What’s a Customer Data Platform? | The ultimate guide to CDPs

Everything You Wanted to Know About Customer Data Platforms

The term CDP is increasingly used by marketers, both data-driven marketers and more traditional ones. Not very surprisingly as the platform helps the marketing department to solve one of their greatest challenges: to gather scattered customer data into one place and then to be able to act on this data.

I understand that it might be overwhelming finding all the information that you need to know on the web, hence I created this ultimate CDP guide where I consolidate all information around CDPs in one place.

Let me know if I missed anything that is crucial; enjoy!

What is a Customer Data Platform?

A Customer Data Platform (CDP) is a database which consolidates useful customer data from several channels and data sources. It provides organizations with streamlined access to deep and specific insights about their customers. A CDP contains first-party data that you can then enrich with second and third-party data to create a holistic view of your customers.

It’s a central location for all customer data, including personal identifiers, website visits, purchase orders, email responses, social media comments, audio recordings, customer service interaction, mobile app touch-points and any other data related to the customer. The CDP pulls this data from different sources and then cleans and combines it to create a single and unified customer view.

Once you’ve collected your data to one place (the CDP), so that you can analyze it and get insights, you’re also able to connect it to other systems like a marketing automation system, CRM etc. That way, you’re able to directly act on the data and insights you get. Cool, right? Below is a visualization of CDP.

What are the key benefits of having a CDP?

1. Get a 360 ° customer view: A CDP is designed to combine data from different sources and create a uniform customer view. This way you as a marketer can better understand your target group and their behavior.

2. Get transparency in your marketing efforts: Many times it is difficult to know the actual costs and returns of marketing efforts. With a CDP you can clearly see what you are spending and how each channel and campaign is performing. This way, you get transparency in your digital marketing efforts.

3. Gain insights that help you make better decisions: By gathering, analyzing and acting on your customer data you can make better and reality-based decisions. Your company can respond to changes faster, both in regards to the market and with customers.

4. Focus on business benefits: Today, many marketers and analysts spend a lot of time collecting and understanding data. By automating this and getting it delivered in real-time, you have time left over to create profitability and a better customer experience.

5. Create a better customer experience: By having a 360° customer view you can create a unified customer experience. Today, we use more channels and devices than before, and we expect the experience to be the same. This becomes possible, thanks to a CDP.

What kind of CDP solutions are there on the market?

The CDP institute groups CDP vendors into four categories based on the functions provided by their systems. There are great variations among vendors within each category. Categories are:

Data CDP: These systems gather customer data from source systems, link data to customer identities,
and store the results in a database available to external systems. This is the minimum set of functions
required to meet the definition of a CDP.

Analytics CDP: These systems provide data assembly plus analytical applications. The applications
always include customer segmentation and sometimes extend to machine learning, predictive
modeling, revenue attribution, and journey mapping. These systems often automate the distribution
of data to other systems. 

Campaigns CDP: These systems provide data assembly, analytics, and customer treatments. What
distinguishes them from segmentation is they can specify different treatments for different individuals within a segment. Treatments may be personalized messages, outbound marketing campaigns, real time interactions, or product or content recommendations. They often include orchestrating customer treatments across channels.

Delivery CDP: These systems provide data assembly, analytics, customer treatments, and message delivery. Delivery may be through email, Web site, mobile apps, CRM, advertising, or several of these.

What is the criteria for a vendor to be a “real” CDP?

To help buyers identify real CDP vendors, the CDP Institute, a vendor-neutral organization, provides a RealCDP program. This program is designed to differentiate the real CDP vendors from the ones with incomplete systems. 

Common examples of incomplete solutions include:

• Systems that build a unified database but don’t allow other systems to read it

• Systems that create unified profiles in real time, but don’t store data outside of the original sources, 

• Systems that summarize data before storing it. Each shortfall limits how the data can be used, often blocking critical applications such as identity resolution, personalization, or experience orchestration.

 

The real CDP checklist

To make sure you identify a real CDP, use the checklist below to make sure that your (soon to be) vendor is fully compliant with the requirements. 

