations. It is usually managed by the marketing team without much technical support.
Features of a CDP
CDP software must include features such as the ability to
- scour data from all sources, both online and offline, ideally in real time,
- retain all original detail and segment them according to rules
- store data for as long as users want,
- build unified customer profiles including identity, attribute and device data, and offer them to marketers in a web-based interface
- integration with external systems to enable activation.
The data from a CDP can be used to create a 360-degree view of the customer and their journey that is individual and unique. Such a segmented model leads to superior insights and personalization, and as a result, increased engagement en route to a consistent multichannel user experience. Anonymous users are recognized as loyal customers who interact with the company via their channels of choice.
CDPs could take the form of solely data assembly; data and analytics; campaigns (data, analytics and customer treatments); and delivery (data platforms, analytics, engagement and message delivery). They must have the ability to send segments and segment instructions to other execution tools for the execution of campaigns, mobile messaging and other channel activity. Some may even include activation features such as recommendations, optimization and testing.
Advantages of using CDPs
Unique view of the customers: A CDP links internal CRM first-party data, second- and third-party data from business partners and providers, offline data, event and activity flows, data from the back office and data on transactions, customer behavior and experience. This granular data creates dynamic and unified profiles that can be updated in real time.
Agility in decision-making: A CDP’s ability to use real-time information such as user behavior and changing technology trends to stay updated allows an organization to stay flexible and thrive in a dynamic business environment. They can do this by tweaking promotional metrics, pricing strategies, inventory scheduling and optimizing relationships with supplies and partners.
Democratized business intelligence: The availability of customer data in one centralized platform allows users from different departments, customer touchpoints and cross-channel marketing efforts to have access to the same data.
Increased operational efficiency: Using CDPs wisely makes even more sense to get maximum value from the somewhat sizeable investments in marketing technology. They allow organizations to be more competitive – centralized information at the push of a button, ready-to-use integrations and real-time analytics reduce the time between getting insights and using them to make decisions that impact the bottom line.
A better marketing and user experience: A CDP combines operational data from the back office with front office and experience data. On the basis of permissions given, companies can offer their customers a personalized experience that is tailored to their needs and wants at the right time via the preferred channel.
Reliable data protection: A good CDP automatically recognizes the purpose for which data is recorded and sets the course for a holistic data protection strategy. Collected information is only added to the customer profile if the required declaration of consent is available. With the third-party cookie falling in importance and increased regulatory oversight of data collection, it’s expected that 1 in 4 CMOs will invest in consent and preference management software in 2021. Customers can trust that their data is optimally protected.
Choosing the right CDP for your business: CDPs are already a key part of marketing automation toolkit. With a tsunami of data expected from Internet of Things applications, they are going to become its beating heart.
To narrow down your choices, start with an audit of your marketing goals and current systems inefficiencies such as the state of your data. Then, identify the features of a CDP that will help you reduce those inefficiencies and achieve those goals.
Peer-to-peer review site G2 has an overview of the most popular CDPs, a list which includes Segment, Exponea, SAP Emarsys, Listrak, Tealium, Optimove, Adobe Experience Manager, and Salesforce Interaction Studio.
As experts in the CDP space, we at BORN would love to connect for an exploratory session to evaluate your current and future marketing technology strategy.