A Customer Data Platform (CDP) centralizes data collection from multiple channels and sources, performs data cleansing and identity resolution, and unifies customer profiles to create a unified persistent customer profile database. CDP can integrate the customer profile database with other marketing, customer service, and customer experience management systems. CDP can also collect data from first-party, second-party, and third-party sources, such as websites, web forms, social media, emails, eCommerce channels, CRM, DMP, and POS systems, which include personal, demographic, behavioral, transactional, engagement, device, and other sorts of customer information.
The growing use of CDP solutions can be attributed to the necessity to prioritize and leverage data that enables personalized customer interactions in an omnichannel environment. In order to enhance marketing and customer experience initiatives, businesses across all sectors are switching to CDP solutions to replace antiquated profile repositories. CDP is quickly becoming a key component of an organization’s tailored customer experience initiatives.
The following are some of the key capabilities of CDPs:
- Data Integration
- Identity Resolution and Profile Unification
- Intelligent Customer Segmentation
- Reporting and Visualization
- Activation
A Customer Data Platform generates profiles comprising numerous MarTech IDs, which can be utilized to trigger customized messaging to help brands improve their customer focus and data-driven decisions. Successful implementation of CDP yields greater revenue and savings by improving knowledge of customer data and responsiveness of users
Even though a CDP can be considered a marketing-focused data warehouse, its foundation is built on collecting enough data to support a wide range of decisions. When marketing is done well, customer value is used to target and improve customer experience to make customers more loyal.
CDP provides insights that can produce and send personalized product and service recommendations to each unique customer. Customers are the intended targets of personalized promotions delivered via Insights, which are incorporated in channels like email and messaging, social or mobile app notifications, web and eCommerce, advertising, and more. It aids in delivering relevant information to re-target website visitors who quit a cart or session and triggering real-time mobile messages based on a user’s location. It also supports real-time onsite advertisement targeting based on first-party audience segments and interests.
Even with all the CDP features mentioned above, organizations still lack some of the fundamental elements that must be present in a CDP to be more effective, which include:
- Alignment of data strategy and needs: A CDP is only as good as the data imported into it, and formulating a unified data strategy with a defined end objective is essential. If all needs are not explicitly established, data silos could remain, preventing an organization from maximizing the benefits of a CDP. If not planned and performed with a clear strategy in mind, “messy data can easily convert into a messy CDP.” Data can be messy, and a lot of scrubbing and cleaning needs to be done before integrating with the CDP.
- System-wide interoperability: When making the decision to move forward with a CDP deployment, a typical conundrum that marketers face. CDPs need to be constructed in a way that makes it simple to integrate them with a wide variety of different kinds of software and hardware. The integrations must be less complicated and call for only a little assistance from the IT department, regardless of the method used, whether through APIs or plug-and-play connections. Marketers should select a vendor that can provide a quick, hassle-free integration with various systems and applications.
- Choose a hybrid CDP implementation: The primary function of a CDP is to aggregate and unify data from online and offline, partner, and audience data sources. However, some organizations are uncomfortable sharing their first-party customer data with a CDP. In this scenario, they should choose a hybrid CDP technology solution that can store their valuable and sensitive information on-premises while keeping other data on the cloud.
- Consent management involving active oversight: In the era of digital privacy, as evidenced by recent regulatory reforms such as GDPR, obtaining the users’ consent for all types of analytics and data collection is an ongoing obligation, not a one-time effort. To meet the privacy requirements, data governance must be regularly reviewed, followed by updated consent management. At the same time, this ensures that data can be utilized and processed to the level required to generate people-centered insights.
- A company-wide plan is necessary for being completely data-driven: A company cannot become data-driven simply by implementing a new solution. In order to successfully implement a CDP, it is essential to adopt a company-wide approach and maintain consistency. Combining a bottom-up strategy with cross-functional teams while keeping important business requirements in mind can assist in this situation. Similarly, support from the executive level for data-driven initiatives can considerably accelerate the adoption rate following the implementation.
The implementation of CDP eliminates data silos, encourages cross-departmental collaboration, and propels digital transformation, all of which contribute significantly to the bottom line. Changes can be challenging, but they need not be excruciating. The incorporation of change management resources and methodology into the response plan will guarantee that the policies, teams, and individual contributors are not only ready to adopt new ways of working but are also immediately equipped to put new capabilities to work, resulting in a higher return on investment and a shorter time to value.
Author:
Anish Krishnan, Analyst at Quadrant Knowledge Solutions