#1 Ingest data from any source

The CDP solution should be able to digest any data such as event-level behavioral data (e.g. websites, apps, mobile browsers), demographic & firmographic data, transactional data, offline & modeled data (e.g. RFM models, propensity scores, next best action).

#2 Capture full detail of ingested data

The CDP solution should be able to  store any input data without losing details. This means all details associated with purchase transactions, promotion history, Web browsing logs, changes to personal data, etc.  Inputs might be physically reformatted when they’re loaded into the CDP but can be reconstructed if needed.

#3 Store ingested data indefinitely (subject to privacy constraints)

It should be possible for the CDP solution to retain all ingested data for as long as users specify (subject to regulatory constraints). For instance, specific metadata fields should exist that indicate the time that the data has been ingested in your system so that it is possible to delete data after a certain period of time if the customer asks for it. 

#4 Create unified profiles of identified individuals

It should be able to connect many different identifiers from multiple platforms and devices in real-time to enable people-based targeting, personalization and measurement. Through deterministic and probabilistic matching, it should be able to create universal and persistent consumer profiles by solving the identity of customers and visitors across different states (known & unknown).

#5 Share data with any system that needs it

You want to be flexible when it comes to which external channels that can consume your customer data. Hence the CDP should be able to integrate out-of-the-box with any software system through connectors and ready-made APIs, allowing access to data for deeper analytics while boosting customer engagements.

The CDP Institute authorizes qualified vendors (that comply with point 1-5 above) to display a ‘RealCDP badge’. If you can’t find it on the website, then make sure to ask if they have it.

What to have in place before adopting a CDP

Below is a series of crucial steps that most of the companies omit (or avoid intentionally) since it might be time consuming, if not done right. However, having a plan in place and well-defined requirements is the key for the success of any project, including the adoption of a Customer Data Platform.

Ready? Let’s get started!

#1 Start by measuring the effect of doing nothing. 

In other words, what would happen if you didn’t advertise at all at a specific channel or if you didn’t set a data-driven prospect prioritization process? Thus, measuring the effect of doing nothing allows you to create a baseline to measure against & predict the return-on-investment of any use case that you will think of. 

Although this might sound trivial, most of the companies omit this step since they think that it is not necessary or it takes too much of their time.

#2 Define control groups

Once you have a full overview of where you are standing, defining control groups is the next step. A control group is a vital part of your testing process since it helps validate testing results and proving the return-on-investment of a specific use case. Put simply,  a control group is a test cell of customers or prospects who receive no special treatment. In that way, you will be able to understand if you really moved the needle in the right direction or it was just a coincidence, that would have happened anyway.

#3 Define use cases

It is now time to define your use cases.  A use case let’s you show people what to expect and the outcomes that you will achieve. A use case is a very powerful and reusable piece of content, since people tend to digest the information and see your point much easier than reading paragraphs of text. 

#4 Choose your KPIs

Last but not least, choosing your KPIs (reflecting strategic goals) and metrics (reflecting tactical goals) will ensure that you get your company’s credibility and show how your specific use case has contributed to the overall growth. Without measuring the right KPIs/metrics against specific goals, you cannot build a rapport with the decision makers in your organization since different parts of the organization care about different issues.

Following the recommendations above will help you feel more confident about your decision on adopting a CDP since you can articulate (internally & externally) why you do this, what’s the impact, the expected return-on-investment and how are you going to monitor the success.

Why tracking the right KPIs matters

Marketing teams struggle to find the right KPIs (reflecting strategic goals) and metrics (reflecting tactical goals) that will get them credibility and show how marketing contributes to the overall growth. 

Without measuring the right KPIs/metrics against specific goals, you cannot build rapport with the decision makers in your organization since different parts of the organization care about different issues. If you want to transform your company, then your marketing team should include data evangelists who preach customer-centric decisions and data-savvy people who can perform in-depth analysis. Basically being able to link almost any marketing initiative to a revenue stream.

