Customer Data Platform (CDP) Explained
Hyper personalization requires extra effort to acquire customers. Their buying journey is as complex as it can be. Every potential customer interaction with a certain brand needs to be recorded and stored in one place. All touchpoints with companies’ products/services have to report information to one centralized data center called Customer Data Platform. Once all the combined data from multiple tools end up in the CDP, it is used to create personalized marketing campaigns to ensure that its efforts are on the right track. By serving relevant ads/content to potential customers, there is a better chance to convert them into actual customers. In this article, we are going to unfold the extra layers that a Customer Data Platform adds to one company.
Why is CDP so important?
To answer this question, we need to clarify how CDP works and what CDP does. CDP consolidates the customer data from all endpoints into one cohesive mass and delivers real-time data analysis for individual customer journeys. In a CDP you can clearly see what really happens when you send out an email. Not only the open rate or the CTR but also how many pages deep has a customer explored on your website or how many actions have s/he made on your app or does s/he explore your user guide on how to act.
Furthermore, the job a CDP does is lifting work from the shoulders of data analysts, marketers, and sales personnel. With the extra time in their hands now they would be able to craft highly personalized experiences for their customers to increase satisfaction and retention rates. As customers use different channels to connect with a brand it is most important that a company delivers consistent and seamless messaging across the board.
What data does CDP collect?
The data itself is not a crucial part of the process because the data itself is not information. It is a building block for analytics and visualization from which can be concluded customer journey optimizations. As managing data become more and more challenging because of regulations and restrictions you can see how important it is to have a CDP that collects, classifies, analyses, and visualizes data. Here are the 4 key elements of a CDP:
Personal data or identity data that gives a glimpse of the customer’s profile. Such data might be name, age, gender, location, contact info (email, phone), social media handles, employment info (company, position), etc.
Narrative or prescriptive data helps build a bigger picture of a customer. Such data might be family status (married, divorced, with kids), lifestyle (homeowner, pet owner, vehicles,), interests/hobbies (morning runner, collectibles, subscriptions, and memberships.
Behavioral data or quantitative data measures the engagement rate. Such data might be an online activity (product page visits, CTR, social media actions), email, and transactional information.
Qualitative data that explains the motivation of a customer to engage with the brand. Such data might be survey participation, feedback loop, and user preferences.
Main benefits of implementing CDP
There are some huge benefits of having integrated CDP into your organization. Here are the main once we identified:
Disguising anonymous visitors by collecting their data
Maps customer journeys
Tracks online as well as offline customer behavior
Analyses lifetime customer value
No replicated, mislabeled, or lost data
Real-time data analysis available
Consolidated data from all customer touchpoints
Helps optimize all marketing efforts
Collects first-party data that is more reliable
Improves customer retention rates
Data extraction is direct (not thru 3rd party cookies)
With CDP in place all departments will be aligned and no data siloes will be present
Follow a customer-driven marketing strategy
Omnichannel automation possible
Frequent updates on customer behaviors
Unifying customer data for company success
Leverage your customer data more effectively by considering the implementation of a Customer Data Platform in your organization. Customers have ever-changing behaviors that are triggered daily. They pivot from completely aligning with your messaging to partially agreeing with it to not liking it at all. Do not lose engaged potential customers by serving them the same experience across multiple touchpoints; rather, deliver diverse and unique interactions to convert them. CDP is here to help you on this mission.