Is a CDP the Secret Weapon for Modern Marketing?
If you want to drive revenue and growth in today’s intense direct to consumer environment, then you need to have a tool and a system just as fierce.
Do you know when the absolute best time to engage with a customer or potential customer is? It’s when that person is engaging with you! So, you better have a tool that can manage that real-time engagement and deploy the most effective tactics taking into consideration the individual behavior profile of that person.
A tool that can help you gain insight into the minds of your customers and potential customers, a tool that can empower your marketing efforts in real-time, and a tool that can optimize your brand loyalty.
A tool that delivers the immediacy, accuracy, and unity that you need, and that can inform you on how you can optimize your marketing efforts.
These are just a few of the things that a Customer Data Platform (CDP) can do for you, and if you’re not using one, you can bet your competition probably is.
What Is a CDP?
Companies are gathering data from a wide variety of sources: mobile phones, social media, cars, smart speakers, connected TVs, web cookies, pixels, and more. This data is a gold mine for marketers if you can get it in a useful format.
A Customer Data Platform (CDP) will collect your real-time customer and potential customer data and then aggregate, organize, and structure that data into a single consistent and accurate profile of each person. The data is then made available for analytical reporting and use by other software, systems, and marketing efforts.
Further, because CDPs include prebuilt connectors to other systems, it will make data access faster and easier for your marketing teams so they can develop an ongoing and more in-depth understanding of who your customers are and what they want. Is this particular person a longstanding, loyal, high-value customer? Or is this the first time they’ve engaged with your brand? You can use this data proactively in the development of targeted and more personalized campaigns. It can also help you to predict the optimal next move for the engagement of a particular person. Ultimately this information can assist your business in winning the sale of a potential customer as well as how to extend retention and improve the LTV of your current customers. Customer service teams can also use a CDP by providing additional information to them on how to cater to their support to each individual.
You might be saying to yourself, "Hey, wait a minute I have a CRM or a DMP that we already use for that.” Unlike a CRM, a CDP will autonomously create a unified customer profile with data gathered across a variety of online and offline channels as opposed to only intentional interactions via manual entry of some sort. Further, and best explained by David Raab, founder of the CDP Institute, “CDPs work with both anonymous and known individuals storing 'personally identifiable information' such as names, postal addresses, email addresses, and phone numbers, while DMPs work almost exclusively within your Adtech ecosystem with anonymous entities such as cookies, devices, and IP addresses." I’ll go further into these differences at a later date.
What is Customer Data?
Ok, let’s take a step back for just a minute to review the various forms of customer data out there. It would help if you had all of this top of mind when reading the next few sections to visualize the possibilities thoroughly. Customer data is information consumers leave behind as they use the internet and interact with companies online and offline. This information is highly valuable to businesses
There are four primary forms of customer data that CDPs collect and organize; Identity, Descriptive, Quantitative, and Qualitative.
Identity Data
Identity data builds the foundation of each customer profile in a CDP. This type of data allows businesses to identify each customer and prevent costly replications. This form of data includes information such as an individual's name, demographics, location, contact, and social media.
Descriptive Data
Descriptive data expands on identity data and gives you a fuller picture of your customer. Keep in mind that the categories of descriptive data can vary based on the type of company. Descriptive data can include information such as an individual's career, lifestyle, family, and hobbies.
Quantitative or Behavioral Data
Quantitative data allows businesses to understand how each customer has engaged with their organization, whether through specific actions, reactions, or transactions. Quantitative data includes information such as transactional data, Recency Frequency and Monetary Value (RFM), email communication, online engagement activity, and customer service inquiries.
Qualitative Data
Qualitative data provides context for customer profiles; it gives customer data personality. This type of data collects any motivations, opinions, or attitudes expressed by customers, whether relevant to the company or not. Qualitative data includes information such as motivation, opinion, attitude towards your brand.
CDPs exist because customer data has become crucial to both business and marketing operations.
Why You Need To Have a CDP
Without customers, you wouldn’t have a business, and success for a D2C company today means keeping the customer front and center by creating personalized relationships, especially in our marketing efforts.
To do this effectively, we not only need to maintain a customer's purchasing history, but we also need to collect and decipher as much information about how, when, and why a customer chooses to interact with us. Below are a few of the benefits that a CDP can provide.
CDPs Avoid Data Silos
Silos are bad. They create a less collaborative environment, slow the pace and productivity of your company, and threaten the accuracy of your customer profile data. Further, marketers will find that because their data and marketing operations are not collaborating effectively, multiple marketing campaigns can begin running so distinct from one another that you'll start to deliver fragmented user experiences.
CDPs Collect Data Directly from Your Audience
There are all sorts of anonymous and known first-party data floating around in your martech stack from tracking tools and intentional actions. A CDP will unify all of that information into a single consistent and accurate profile of each customer, providing you with confidence that you have the most precise audience information possible.
CDPs Help You Get to Know Your Customers
To develop customer-centered marketing, you have to know your customers and what makes them tick. By building individual customer profiles, you can accurately and effectively analyze important customer behaviors, create identity graphs, and develop data-driven segmentation and targeting for a more personal experience for your customers and potential customers.
CDPs Unify Cross-Channel Marketing Efforts
Because you are busy running multiple campaigns at once, you know the time and energy it takes to share and educate all of your team members and stakeholders about the data you’re using and new data that your collecting from those marketing efforts. Luckily, a CDP will unify multi-channel and cross-channel marketing efforts by supplying consolidated and accurate data. Plus, since a CDP works autonomously in real-time, it is continuously collecting and organizing new data that can organically optimize your campaigns as they grow, not to mention inspiring new content as insights are born.
CDPs Allow You to Leverage Data More Strategically
For marketers who have invested in data collection or at least built reliable channels to collect customer data, it can be a substantial competitive advantage when you can unlock the power of all of your data. Nowadays, every marketer strives to develop more customer-centric marketing efforts and to run orchestrated marketing campaigns seamlessly, but you can't obtain your full potential if you don't have mastery of who your audiences are.
Are All CDPs the Same?
The simple answer is no. All CDPs specialize in data management, data analytics, and data orchestration. Still, the CDP vendor landscape is evolving so quickly that systems can vary significantly from vendor to vendor as they each try to claim new areas of specialization to meet the needs of their ideal users better.
As a result, CDPs today tend to organize by specializations such as B2C or B2B, industry verticals such as healthcare or e-commerce, and the scale of an organization such as enterprise, mid-market, or SMB.
So then how do you choose the right CDP solution for your company? That's an excellent question and one that I'll get into next time.