So, where do you start?

Every KPI should be set based on goals. Hence your KPIs should fulfill the SMART criteria. SMART stands for Specific, Measurable, Attainable, Relevant, Time-bound. In other words:

• Is it Specific enough?

• Can you actually Measure it?

• Is it realistically Attainable?

• How Relevant is the goal to your organization?

• What is the Time-frame for achieving this goal?

Those KPIs should be evaluated on a regular basis, not monthly but at least quarterly so that you make sure that they are still valid and in accordance to your company’s direction.

Once you have defined the KPIs, you are ready to decide on what kind of data you need to collect. In that way, you avoid one of the most common mistakes that companies make, gathering all the possible data available ‘just in case’. You should keep in mind that KPIs are like milestones towards the goals you are trying to achieve. By identifying and monitoring the key ones, you’ll be clear on your progress towards marketing, sales and customer experience goals. 

Example 1: Ecommerce (B2C): If you’re an ecommerce business, below are examples of KPIs that could be relevant to track:

• Sales

• Average order size

• Number of transactions

• Conversion rate

• Shopping cart abandonment rate

• New customer orders vs. returning customer orders

• Churn rate

• Site traffic

• Time on site

• Email open rate

• Net promoter score (NPS)

• Customer service phone and chat count

Example 2: Sports: If your business is, for example, a Golf club then the below KPIs could be relevant to track:

• Revenue per available tee time

• Average length of round

• Repeat business (reveals the customer satisfaction)

• Course utilization

• Average merchandise sale per customer

• Average food and beverage sales per customer

• Percentage of golfers who purchase lessons

Example 3: SaaS company (B2B): If you provide a subscription based product, like Data Talks does, then the following KPIs could be relevant to track:

• Customer Acquisition Cost (CAC)

• Churn Rate %

• Customer Lifetime Value (CLTV)

• Ratio of CLTV / CAC

• Time to Payback CAC

• Marketing Originated Revenue %

Once you’ve identified what KPIs that are relevant for your business, you’re ready to adopt a CDP because you know what data to collect.

What kind of data can you store in a CDP?

A CDP is built to handle any type and category of data. It can connect all sources of customer data – internal or external, structured or unstructured, batched or streaming. It can store first-party data that you can then enrich with second and third-party data to create a holistic view of your customers.

• Zero-party data: Any data that a customer intentionally and proactively shares with a brand is called ‘Zero-party data’.

• First-party data: This is the best type of data because first party data is the information you yourself have collected about your audience.

• Second-party data: This is the next best thing. Second-party data is someone else’s data (usually a trusted partner who’s willing and has the consent to share their customer data with you).

• Third-party data: This helps to complement the current data. Third-party data is usually provided by companies, also known as data aggregators, that sell user data. You should be very careful when using this type of data. Make sure that you can trust the source before you commit to a long-term contract.

To give you an idea of what’s possible with a CDP, below are a few examples of what kind of data you can collect:

• Click-stream data & browsing history

• Social media (likes, comments, shares)

• Campaign data (sent newsletter/opens/clicks, cost-per-click)

• Customer data (name, email address, telephone, address, job title etc)

• Transaction data (orders, invoices, payments)

• Data about product usage

• Customer support data (live chats, number of support tickets, time to resolve the issue)

• Offline data (shop visits, shop purchases)

• Third-party (enriched) data (demographic data, Net Promoter Score, surveys)

Old vs New way of connecting the customer data

Old way

Given a set of marketing tools (Marketing stack), the most common approach so far was connecting each and every software with each other. Thus, you would have something like the following:

• Website & Marketing Automation software

• Marketing automation software & CRM

• CRM & ERP system

• ERP & central database

• Customer support & central database

• Central database & Marketing Automation software

• etc.

Those connections were in the best case scenario bidirectional. So, on average, you would need to monitor and maintain ~6 bidirectional integrations and make sure that the data flows seamlessly between all systems. In addition, you would use 2-3 data visualization tools (without counting excel/google spreadsheets) since every department would use a different tool to get a report on their performance.

