What’s a Customer Data Platform?

What’s a Customer Data Platform?

Customer Experience Customer Management Data Center

3 minutes Read | Published June 9, 2020 | April Toledo

An online shopper’s path to purchase hardly follows a straight path. He or she might spend a lot of time browsing among e-commerce sites before settling on a product or service that might benefit him or her best. Want to get to know your customers better and guide them towards buying from you? A customer data platform (CDP) comes in handy. This customer profiling tool uses data from various sources and correlates them to help you improve buyer experience.

How does a customer data platform work?

Treat CDP as a cornerstone for managing your customer’s purchase journey. Your buyers expect to seamlessly connect with products and services that are relevant to them. They want something that meets their needs, and anything less or regarded as irrelevant will be seen as a waste of time. Keeping up with their touchpoints, such as how they respond to various phases in their customer journey, will leverage your competitive advantage. 

To make a CDP instrumental, integrate it with your customer relationship management (CRM) platform. CRM is where you manage your interaction, transactions, and other customer-centric processes with your buyers. You’ll see how applying the CDP-CRM combo can be effective in strategizing personalized brand communication across various marketing channels. The data CDP collects, organizes, categorizes, and analyzes include:

  • Past purchases
  • Browsing history from websites and mobile apps
  • Demographics
  • Events like downloads, clicks, duration of stay in a site, etc.
  • Product usage
  • Partner and third-party transactions
  • Offline sources like POS, CRM, and loyalty programs

...and many more. 

Because CDP information is sourced from all the devices and digital tools that your customer uses, privacy and security are components that are important to ensure your CDP’s maximum performance. Your CDP must be able to detect and shut off any unauthorized bot trackers that are outside your tag management systems (TMS). This can make it easier for you to unify information taken only from the most relevant data sources, enabling you to drive timely and relevant interactions.

What are the key benefits of a CDP?

In a bigger picture, a CDP can improve your business through improved buyer relationships and more comprehensive software and marketing effort execution. Among its key benefits include:

Avoiding data silos

Data silos happen when data is accessible only in one department. The rest of your company could have benefited from this information but for some reason, it was isolated from them. The result? Inhibited productivity due to unavailable or omitted intelligent resources that end up getting wasted. For example, the data about buyer demographics that was made accessible only to marketing could have boosted the efforts of sales.

With CDP, customer data is integrated into one place where your authorized personnel can access them. This can be a ground for better collaboration among your teams.

Get to know your buyers better

CDP is focused on collecting first-party data or data that your brand owns through direct interaction with your target buyers. The data can include pages with the most site visits, your number of subscribers, or the increase of your social media followers. CDP also gives you high-quality insights about your customers as well as the highest visibility and ROI from your marketing efforts. It can tell you the items that your customers frequently buy, the topics of the blogs on your website that they often read, and the concerns they bring up in your social media conversations.

From all that data, a CDP builds profiles for each of your customers, constructs their identity graphs, and analyzes their purchase behavior. The patterns that emerge equip you for more effective and accurate promotional efforts. You as the marketer would have a more accurate idea of the products your customer prefers, the ones he ignores, and the kind of emotional or informational trigger that can make him respond to a call-to-action in his buying journey.

Consolidating cross-channel marketing efforts

With an accurate, consolidated database that CDPs build, your cross- and multi-channel marketing executions are unified. For example, the stats from your customer website visits can be correlated to the items purchased in your e-commerce site to the actual time of day (or night) that online transactions are being made. Armed with all that information, your marketing department can become more nimble and responsive. Your campaigns become more targeted and effective. The usual waste that comes with guesswork is reduced, if not altogether avoided.

There’s a rich source of information everywhere, yet data quantity is nothing if you can’t make sense of it. As such, CDPs can empower your business towards building more relevant, timely, and profitable interactions with your customers.

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