No matter what kind of company you have, or what industry you operate in, you have to ask yourself continuously how you can offer the right product or service to potential patrons at the appropriate time.
Meeting this objective is a significant challenge, and one that many companies fail to find a solution for, which is why a Customer Data Platform (CDP) is so beneficial. This software is made for leveraging the volumes of data you have to create connected customer experiences and boost customer retention.
To learn more, keep reading for the essential things you need to know about implementing a CDP.
1. CDPs provide a consolidated view into your customers' behaviors and preferences.
When you opt to implement a CDP, you provide your business with a unique and unified way of seeing into your customers' minds and needs. This software is specifically designed to collect and organize all of your customer data across all touchpoints. By arranging this real-time data into individual, centralized customer profiles, your CDP can be utilized throughout your organization and employed in other software, systems, and marketing efforts.
Your CDP generates these customer profiles by combining data from various sources, including your CRM, transactional systems, email and social media forms, online behavioral data, and more.
The customer data you want to consolidate will range from Identity Data (name, demographics, location, contact, and social) to Descriptive Data (career, lifestyle, family, and hobby). You may also include Behavioral Data (transactions, email communications, online activity, and customer service information) and Qualitative Data (motivation, opinion, and attitude information).
By implementing a CDP, you transform your marketing and sales funnel into a continuous wheel with customers firmly in the center, rather than as an afterthought. It also offers opportunities to find new audience segments as marketers can divide each segment even further into smaller sections to create more tailored messaging.
In other words, CDPs have the potential to improve the efficiency and effectiveness of your marketing and sales departments significantly.
2. CDPs offer significant benefits to all organisations.
Before you decide to implement new software into your organization, you want to ensure that it will bring significant benefits. Luckily, CDPs do that... and much more.
Some of the biggest benefits of implementing a CDP include improved advertising ROI, data mining for consumer insights, real-time web personalization, and simplified customer data.
By combining all your first-, second-, and third-party data into one place, a CDP removes any struggles you may have in combining or utilizing all the data you gather. Furthermore, it enables you to identify each step of the customer journey and have a deeper understanding of your customers and their behavior. This, in turn, provides your sales, marketing, and service teams with a more comprehensive picture of the customer and brings you closer to your goal of being customer-centric.
When used correctly, a CDP can also bring a significant rise in revenue. Through this consolidated data and more in-depth customer understanding, you are better positioned to conduct well-targeted marketing and more effective customer engagement, leading to higher conversion rates. The best CDP solution will identify your highest-value prospects through predictive analytics while also providing a unified view of the customer online and offline touchpoints.
What’s more, a CDP makes it easier to gather the relevant insights related to the performance of specific campaigns. By implementing this software, your marketing team can recognize the effectiveness and result of the campaign. Armed with this knowledge, they can develop their future campaigns to be more effective.
3. CDPs are not the same as CRMs or DMPs.
One of the most important distinctions that has to be made is that a Customer Data Platform or CDP system is not the same as a Customer Relationship Management system (CRM) or a Data Management Platform (DMP).
While both your CDP and CRM will compile customer data and offer significant value throughout your company, they don't produce the same results. A CRM captures a consumer's intentional interactions with a company and only reports on known or potential customers. On the other hand, a CDP generates consolidated customer profiles through data accumulated across various touchpoints and collects anonymous visitors' data.
A CDP is designed to manage numerous data points, whereas a CRM can only handle individually entered data. Additionally, your CDP can track online and offline customer data while a CRM can't collect offline data unless manually entered. Therefore, you want to use your CRM to analyze your sales pipeline and forecasting, and your CDP to analyze lifetime customer behavior and journeys.
DMPs, on the other hand, are ideal for influencing advertising to ensure you are better targeting ads and reaching the right audiences, as they assemble (mainly) third-party data and use anonymous customer identifiers (such as cookies, etc.). This is different from what a CDP can offer.
4. Your CDP should be chosen carefully.
When it comes time to choose a CDP for your organization, you want to make sure that you are selecting one that is a good fit for your company. There are various options on the market, and they aren't all created equally.
Your first step must be to brainstorm what you intend to use the CDP for and what you hope to get out of it. To do this, make sure you involve all relevant stakeholders, as the CDP will be utilized throughout the organization.
Together, you can define a series of use cases that can then be compared to potential CDPs' features. Some of the most common use cases include designing more targeted advertising campaigns, combining online and offline data, understanding the customer journey more thoroughly, and offering a more personalized online experience for visitors.
Next, determine the tools that you have that interact with your customers and that you want incorporated into the CDP. These may include website tools, analytics tools, CRM systems, payment processors, advertising tools, customer success and live chat tools, business intelligence tools, email platforms, and data warehouses.
From there, you can start to compare vendors to ensure that they match your use cases, as well as your tool integrations. To continue narrowing down your search, look for ones that have plenty of customer reviews and an excellent customer service record.
Are you considering implementing a customer data platform in your organization this year? What do you think are the most significant benefits it would bring your company? Which aspects are you still hesitant about? Let us know your thoughts and any additional insights or questions you have in the comments below!