A Customer Data Platform (CDP) stores first-party data and enables single customer views on customers and touchpoint contacts.
Although Gartner saw already last year the Customer Data Platform (CDP) on its "peak of inflated expectations" in its annual hype cycle, the term and technology has not really been received yet in corporate life, even though the CDP has enormous potential to use its own customer data smartly for the company's success. It serves to strengthen customer loyalty and increase customer lifetime value, besides helping to select the right channels and to address the right target groups during the customer acquisition process. Marketers should therefore consider a CDP, if they want to drive customer-centric marketing with data-driven personalization and customer journey analysis in their business.
First defined and developed in 2013 by David Raab, founder of the CDP Institute, the main goal of a Customer Data Platform (CDP) is to centrally store all customer data available in the company, to link these together for detailed analyzes and to transmit them to connected systems and tools.
It is always about first-party data that is only available to the company, whereby the CDP is the command center that gathers all information on the company’s customer information. The goal is to break down the individual data silos of departments and systems and make them centrally available to the entire organization. These data sources are e.g. analytics from your website, app, social media or online store, CRM and ERP system, store data and other offline sources that can be fed to the CDP in a digitized way. And we are talking about both transactional and behavioral data of your (potential) customers.
Single customer view
By means of the CDP, a single customer view for each (potential) customer can be created and all information about a customer can be summarized and stored in a profile. That way it is possible to determine the customer lifetime period and use the recorded customer journey in the right place with the right messages or offers. Every action, every touchpoint with your brand is recorded. Be it the visit and the surfing behavior on the website, the use of the app, the communication with the customer service or even the purchase in a branch.
Personalized on-site and off-site campaigns
For marketing, this integrative approach to all customer data has enormous significance. With the CDP, cross-channel campaigns can be easily realized, making on-site and off-site campaigns more efficient.
On the one hand, the marketer can adapt and personalize his own channels to the customer's journey phase; on the other hand, he can control his communication and advertising channels much better. The data from the CDP is generally used for real-time personalization that increases the user’s experience and promotes engagement, since within the marketing automation, a one-to-one communication can take place.
Highly qualified custom audiences
The acquisition of new customers and the expansion of their own core target groups is based on the analysis of their own customer data. The selection and identification of communication and advertising channels is greatly facilitated. The channels are used efficiently, because marketers do not solely rely on third-party data, but use own custom audiences (e.g. Facebook interests targeting).
Moreover, these custom audiences are not based solely on a source, such as the general visit of the own website or a conversion within the web offer with the help of the Facebook pixel, but are formed in detail from all existing touchpoints, transaction and behavior data, which are then passed on to the advertising networks. The higher-quality custom audiences allow to identify better look-a-like audiences to expand their own target audience and optimize new customer acquisition.
Email and newsletter marketing benefits
The times of the standardized newsletter are over. In addition to classic personalization and recommendation criteria that target larger audiences and segments (such as female versus male target audiences), CDPs have the added benefit of individualizing email communication based on single customer views in an automated way. For each specific customer case, appropriate scenarios have been developed that align with the interests, transactions, behavior and current customer phase in the customer lifecycle. They use more criteria, features, and behaviors that are clustered and trigger email communication.
So far so good, but before introducing a CDP, the structures within the company must be created. It is an integrative database to which all departments dealing with customer data should have access. The project responsibility has certainly marketing, as the impact of a CDP is the strongest there. Of course, the implementation should be well prepared and all responsible department heads must be involved so that conflicts do not arise later. An intensive conception and evaluation phase should follow.
Not to mention that the previous marketing processes, such as analytics concepts, existing personas, campaign management, advertising, retargeting, monitoring, and reporting must be coordinated with the new CDP, followed by an intensive examination of the very own customer groups to define all scenarios and to design appropriate means of communication, whereby the biggest resource needed is the production of personalized content assets and the building of marketing automation processes.
By Daniela La Marca