A Customer Data Platform (CDP) is a software that gathers and organizes customer information from multiple touchpoints and is utilized by other applications, systems, and marketing efforts. CDPs capture and organize real-time data into individualized customer profiles.
A CDP provides a comprehensive picture of your clients on an individual basis. It gathers first-party consumer data (transactional, behavioral, and demographic) from a variety of sources and systems and links it to the customer who generated it.
This produces a full customer profile, also known as a single consumer view, which may be utilized by 3rd-party tools or built-in marketing automation solutions to carry out marketing activities and evaluate their effectiveness.
Characteristics of CDP
A Ready-to-Use Solution
Customer data is logically arranged and readily accessible. To establish and maintain the CDP, some technical tools are needed, but it isn’t as complicated to use as a traditional data warehouse.
Individual Customer View
Individual data profiles for each user are generated by a CDP and presented in a visual format, allowing you to analyze the customer from every angle. Because all client information is kept in one central location, this 360-degree perspective of the consumer is feasible.
Unification of Customer Data
Customers are given a common view of their data that is consistent, accurate, and up to date.
Data Accessibility for 3rd Parties
A CDP is ready to be integrated into third-party systems that focus on adtech and campaign delivery.
Skill Required for CDP
A CDP is a marketing-oriented tool, unlike some other database software. That does not necessarily imply that a CDP can be used without technical assistance. An organization will generally require the following three roles to get the most out of a CDP:
- Marketing personnel: someone who understands the market and can make suggestions for business-centric use cases for the CDP.
- A Person with Analytical Skills: a person who understands how to create custom dashboards, knows what metrics to track in them, how to analyze A/B tests, and can communicate findings to the marketing team.
These don’t have to be three distinct individuals, but you’ll need all of those talents to get the most out of a CDP.
Importance of Customer Data
Customers today have a lot of needs from businesses. They’ve had outstanding personalized service, and if you want them to continue doing business with you, you’ll need to continue providing it. These are required for today’s clients: a constant client experience across channels, relevant recommendations, and customized communications.
Few businesses can provide these experiences. However, if you can’t fulfill clients’ heightened expectations, you have a problem. Customers will head elsewhere if they believe you don’t care about them. The battle to reclaim those customers will be far more challenging than gaining their business in the first place.
This is why having well-maintained, accessible, and informative consumer information is so important. And now, thanks to a strong CDP, it’s feasible. It’s all about obtaining the appropriate data.
Types of Customer Data that CDP Work With
The sheer quantity and velocity of digital information make it difficult to comprehend, and conventional database software is insufficient to handle it. A CDP, on the other hand, was created with this type of data flow in mind.
The most dependable approach for a CDP to get this data is through their SDK, although most can also ingest data from other sources via JSON or bulk ETL transfers.
A CDP can process a wide range of data, including:
- Customer attributes
- Transactional data
- Campaign metrics
- Customer service data
How to Put a Customer Data Platform to Use? (Key Use Cases)
CDP vendors can be numerous. When selecting a vendor, it may be worthwhile to think about the list of use cases you wish to accomplish with the aid of CDP. While high-level goals (improve the client experience, increase loyalty) are vital, you must also understand how a CDP might help you achieve those aims through lower-level use cases.
Below are some of the most important use cases.
Connection from Online to Offline
Establish a complete customer profile by merging online and offline activities. When consumers come into a physical location, record them based on their online actions.
Personalization and Segmentation of Customers
Customers are segmented according to their habits (RFM, LTV prediction) and then given a personalized, omnichannel experience throughout the full customer lifecycle.
Customer Scoring with Predictive Analytics
Enhance your client profiles with predictive data (purchase probability, churn rate, visit frequency, email open).
Lookalike Advertising and Smart Behavioral Retargeting
Integration with Facebook Ads, Google Ads, Analytics, and Doubleclick allows you to run effective acquisition and retention (lookalike) campaigns outside your website using insights.
Recommendations for Products
Create and utilize various recommendation models, including “similar items” or “customers who bought,” to provide your customers with the best online shopping experience while also increasing brand loyalty and product/service sales.
A/B Testing and Conversion Rate Optimization
Change the appearance of your pages swiftly. Use clever website overlays (pop-ups) or send cart abandonment emails to boost your ROI. Make various layouts and test which one performs better with the automated A/B testing function.
Automation for Omni-Channel Setup
With personalized and timely messages delivered to their preferred channel, you’ll be able to both acquire and keep a devoted client by following them throughout their entire lifecycle.
Enhanced Email Deliverability
Boost email open rates. You may target users with the right distribution time based on their email opening patterns, and you can get in touch with them at this optimum moment using an AI-powered algorithm.
Optimization of Reviews
Get more positive and constructive online evaluations from your consumers by using personalized omnichannel communication and NPS survey analysis to improve your company’s customer service.
How does CDP Improve Customer Lifetime Value and Foster Customer Loyalty?
Giving your consumers exactly what they’re searching for – a consistent, high-quality, and customized experience – is the most effective approach to build customer loyalty. Customer information systems enable companies to deliver these experiences on a large scale, personalizing each customer’s journey.
CDPs provide a way to create customer loyalty by resolving the issue of dispersed, siloed data. They combine consumer information in such a manner that large-scale personalization is feasible (though personalization tools are not always included in a CDP).
If your data is locked up, you won’t be able to provide a uniform experience for your consumers. You can’t give the omnichannel experience customers desire without a central data repository, since you can’t provide up-to-date interactions via any channel.
How to Pick the Right CDP for Your Company
You’ll need to decide which vendor to use after you’ve decided a CDP is the best solution for your company. The variety of alternatives might be intimidating, so it’s critical to have a strategy in place while purchasing.
Some of the aspects of the buying process will differ from business to business, but certain regions should be similar for most firms.
If you find that you have a large amount of consumer data, but struggle to collect it, analyze it, and use it properly, a CDP can help. If you’re unable to provide a genuine connected customer experience across multiple touchpoints, monitor consumer behavior across all channels, and make recommendations to your customers based on their actions or behaviors, your company may benefit from a CDP.
With the appropriate CDP and a strong data strategy, you can satisfy the objectives of every marketer. You get an immediate, integrated view of each customer across online and offline interactions, allowing for real-time insights and interactions when they’re most needed.
Wigzo can be the right CDP for your business needs. Start your free trial with Wigzo today!