Many marketers view customer data platforms or CDPs as the apt solution for addressing several challenges. However, others are still skeptical, envisaging problems. It can help them if they comprehend all the aspects of a customer data platform and what it offers. Let us explore what CDPs are all about and how it can help marketers.
What is a Customer Data Platform or CDP?
A customer data platform (CDP) is packaged software that helps marketers tackle customer information in a more organized way. The idea is to create authentic customer profiles via knowledge gained from various sources (first-, second-, and third-party). Such parties include social media, CRM (customer relationship management), DMP (data management platform), emails, etc. It becomes possible to set up a unified and persistent customer database, which can also link up with other systems, software, and marketing strategies.
Importance of having a Customer Data Platform (CDP)
Customers only award loyalty to organizations that take note of their expectations and respond to them in real-time. They appreciate it if organizations adopt modern methods of marketing across novel devices/channels to enhance their experiences. A CDP helps in:
- Gathering relevant information about each customer’s demographics, likes and dislikes, etc. It can then categorize customer profiles into diverse groups.
- Identifying customers across a range of channels via different tools. Thus, the platform sets up and monitors a persistent customer identifier.
- Setting up and maintaining omnichannel audience segmentation across the globe.
- Activating the unified customer profile and insights that the CDP generates.
Benefits of having CDP
As the name suggests, CDP focuses on building many customer profiles. First, it garners information about the customer from various sources. Then, it arranges it to form a comprehensive, single view of the customer. This single profile is visible across multiple channels and devices.
CDP is a tool that sets up a technology stack, which adjusts in alignment with technological advancements and changing customer behavior. It becomes possible to democratize data. This means that a CDP permits various departments and customer touchpoints (customer service, marketers, etc.) in an organization to access and use this data to its advantage. It can observe customer behavior and provide enhanced customer experiences.
A CDP saves time on integration work via a centralized customer database initiation. In addition, tools and technologies, business rules, and audiences, all reside in one location. Thus, day-to-day operations are practical and efficient.
Compatibility between CDP and other marketing technologies
Three entities are involved here – DMP, CRM, and CDP. Data Management Platform (DMP) is a marketing tool that focuses on improving advertising, media purchasing, and re-targeting audiences. DMP and CDP are mutually beneficial. DMP can borrow customer profiles from CDP and utilize them for advertisement targeting. In turn, a CDP can add more information to customer profiles by borrowing data from the DMP database. DMP stores information garnered from second and third-party sources. customer relationship management (CRM) is a tool that aids in the healthy management of interactions between the organization and its regular and potential customers. It can lend customer data to the CDP.
Integrate all channels into one system.
This helps to optimize success in marketing and return on investment (ROI) in several ways.
Unlike in earlier years, today’s customers carry the Internet with them wherever they go, in the form of smartphones. Therefore, advertisers and businesses may approach diverse audiences from anywhere. Multiple devices and platforms permit higher engagement with customers. Therefore, the sales graph should display a steady rise. It becomes easy to approach the always-on-the-go customers. The Internet places no geographical location or time of day/night restrictions. In addition to smartphones, people also favor laptops and tablets.
Many businesses do not have the sound technical knowledge or the requisite skills to deal with the appropriate usage of customer data. Regardless, they experiment with audio, video, and social marketing, such that the ROI is excellent. If multiple channels come together in the best way possible, the organization may increase its customer database with the lowest cost per acquisition rate. The organization may study the data from various channels and determine which one proved the best for customer engagement. Advertising strategies must ensure that the appropriate content targets the right customers in the right places. When customers receive a great brand experience, they will become loyal/regular purchasers.
Drawbacks to not using CDPs
Even the most glorious advertisements, or the costliest marketing strategies, can only reach a limited audience. If the target audience is not the correct one, the team will have to review the content of the advertisements and make changes. This is an additional expenditure. Instead, if a CDP were in place, the whole process of collecting customer data would be automated. The organization can reach out to every corner of the globe, thereby saving time, effort, and money. However, no tool/technology is perfect. Therefore, CDP does have issues, which will require resolving. For instance, the new regulations regarding data privacy, reaching out to customers in real-time amidst heavy traffic flow in the virtual world, etc., is a challenge. Nonetheless, a CDP is still a great tool to have, significantly as its advantages far outweigh the disadvantages. With professional support from solution providers like DforD, leveraging the true power of the customer data platform (CDP) to drive your marketing decisions can become a lot easier.