The customer data platform (CDP) is one of the fastest-growing marketing technologies and is the most significant evolution to your CRM and marketing stack. To understand why this solution category is expanding rapidly, and why Salesforce is backing it strongly, you must first grasp a few marketing concepts.
What is a CDP?
Simply put, a CDP solution is a system that aggregates all the data a consumer uses, into a single customer view. It creates a unified customer profile from all the customer behavioral data, third party data, details in the marketing automation system, customer loyalty information, customer service information, and various other types of data points collected about individuals throughout the organization and across various channels. Its initial task is to centralize all the consumer data by linking databases that don't normally exchange client data. For example, across marketing clouds, service software, and ecommerce engines.
The CDP connects with various platforms and data sources to tap into all these facts, figures, and records. Doing so provides granular customer resolution and a holistic picture of each consumer.
Why do I need CDP?
What are the benefits of a CDP? What is the point of bringing all your data about a consumer and the customers' experience into one place?
First of all, with a CDP at its core, a company can find more actionable insights about its customers. This is important to help deliver better business results by providing better online and offline experiences. Think for a moment about how Spotify recommends songs that we like, or that are very close to the music to which we typically listen. Netflix recommends movies and shows that we gravitate toward. Amazon famously forecasts our next purchase and recommends items that we may like—which are often spot-on. These examples of excellent customer experiences are possible because those firms have a 360-degree view of the customer.
Today's customers want to be known. They want companies they deal with to create a persistent unified and personalized perspective of their wants, needs, and historical preferences.
Customers expect companies to know everything about them, customize their experience, and use this unified knowledge to deliver what they want, fast. Given that companies like Spotify, Netflix, and Amazon are already providing this level of intimate customer knowledge, it is no longer a marketing advantage to have this capability. Rather, these are the table stakes, and baseline expectations of your consumers.
Deeper Expectations
In terms of marketing, clients expect their online engagements to extend to mobile apps and even in-store visits. At issue is that most organizations use different datasets and databases, even though the consumer is the same.
Customers demand consistent “in-the-moment” experiences across channels. Remember our references to omnichannel experiences? Here too, customers expect your organization to have access to all their online transactions, in-store, and vice versa. Most customer journeys comprise three or more channels (email, online, physical, social, and mobile), and customers tend to switch between them fast. Unfortunately, most companies do not have the real-time data connectivity to keep up. And between systems, there still isn't the database that is accessible from one platform to the next.
All told, most companies today provide consumers with a highly fragmented experience. Even though they have provided their data to a brand, within the organization that data is not necessarily accessible to other systems, to allow for a unified customer experience.
This is exactly the pain point that a CDP answers. It brings together all the disparate data into a singular point of reference, and single source of truth.
Internal Sharing
Before sharing data with organizations, CDPs must reconcile the identities of known consumers (such as email and cell numbers, anonymous cookies, and mobile device IDs). This allows a CDP to link an email campaign to a website visit from that same customer. It is a form of cross-device identity.
Doing so ensures an organization can deliver personalized experiences and manage customer expectations better. Beyond that, it ensures the company makes the customer feel like they are known by the vendor, rather than an unknown number. More important yet, the CDP must make this customer profile information available in real-time. These systems connect to the communication systems (email, text messaging, etc), demand-side platforms, and content management systems.
In short, CDPs are involved in data gathering, unification, activation, and insights.
Beyond Personalization
Aside from the real-time, impactful personalization that you can run with the customer's centralized information, this is also a treasure trove of insight potential. Having all this rich data centralized makes customer intelligence and analytics a powerful tool to drive customer engagement, interest, and ultimately additional sales.
For example, data like email click-throughs and open rates are generally quite distinct from website analytics and paid ad campaign data. But, connecting this data—and more importantly relating it to the same customer—can be tremendously powerful information. However, this is normally an intensely difficult challenge.
Imagine that a physical (bricks & mortar) store made a customer's marketing interactions (email and digital ads) available to a call center service person. Include that customer's ecommerce data (purchase history and preferences) and website interaction data (items viewed several times). Such rich information about a single client would give that call agent a huge advantage when trying to upsell a client on an additional product that they might already have been considering.
The call center employee might point out that customers who bought this blouse online, opened emails for a certain set of matching pants. Then, customers who spent between $320 and $1500 annually, generally also were inclined to buy additional designer boots and a matching handbag, according to the analytics. With information like that, your ordinary call center agent could easily become a star salesperson.
Customer Data Journey
Like the tangible example of the call center agent, a CDP can also help with the customer journey. CDP analysis can reveal patterns and behaviors that show where a consumer is in their purchasing phase at this moment. It can then determine which subsequent activities have aided similar clients in moving closer to a purchase decision at that point in their purchasing cycle. This analysis can be used to create guidelines for personalized, automated follow-up.
Again, a clear example of using the centralized and full customer data view, to translate data into actionable information. Better yet, it is actionable information that can help drive additional sales and business revenue.
Ultimately, what is a CDP?
A customer data platform (CDP) is widely regarded as the next step in marketing technology. It is the solution to the problem of disconnected customer data systems. A CDP brings together all the disparate data sources into a centralized location to provide a 360-degree view of each customer.
This opens the door to providing fully personalized, real-time customer experiences for every client touchpoint, regardless of source. It also provides a rich opportunity to glean insights from the customer data, allowing the organization to take actions that can drive additional sales, revenue, and ultimately margins. What organization wouldn't want more of that?
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