The customer data platform, or CDP for short, is becoming increasingly important in companies. This is not surprising: For years, especially marketing managers have been searching for the much-cited 360-degree view of their customers in vain. With a customer data platform, this phrase can finally become reality.
Meanwhile most companies store an incredible amount of data. However, this data is often scattered unstructured in various systems. Most of the time, important informations cannot be found - just when they are needed most. For example, to counteract a complaint of a customer or simply to improve the customer experience.
CDP: Increasing importance for customer analytics
With the possibility of analyzing customer information more precisely for creating a completely new type of customer experience, the importance of using a CDP in companies is growing. These modern platforms are specifically designed to bring together all information in a single intelligent environment to offer marketing, sales and service a holistic view of the customer.
CDP: Importance of the Customer Data Platform in companies grows with the increasing amount of data.
A CDP is much broader in scope than a traditional CRM system, which many companies have been using for years. While CRM solutions are designed to enable management and analysis of a specific channel, CDPs unite data from all company channels in a single platform. Although CRM and even business intelligence solutions have provided a lot of information about customer behavior, CDPs link customer data directly to marketing, sales and service initiatives.
CDP Meaning - The Definition of a Customer Data Platform
According to the independent CDP Institute, a customer data platform simply is a software package that creates a persistent, unified customer database that is accessible to other systems.
More specifically, with a CDP, companies can unify all enterprise-wide data - whether proprietary or external, from the CRM or BI system, on- or offline-collected information - across all channels. In this way, a complete 360-degree view of each individual customer is achieved.
A CDP does NOT replace existing enterprise tools and platforms, but rather functions as a middleware between all silos. This is the only reason why data stored in the CDP can be used by other systems to analyze and manage customer interactions.
By using a Customer Data Platform these departments have unified, real-time access to information from a variety of sources, including the call center, sales data, mobile apps, customer lifecycle trends, websites, social media, and email. So it is possible to personalize interactions more than ever before.
CDP: Importance for customer targeting grows
Especially when it comes to higher-quality customer communications, CDP is gaining importance. For example, a Customer Data Platform can help marketers organize their data, improve audience segmentation and campaign planning, enhance the content experience, streamline cross-channel marketing orchestration and optimize data analytics. Other benefits:
- Improved competitiveness. Using and analyzing customer data makes upcoming decisions much easier.
- Increased transparency. Customer-relevant departments can react more quickly to changing markets or customer preferences.
- Customer loyalty increases. With a better understanding of needs and the ability to forecast, customers are more likely to become repeat customers.
- Better relationships with vendors and partners. A CDP enables a better quality and more targeted interactions with partners and vendors.
- Increased customer visibility. The customer data platform helps companies gain a 360-degree view of the customer. CDPs pull data from a variety of sources that were previously inaccessible.
- Improved measurement capabilities. Because CDPs bring everything together in one place, the platform provides metrics for a range of marketing initiatives including website visits, campaign results, content performance and customer journey analysis.
Pent-up demand for data analytics
However, a CDP alone does not make companies successful. A pre-defined strategy and cohesive technology solutions are critical to long-term success. Even when the information is available at the right time, companies still have a long way to go in extending their learning curve with data science. At the moment, most organizations are still in the early stages.
This is also confirmed by a survey of 400 marketing managers conducted by the market researchers at Forbes Insights and the CDP specialist Treasure Data. According to the survey, marketers still need too much time to analyze the success of a marketing campaign or sudden changes in customer behavior and draw conclusions. Forty-seven percent of respondents say this process takes more than a week. Another 47 percent indicate three to five days.
52 percent of executives say that they still need to implement tools and solutions to accelerate the customer experience, while they have a variety of technologies in place across departments and business units. Yet there is little sharing among them. But the existing systems are simply not suitable. Only 19 percent have a robust set of analytics tools to support customer data-driven decisions and campaigns.
CDP: Growing importance in day-to-day business
This is precisely why CDPs will become increasingly important to emerging, digitally savvy companies. Not only to get a 360-degree view of the customer, but also to interact with customers through the channels of their choice. Each customer data platform will look different for every company because every organization has a different focus, communicates via different channels, or has different customer structures. Therefore, CDPs must guarantee a high degree of scalability.
But one thing is certain: CDPs make it possible to piece together customers' intentions based on the vast amount of information available from a wide variety of sources. To trade the unprecedented amount of this information, companies need more power than ever before. Right now, a CDP offers the most comprehensive capabilities to sift through all this data, find relevant customer journeys, and act accordingly.
Do you have questions about the possibilities, the implementation or handling of a customer data platform? Don’t hesitate to contact us!