What is the outcome?

Data driven organization! No, just kidding. Confusion for the C-levels, frustration for the ones responsible for reporting and the IT department in the middle trying to maintain all this infrastructure. In other words, the lack of a single source of truth would make your organization unhappy.

Thus, it is time to expand on how to best store and connect your data, so you set yourself up for success!

New way

To store data you need a data storage system. Many companies today use a Data Warehouse to store data, while more and more are starting to use a Data Lake. Many companies need both. (If you don’t know what a Data Warehouse or a Data Lake is, no worries, just keep on reading to find out). 

A data warehouse and a data lake both serve the purpose of storing data, but in very different ways.

Data warehouse: A Data Warehouse is a system that pulls together data from different sources for reporting and analysis purposes. The reports are often used to make business decisions. A Data Warehouse stores processed and refined data according to the business logic. This means that you need to prepare the data by cleaning, transforming and aggregating it before using it for analytical purposes. 

Data lake: A Data Lake is a system that stores data in its raw format. Basically, you can store your data as-is, without having to first structure it. Data stored in the Data Lake can be in structured, semi-structured or unstructured format. You can import this data to your Data Warehouse for adding more business value to it, or you can use that data in dashboards and visualizations directly from the Data Lake. Beware that the direct visualization of data from the Data Lake can be risky, as data is not cleaned and it might contain corrupt or duplicate records for example, that might affect the final figures quite a lot. By using a Data Lake you are building a strong data foundation for better decisions and a single source of truth.

A Data Warehouse focuses mainly on reporting, and the data modelling and format is very strict, which limits the data you can store. A Data Lake on the other hand, is more flexible and can handle more sources of data with any kind of format. It will also give you patterns about your customers, instead of pure facts, which will help you to create an engaging and relevant customer experience.

What kind of data can you store with a data lake?

• Structured data

• Relational data (rows and columns)

• Semi-structured data (logs, XML, JSON and CSV)

• Unstructured data (emails, PDFs and documents)

• Binary data (audio, images and video)

If you’re looking to act on your data – a Data Lake is what you need. It’s the foundation for any data-driven company. And as you might have guessed, it is included and an essential part of a CDP!

All in all, you should connect every software tool (MA tool, CRM, ERP, POS etc.) with the Data Lake first and then perform any data cleaning and transformation. As a next step, you pass the nice & neat data to the Data Warehouse (if you have one) & visualize the results. One single place where every department can access and evaluate their KPIs. Sounds pretty awesome, right?

Then you can decide if you want to act on the insights (you should!) by passing this information to the marketing automation tool so that you can send sms, emails, app push notifications  or anything else that you wish for.

How can you act on the data gathered in a CDP?

Let’s talk about how to act on your data insights gathered in a CDP. As mentioned before, a CDP helps you to create a 360° customer view and then it makes this data available to other systems. Marketing automation is one of these systems and it’s the tool you need to create a seamless, omni-channel experience for your customers.

First of all, what is a marketing automation system?

Marketing automation is the use of software to streamline, automate, and measure marketing and sales tasks. It removes a chunk of manual and repetitive processes and makes customer acquisition, engagement and retention much more efficient and personal.

This means that you can nurture prospects, based on the 360° customer view in your CDP, with highly personalized, useful content and then convert these prospects into happy and satisfied customers – without having to employ new people. When done correctly, it can generate significant new revenue and provide a great return on investment.

Just to clarify even more…

• Marketing automation is not email marketing. (But email marketing is a component of marketing automation).

• Marketing automation is not another way of spamming. Oh gosh, no! When done correctly, it’s the exact opposite of cold and impersonal communication. Instead it makes it easier to send personalized and targeted communication. You can collect data on prospects interests and behavior and tailor your messaging so that people receive a comprehensive and engaging customer experience.

• Marketing automation is first and foremost driven by value. It’s a tool to help you stop talking about yourself and how amazing you are and focus your attention on your prospects and customers. It’s the tool you can use to create a better customer experience and deliver the right message at the right time.

