A Customer Data Platform, also referred to as a CDP, is the latest up-and-coming software for data-driven marketing. Raab Associates notes that “CDPs can solve marketers’ biggest data problem: building a unified customer view.” This has been one of the bigger problem facing marketers in recent years, as a 2016 LiveRamp study shows. The study found that 90% of marketers believe building an omnichannel view of consumers is important, but only 17% can actually make it happen. Fixing this disparity is exactly what CDP vendors set out to solve.
So what exactly is a Customer Data Platform, then? Raab Associates’ Principal David Raab defined it in an interview with Ensighten as “a marketer-controlled system that uses persistent, cross-channel customer data to support external marketing execution.” In simpler terms, a CDP collects and analyzes customer data from multiple channels in order to provide companies with greater customer insights. By solving one of marketing’s biggest issues, CDPs were added to Gartner’s 2016 Hype Cycle for Digital Marketing and Advertising. This software has so far proven to be an effective tool in optimizing marketing automation, as well as bettering the understanding of the customer journey. Let’s take a look at what exactly makes a CDP a CDP, and why more and more marketers are adopting them.
Only Marketers Required
In the same Ensighten interview, Raab states that the Customer Data Platform is “one of the few fundamental changes in marketing technology in the past decade, because it shifts control of the customer database from IT to marketers.” Although not a specific feature, this aspect speaks to the usability of CDPs. CDP vendors take care in developing their software so that marketers can create and manage their customer databases the way they want and whenever they want, without having to defer to the IT department. This allows marketers to be more efficient and more self-sufficient with their use of data in their digital marketing efforts.
Single, Unified Database
One of the biggest advantages of a CDP is the use of a single, unified database. This database gathers information from all of a company’s channels and stores them together, rather than keeping them separate. What makes the biggest difference, however, is that a CDP database collects all of this information and identifies customers on multiple devices and channels. Other types of marketing technology don’t integrate all of the data they collect, leading to a customer being identified separately based on the channels and devices they use. By integrating all of the collected data, CDPs connect the dots and find that these visits were all from the same customer. For example, a clothing company’s CDP can identify Bill Self as visiting a page on their eCommerce site on his iPad, liking a Facebook post on his work computer, retweeting a tweet from his phone and commenting on a blog on his home desktop.
Due in part to the unified database, Customer Data Platforms can identify customers by name, email and other information, rather than by anonymous cookies and IP addresses. Although being able to collect his type of personal information is slightly reminiscent of Big Brother, it’s a gold mine for marketers who want to connect with customers and potential customers on a more personal level. ZDNet points out that some CDPs have additional functionality that work with anonymous audiences as well, in case a marketer wants to build an advertising audience around cookies and IP addresses. By combining these two types of functionality, CDPs offer a more robust product than what was previously on the market.
Understand Customers Better
Last but not least, CDPs help marketers achieve the Holy Grail of data-driven marketing: the coveted Single Customer View. Single Customer Views provide marketers with detailed insights into their customers, and includes tracking interactions across channels, identifying behavior patterns and building correlations to influence multichannel strategies, according to CMSWire’s Noreen Seebacher. With this data in hand, it’s possible to pinpoint the different stages of the customer journey, in turn allowing marketers to implement more effective campaigns and multichannel strategies. For example, a marketer could use this data to realize that their social media accounts create a great customer experience that their website lacks. After refining the website, they probably will see more of their leads becoming conversions.
Although you may not have heard much about Customer Data Platforms before, we’re sure in the coming years you’ll be hearing a lot more about this type of software. By leveraging the advanced customer insights from CDPs, marketers can enhance their marketing automation and customer experience in order to convert more leads. And that’s all that marketers really need, isn’t it?