What is CDP?
As a customer uses multiple devices, today’s customer experience is more fragmented than ever. A Customer Data Platform (CDP) helps to coordinate all those experiences. It develops a centralized customer database which is accessible to other systems as well. Thus, the whole company has access to the customer data and not only specific departments.
Two different types of Customer Data Platforms exist. A System of Engagement contains platforms which involve the easy accessibility of the collected data. Systems of Organization encompasses the aspect of marketing exploration and segment creation.
How does a CDP work?
A CDP, which centralizes all the data a company has, consists of four steps:
1. Collecting Data
A CDP collects all the data from various customer relationship management platforms and databases to identify every individual consumer. The whole customer’s engagement history gets identified and unified.
2. Unifying Data
In this step, the identified customer data gets combined with anonymous customer data, which was shared before they became a company’s customer. Consequently, the complete customer’s journey gets determined to create the customer’s profile.
3. Activating Data
Now that the customer’s profile is established, the data is activated. Data can be used for personalized activation, for instance emails. The customer profiles are connected to all platforms the company uses for customer engagement.
4. Pulling Insight from Data
The customer journeys can be tracked and this can be used to create segments and lookalike audiences based on the customer insights gained from the customer profiles.
What can you do with a CDP?
With a Customer Data Platform, primary data from the audience can be captured from everywhere through pixels and other tracking tools. A customer identity is determined based on multiple devices and its relationship between those. Furthermore, this primary data is collected and stored over time, thus, marketers can always review data which could have been unnecessary in the past but relevant today. This single view of the customer is always centralized and can move with the business, wherever it needs to be since the data is unified and democratized across devices and channels. Hence, the value of this collected data extends throughout departments. Thereupon, it avoids the establishment of data silos or solves the problem of those. As the customer information is directly gathered from the audience, it is reliable and accurate as well. Consequently, a CDP facilitates the process of getting to know the audience well and makes the customer experience and marketing more effective due to exact personalization and adaption to the customer needs.
When do you use a Customer Data Platform?
Using a Customer Data Platform is recommended if the existing data system an organization has, is able to collect data from different sources, however, the system cannot centralize the data. Hence, silos appear in an organization. CDP centralizes the data and avoids or dissolves the silos. Besides, it leads to a dependence on the tech team every time marketers need a single view of the customer.
Sales, demand generation and other marketing teams benefit the most of a Customer Data Platform. Nevertheless, the more technical departments like marketing operations, data engineering, data operations, etc. are the teams generating the idea of obtaining it.