What differentiates a CDP from a CRM?

A Customer Data Platform (CDP) and a Customer Relationship Management (CRM) software share some similarities. However, their primary purpose and function have many differences.

A CRM stores data of customers who had some interaction with your business. It could be data about your business prospects and customers, their product needs and purchasing history. Hence a CRM is critical for Sales and customer-facing roles to manage customer data.

On the other hand, a CDP is a database which consolidates useful customer data including personal identifiers, website visits, purchase orders, email responses, social media comments, audio recordings, customer service interaction, mobile app touch-points and any other data related to the customer. The CDP pulls this data from different sources and then cleans and combines it to create a single and unified customer view. Thus CDPs are essential if you plan to execute scalable, personalized and omnichannel campaigns.

It’s not about choosing between a CDP and a CRM. Rather, Marketers should know the difference between CRM and CDP in order to take the necessary action to the respective software for each use case.

What differentiates a CDP from a DMP?

A DMP is used when you want to build marketing campaigns for audiences that are unfamiliar with you. DMPs are best for this because of their use of third-party data. They can give you access to audiences that you don’t know. You can then use that new data to build a targeted marketing campaign.

CDPs are built for processing zero, first and second party data. If you plan to create highly personalized marketing campaigns based on your own data, use a CDP. Your CDP can gather website data and send it to any number of different tools, depending on your needs.

There is a high chance that you need both platforms in your marketing arsenal. Your CDP can handle the segmentation and creation of look-alike audiences, while you might use a DMP to target these audiences in your preferred advertising platform.

How long does it take to implement a CDP?

This is a reasonable concern. You read all this information online about the CDPs, you speak with a few vendors and you understand the complexity. On average, for an enterprise, it takes 6 weeks to build one integration. Given that you have 5-6 data sources, one Marketing Automation software and a visualization tool to connect, that is about… well, no need to do the math. It seems like a never-ending project.

And that would be the reality in case you choose to build instead of buying a CDP solution.

So it is not hard to assume that the technical implementation will take years which you cannot afford; you need to show the ROI internally in a few months after signing the contract.

Well, I have some good news for you!

Basically the integrations and the various connections are pre-built normally from the vendor which means that you will save a lot of time and money. Not to mention that you will not have to maintain these integrations once it is live.

Given that you select the right partner and that your stakeholders are committed to the project, the technical implementation does not last more than one month. Thus in a couple of months you can have your first use cases up and running, demonstrating the return-on-investment.

How do you know when you should buy a CDP over building an in-house solution?

To build or not to build.

This is probably the big question that comes to mind when IT and Marketing join forces to evaluate new technology that would like to add in their software arsenal. Choosing how to proceed with a Customer Data Platform is not an exception.

You want to deliver a world-class customer experience, based on your data. After thorough research, you decided that a Customer Data Platform (CDP) will enable you to reach your goal (congrats!) How will you go about it?

You’ve got two choices: either you build your own solution in-house, with all the management and upkeep that this entails, or you buy a solution from a vendor. It can be a difficult decision, with a number of benefits and drawbacks to either approach.

To help you make the right decision, we came up with the following framework; we advise you to treat it as a rule of thumb but we are pretty sure that it will yield the right result. Let me know otherwise.

How can you calculate the CDP ROI?

Let’s start by making this clear: The CDP itself doesn’t generate ROI.  A CDP is the technical backbone that helps you build a solid foundation to collect, analyze and act on your customer data. You tailor-made use cases are the ones that will bring you the ROI, that is why we believe that it is absolutely crucial to have these defined (combined with the KPIs to measure success) before you start evaluating vendors.

So, how should you think around it?

Step 1: Get some statistics from your existing MarTech stack

Go to you Google Analytics or CRM software and find out how many customers you have, what is the average revenue from each customer and what is their buying frequency. Depending on the setup, you could also find statistics around your emails (deliverability/open rate/click rate etc), how many users abandoned their cart (if you have an ecommerce) and what is the conversion rate (this definition is unique for each business). Now based on these, you can find how many customers you are serving today and what is the potential (total addressable market) both in terms of volume and revenue.

