A new marketing technology called customer data platform (CDP) is gaining a lot of prominence in the marketing world. With over 5000 MarTech companies, CDP seems to have become a new catch-phrase that many of the systems are trying to orient themselves towards. This blog explores the concept of CDP and its gaining prominence.
What is a Customer Data Platform?
A customer data platform is a marketing system that aims to unify customer data by creating a centralized customer database that contains a 360-degree view of the customer from a marketing perspective. Some marketing experts call it a "concept" while a greater majority refer to it as a system. The CDP industry is projected to reach $1 billion by end of 2017.
A CDP usually involves pulling off data from multiple streams, analyzing the data, cleaning and then compiling it to create a single customer view (or more like a 360-degree view). Since the data is arranged in a structured format (and stored in a master database), it is now easily accessible to similar systems.
Traditionally, this capability was within the bounds of business intelligence systems, but CDP systems are within marketing control and enable the marketing team to provide hyper-personalized messages to prospects and customers, driving business growth.
What do CDPs have in common?
According to the CDP Institute, in order to be considered a true CDP, it must include these five essential capabilities:
- ingest data from any source
- capture full detail of ingested data
- store ingested data indefinitely (subject to privacy constraints)
- create unified profiles of identified individuals
- share data with any system that needs it
If a CDP does not include any of these capabilities, it may not provide the solution organizations are looking for to achieve a persistent, unified view of the customer. It is also important to measure a CDP against these features as well:
- A marketer-managed system controlled by the marketing department alone. The marketing team typically decides what type of information is managed within this system to get the intelligence to run targeted marketing campaigns.
- A centralized customer repository that has the ability to gather and stitch together the customer information such as their personal and demographic information, online behavioral data, engagement data, transaction and point-of-sale data, as well as mobile and IoT device data. This data is used to create a comprehensive profile of the customers/prospects/visitors.
- Ability to create segments based on various attributes of the individual profiles.
- Ability to integrate the segments with "actioning" systems such as email marketing systems, advertising systems, social media platforms, etc.
- Ability to act upon real-time data. For instance, the ability to send emails, mobile app notifications, texts, etc., based on a particular behavior on the web, mobile app or in store.
- Ability to integrate both online and offline data such as point-of-sale data or IoT data into a single data platform.
What Can a CDP do for Your Business?
CDPs can provide multiple benefits. The key ones include:
- 360-Degree customer view. With all the data pulled together, CDPs are able to provide a complete visualization about a visitor. The visitor could be an anonymous user or a loyal customer.
- Better segmentation & targeting. Having various attributes identified about a profile enables companies to segment and target the audience better. For example, segmentation could be performed based on conditions such as a person not completing a checkout transaction after starting it. An email could be sent to the individual after a certain time to remind the person to finish the transaction.
- Ad optimization. By integrating CDPs with programmatic advertising, advertising can be more targeted. This allows for focused re-targeting instead of broad re-targeting. For instance, a person spending a certain amount of time on a particular page and clicking on a link within an email gets a different email vs. someone who hasn't clicked on the email link. This type of rules-based advertising significantly increases the conversion ratio, typically more than 15-20%.
- Web personalization. With real-time data assessment, the marketing teams can personalize the web experiences of the website visitors. The personalization can be streamlined based on behavior and engagement data across various systems.
- A/B testing & improved design. Based on the behavior trends captured within the CDP, websites layout testing can be performed. This enables marketing teams to hone in on the exact landing page messaging and design.
- Targeted social campaigns. As CDPs integrate with social advertising platforms such as Twitter, Facebook, and Google Ads, it enables marketers to re-target via social platforms and to reach look-alike audiences based on the attributes made available within the CDP systems.
- Data mining & reporting. Since CDPs capture a lot of data, they provide a treasure of information for data mining and reporting. This can be used for various business and product strategy decisions.
Need help with customer data platform strategy, reach out to us at firstname.lastname@example.org.