Today’s omnipresent consumers navigate a wide-ranging array of touchpoints in their interactions with brands. As they do, they leave their footprints in the form of signals and intents. Many organizations fail to utilize this data effectively due to outdated approaches and tools that cannot translate the data to seamless customer experiences—in time and at scale.
This is where a Customer Data Platform (CDP) comes in.
However, what exactly is a CDP, and what makes it so different from others? In this blog, I will try to answer some common CDP-related questions such as these.
What are the common challenges of working with customer data?
Depending on the organization’s maturity, the challenges can vary. Organizations could lack adequately integrated data sets, while others simply cannot keep up with the volume of data they have to deal with. Another common challenge is the failure to capture and maintain accurate, relevant data. This prevents the achievement of a holistic customer view and the delivery of seamless digital experiences.
As organizations evolve on the data maturity curve, they could face additional challenges such as:
What data sources are brands are trying to integrate with a CDP?
CDPs build customer profiles by continuously integrating data from first, second, and third-party data sources like CRMs, data management platforms (DMPs), mobile, transactional systems, websites, social media platforms, e-commerce sites, and more. Other sources such as POS systems, core banking systems, order management systems, and even IoT devices can be consolidated to offer a complete, real-time view of the customer.
What is the difference between CDP, CRM, data lake, and data warehouse?
Data warehouses and data lakes are enterprise-wide projects, which means they are not tailored to marketing needs. Data warehouses are designed primarily to store structured data and to support data analysis. A CDP, however, can process both structured and unstructured data to support more complex segmentation, insights, and targeted campaigns.
A CRM manages customer data and tracks sales engagement and trade-related data over time. However, it cannot manage large data volumes from multiple systems for marketing activities.
Here’s a comparative chart:
How does CDP bring together disparate touchpoints to not just communicate with customers more effectively, but to catalyze top-line revenue?
A CDP is the bedrock of accurate, useable data as it helps brands build intelligent customer insights from consolidated, constantly augmented audience information. Equipped with robust audience identity resolution and AI capabilities, it helps brands build sophisticated segments, identify every customer, and derive individual propensities (e.g., time, content) for effective reach, engagement, conversion, and retention.
It is able to track individual customers across interactions and touchpoints to understand their behavior, leverage real-time data for contextual engagement, and deliver an evolving, tailored journey over time. With predictive and prescriptive analytics, it is able to offer actionable recommendations on how the marketer can better elicit more desirable responses from the audience.
All of these free the marketer from wasting marketing spend and incurring the ire of consumers because of irrelevant communications, fragmented journeys, and a poor understanding of the customer. It also frees them from exhausting, resource-intensive manual efforts required to consolidate, analyze, and activate data when only legacy, point systems are employed.
What should a marketer consider when identifying a good CDP?
While selecting a CDP, one should start by defining the objective for adopting such a solution. Next, ask more basic questions such as:
Get our infographic for a detailed list of the key questions that need to be asked when evaluating a CDP.
Brands must understand that having a CDP does not automatically result in optimal customer engagement and marketing impact. Unifying audience data is just the first step, but it will surely lay a robust foundation for the digital marketing transformation journey.
Get a comprehensive view of CDP and its business benefits in “Customer Data Platform: A Resulticks POV”.
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