Step 2: List the use cases defined and the corresponding activities

We would suggest you to have at least 2 use cases to begin with. Keeping in mind our mantra ‘Collect, Analyze, Act’, you should be able to answer what will happen in each phase. What kind of data is available and what is needed to be collected for these use cases, what do you expect to get out of the data analysis and how are you going to respond to the outcome (send a personalized email/SMS, show a website pop up, show mobile push notification etc.).

Just to name a few examples of use cases: connecting your online & offline data, predicting churn, stop advertising to existing users, cross/up selling to existing users.

Pro tip #1: It is very beneficial to map the whole customer journey for each use case so that you understand the touchpoints and communicate internally what you want to achieve.

Pro tip #2: Don’t forget to set KPIs and Metrics to measure success.

Step 3: Tie each use case with an expected ROI

Now that both use cases & KPIs are defined, you can set a financial value to each activity. Given your current situation (step 1) and your assumptions (step 2), you should now be able to articulate a revenue impact for reach use case. We would suggest you to create 3 different scenarios: one optimistic, one realistic and one pessimistic so that you are well prepared for all questions. Don’t forget to include here the time/money savings from building and maintaining custom integrations, logging into several systems, working with manual processes (i.e uploading excel files), potential GDPR issues.

If you need help to build your case, don’t hesitate to reach out.

5 questions to ask before buying a CDP

 Can the CDP ingest data from a variety of sources? 

Make sure that the CDP has the ability to consume all the customer data you want to collect. This can be data from a CRM, ERP system, point of sales system (POS), app data, a data lake or data warehouse, a marketing automation system, or a loyalty and customer support program.

 Does the CDP allow marketers to easily access and act on the data without the help of IT?

Make sure the CDP is marketer friendly. The marketing team should be able to handle the day-to-day segmentation, targeting and campaign management. Also, make sure to check the dashboards and that the graphics are easy to understand and interpret.  

 Can you access raw data with the CDP? 

The CDP must support raw data, as this is the key to uncover patterns in your customer journeys. Make sure you’re able to do ad hoc queries without hassle and to add data and fields easily.  

 Does the vendor have proven experience and case studies? 

When comparing vendors, make sure to ask for best practice and case studies. You want to partner with someone who, not only beholds the technical experience, but also the business aspect of implementing a CDP. They will be able to help you thrive. 

Is your CDP secure? 

With the introduction of global and domestic legislation such as the GDPR (The European Union’s General Data Protection Regulation), marketers need to make sure they handle data correctly. Ask your vendor if they have security features and guides to make sure you comply with security and privacy laws and directives. 

What are some common CDP misconceptions?

 CDP is a Marketer-managed and Marketer-only system

A CDP is defined as a Marketer-managed system designed to collect customer data from all sources, normalize it and build unique, unified profiles of each individual customer. That should not be interpreted as that only Marketers should manage and work with it.

Sure, Marketers should drive the implementation since they are the ones who have defined the use cases and will be responsible for proving the ROI. However, the IT should be involved as well, at least during the partner selection and the initial implementation of the solution. That will ensure that major technical hiccups will be avoided or spotted early in the process. In addition, keep in mind that the CDP will be ideally connected to the existing Data Warehouse (or Data Lake) hence IT involvement is needed for a smooth project.

Once it is implemented, your Data Scientists, Database Developers or Analysts might want access to either fetch some data or implement a machine learning algorithm, supporting your Marketing activities. Last but not least, the Finance department might want to double check how much you have spent for a specific campaign in a specific channel since the invoice from the advertising vendor seems too high this month.

 A CDP’s main capability is Identity Resolution

It is correct that your CDP should be able to connect many different identifiers from multiple platforms and devices in real-time to enable people-based targeting, personalization and measurement.

