What is a CDP and is a Customer Data Platform right for you?
As customer experience continues to evolve and becomes more digitally fragmented, achieving a single view of your customer will only become more difficult. If customer experience matters for your business, in addition to becoming more efficient, and improving revenue - a CDP is probably going to be a helpful addition.
What is CDP?
A Customer Data Platform (CDP) is technology or software that consists of a centralised database. It has the ability to ingest, integrate, manage and deliver customer data to other technology solutions in order to personalise the customer experience.
CDP software collects and integrates all forms of customer data with the intent to create a unified customer profile – also known as a single view of the customer. This view can be used to align all business efforts around a single source of customer truth. CDP’s can collect consumer behavior, demographic and transactional data, to track and analyse customer interactions with your organisation.
Now, small mom-and-pop stores with just a Facebook page aren’t going to need (or have the ability to manage) a CDP, but many others—from SMBs to the largest enterprises—can benefit from a CDP.
How do CDP’s work?
CDPs are composed of three main components: data ingestion, data storage, and analysis. Data ingestion is the process of collecting data from various sources. This data is then stored in the CDP, where it can be queried and analyzed.
Once the data is stored in the CDP, businesses can use it to create segmented views of their customers. These segmented views can be used to create targeted campaigns and offers. Additionally, businesses can use the data to identify patterns and trends in customer behavior and to track customer interactions over time.
Finally, businesses can use the data to analyze the effectiveness of their campaigns and to optimize their strategies. By using the insights gained from the CDP, businesses can optimize their campaigns and increase the lifetime value of their customers.
Keep the Technology Stack You Want Without Sacrificing Data Insights
Do you need one?
The number one thing to ask yourself is: Do you know who your customer is? If you haven’t solved the identity part, all of your advanced use cases are going to fall apart. So how do you figure out if a CDP is right for you — and which one’s right for you?
Use Case 1
A CRM is not a CDP
If your entire customer experience revolves around the in-store experience, with little emphasis on the online experience, a CDP is likely not going to deliver value. But if you complement your in-person experience with a website, engage with consumers on social media, have a CRM to manage your customer base, or do some targeted advertising, a CDP will bring all of the data behind the customer experience together in order to improve all of those efforts. Clearly understanding the business challenge and the pieces to optimize is critical.
Use Case 2
Your CDP needs to be flexible
According to Gartner, marketing leaders report utilizing only 58% of their Martech stack’s potential. It’s little surprise; with so many technologies to keep updated and integrations to manage, marketers are going to let some things fall through the cracks. Technologies aren’t being used and silos of data are sitting around. You’ll need a Customer Data Platform that works with all of the customer data-reliant technologies in your stack. But the Martech stack is volatile; look for a futureproofing CDP that is flexible enough to work with what you have today and what you’ll have tomorrow. A CDP not only ensures the longevity of the CDP investment, but also the longevity and productivity of your other Martech investments.
Use Case 3
You need the right team
You will need a strategic, data-driven thinker who “owns” the technology for sure. You’ll also need executive buy-in to support this transformative technology. But know that there is no set blueprint for the CDP team you need. Even small teams can deliver huge value with just a single use case. Just like you need the right team, you need agreement on the goals and processes that are driving your CDP initiative. Understanding where your data maturity is at as an organization can help you determine what a CDP can do for your business.
Benefits of Using a CDP
CDPs offer a number of benefits to businesses, including:
By creating a comprehensive view of their customers, businesses can create more effective marketing campaigns and offers that are tailored to their customers’ needs and interests. This can lead to increased customer loyalty and higher customer lifetime value.
CDPs enable businesses to create segmented views of their customers, enabling them to create more targeted campaigns and offers.
CDPs enable businesses to collect, store, and analyze data from multiple sources quickly and efficiently. This can save businesses time and money, as they no longer need to manually collect and analyze data.
By collecting and analyzing data from multiple sources, businesses can gain a deeper understanding of their customers and their behavior, allowing them to create more effective marketing strategies.