Through deterministic and probabilistic matching, it should be able to create universal and persistent consumer profiles by solving the identity of customers and visitors across different states (known & unknown)

However, keep in mind that the Customer Profile Management described above is just one of the 4 core CDP capabilities, explained in more detail here.

 CDPs are known for handling only personally identifiable first-party data

A CDP can handle zero, first, second and third party data! Sky is the limit on how you can leverage your CDP. However, most of the companies use a CDP to handle zero, first and second party data while third party data is being processed by their DMP.

 Implementing a CDP involves replacement of our Marketing Automation or visualization software

That is a tricky one and depends on the vendor that you will choose to partner with. It might be the case that the vendor has already a full suite of products, hence yes, you should stop using your preferred Marketing Automation (MA) software or visualization software. However, there are vendors who are MA or visualization software agnostic.

Why is being that flexible a huge benefit?

Let’s say that you implement a CDP solution today and after 6 months, for whatever reason, you decide that the Marketing automation software (or your visualization software) does not meet your business expectations. Instead of throwing all of your CDP-implementation out of the window, you can easily switch to your selected MA solution and the CDP partner will do the rest for you. Pretty cool, right?

How do you know if you need a CDP?

To help you figure out if this is the case for your business, I have gathered the following list of 10 questions that you can ask yourself to find out if a CDP is a right fit for you:

1. Are you able to ingest the right volume of data in various formats (structured/unstructured/semi-structured/relational/binary) to develop a clear understanding of each individual customer?

2. Do you have multiple engagement channels? If so, do you have an existing approach to combining data (including offline and online) from these systems?

3. Is third-party anonymous data included in your data strategy?

4. Can you easily clean, transform and standardize your data?

5. Are you able to resolve identities and ensure privacy/compliance to deliver a great customer experience?

6. Can you deliver a seamless experience to customers regardless of the channels through which they choose to interact?

7. Are you able to segment and analyze customers in real-time to enable personalization and improve relevance in customer experience?

8. Do you generate universal customer profiles and make these profiles accessible to the analytics solutions that you may need, in the required time-frame and format?

9. Are you able to create look-alike audiences and identify new, additional customers likely to purchase products or identifying customers that are going to cross/up sell or even churn?

10. Can you act instantly, based on the insights you get, by making the unified data directly available to other systems such as a CRM, a Marketing Automation system or an advertising platform?

If the answer is negative to at least one of the questions above, then you probably want to  consider a CDP solution, which helps to solve all of the above.

How can you use a CDP in your business? (Best practice & Use cases)

Before you start typing an email to us requesting a demo, we want to give you some inspiration on what you can accomplish with a CDP. Why are use cases important? Well, a software can do as much as you have planned for; nobody wants to purchase an SUV car just to drive to the grocery store and back. Hence here is some inspiration on what you can achieve with a CDP.

 

#1 Optimize marketing spend

Stop advertising to existing users and target only new potential customers (cut marketing spend). 

You can target look-alike audiences and avoid spending budget on acquiring users that will not convert or that have a customer lifetime value that is not big enough.

 

#2 Unify online and offline data

Merge data from social media, your ecommerce platform, CRM, ERP, POS into one place. Unify customer data from online and offline to deliver a holistic customer experience with personalized offers. 

Through deterministic and probabilistic matching, we can create universal and persistent consumer profiles by solving the identity of customers and visitors across different states (known & unknown).  

What does this mean? That we can create a unique customer profile, if we connect many different identifiers from multiple platforms and devices in real-time to enable people-based targeting, personalization and measurement.

 

#3 Run win-back campaigns (and avoid churn)

Choose criteria relevant for your business. For example, a customer: 

• Files more than 1 complaint/month

• Visits the ‘how to return your order’ page more than 2 times/month

• Hasn’t purchased anything in the last 3 months (online or offline)

Have an alert be created from your CDP solution (SMS, email) to win-back this customer, either by calling him/her or via email/SMS. 

Remember:  “It can cost five times more to attract a new customer, than it does to retain an existing one.”

We believe that the above use cases are great for all companies but we do have specific use cases for a few industries that we specialize in like Sports, Entertainment, ecommerce & Retail and Utilities. 

Tips for getting the buy-in for your CDP

As you know, it’s crucial to get key stakeholders onboard and this is what today’s lesson is about. 

Below is a checklist to help you get buy-in from key stakeholders  in your organization. If you succeed, you’ll be a hero internally. So take it step by step and reach out if you have any further questions and I’ll make sure you get the support you need. 

 Connect use cases with key business goals 

To get the right attention internally in the first place, you need to demonstrate use cases and how they can help reach strategic goals and business value. Many people see the value in having a CDP, but struggle with connecting it to a real return on investment. 

Make sure to mention how having a CDP can keep costs down by reducing time spent preparing data, improving its quality and doing other IT or analytical related tasks. In short, focus on what you can earn and save in terms of money and time for the business. 

Promote a single customer view

Bring in the right stakeholders from the beginning. Think about who do you need support from to succeed? One key objective of having a CDP is to get a single source of truth and to bridge the gap between different departments. A streamlined customer experience requires a streamlined organization that works together. 

To get a single customer view you need to involve stakeholders that oversee the different kinds of customer data, such as marketing data, customer support data, point-of-sale data, in-store data, and more. Having all the right stakeholders involved in the beginning will help you get buy-in and launch a successful project. 

 Promote a data-first future

Customer data and technology to collect, analyze and act on the data – isn’t going anywhere. Customer today, no matter if you are B2B or B2C, expect you to know them. They expect to get a relevant, personalized and engaging customer experience. This can only be delivered using data. 

Also, privacy rules and laws (hello GDPR) are constantly changing to regulate the customer data use. A CDP will be essential for complying with data privacy, both now and in the future. It’s an investment that will both deliver the customer experience you customers expect and it will help your team to stay compliant with rules and regulations. 

 Encourage a no-silos setup  

Different departments tend to look at different types of data sets. This not only makes it confusing internally (because most people only know about their own type of data set), it also blocks organizations to achieve business value. 

Be the driving force internally to translate different datasets into a single source of truth. Working with data is the key to developing a company’s digital transformation, complying with current and coming data privacy laws and developing a relevant, real-time and personalized customer experience.  

Getting buy-in for a CDP, can be easy or difficult, depending on your organization. However, if you succeed to get the right stakeholders onboard with the right CDP provider that can help you thrive, you’ll be a hero internally. Take it step by step.

Questions to ask when talking with vendors

You now know what kind of functionalities a CDP should support and how to avoid cooperating with a non 100% CDP partner. In addition, you have the use cases and the KPIs in hand. You can’t wait to choose the best technology partner.

But how do you do that? How can you evaluate which one meets your business needs?

The answer starts with asking good questions. The questions below are some of the core considerations we recommend. CDPs differ in levels of advanced features and technical complexity, so it’s a good idea to have a list of questions to ask vendors before making a purchase.

Here’s a few to get you started:

1. Does the CDP track both anonymous visitors and known customers across devices?

2. Does the system function deterministically or probabilistically? (Note that deterministic providers are more likely to be compliant with privacy regulations.)

3. Does the CDP integrate with all data sources we need to bring together? How about activation tools (email, digital advertising, push notifications, dashboards)?

4. How easy is it to change the activation tool in case we purchase a new technology?

5. Does your CDP include GDPR compliance features? Is it hosted on a secure, cloud-based server?

6. Does the CDP offer predictive scoring and machine-learning to help you identify and target customers based on behavior and predictive insights?

7. Does the company provide both self-service and dedicated customer support and/or strategic services to help you succeed with the technology? How does their customer service rank?

8. Does the CDP provide the ability to orchestrate cross-channel campaigns mapped to customer journeys?

9. Does the CDP have a Marketer friendly interface?

Bringing it all together, a CDP is the key tool to provide an outstanding customer experience for your customers.

Hopefully you now are well informed and equipped to start your journey on finding the best customer data platform for your business.