Customer data management is a challenge for most businesses. Your customers have so many ways to interact with your brand, and their data lives in scattered systems that are difficult to access from one central location. As a result, it’s almost impossible to understand who your customers are, what they like, what they buy, and how often they come back.
With a Customer Data Platform (CDP), you can overcome these issues and get a complete view of your customers.
Read on to understand the importance of customer data platforms and the benefits they provide. You’ll also learn about the different types of CDPs available on the market today and how you can choose the right one for your business.
Table of content
- What is a customer data platform?
- Why is customer data management so important?
- Types of customer data platforms
- How to build a customer data platform
- Use cases of a customer data platform
- How to pick the right customer data platform for your business
- The bottom line
What is a Customer Data Platform?
A customer data platform brings together all of your customer data from different systems, so you can access it from one central location. A customer data platform will allow you to integrate your data from different systems, including your website, eCommerce platform, marketing automation tools, and CRM.
Most CDPs offer connectors that will allow you to pull data from your website and other systems. You can then enrich that data by adding information from other sources, such as third-party data sources or data uploaded manually by your team.
A customer data platform will also allow you to send data to other systems, such as your CRM, to enrich your existing data with customer details.
Why is Customer Data Management so important?
If you want to grow your business, you need to know who your customers are and what they care about. Otherwise, you’re just throwing products and marketing messages at random people.
But how can you know who your customers are if you don't have a clear overview of the data you have about them?
That’s the challenge that businesses face when it comes to customer data management. All of your customer's interactions with your brand take place across different channels and systems.
You might have an email marketing platform, a website, social media accounts, different types of product or inventory tracking software, and a CRM system. The only way to get a complete view of your customers is to bring all of these channels into one place.
Types of CDPs
There is a variety of CDPs on the market, which makes it difficult to choose the right one for your business.
To help you make an informed decision, here are the most common types of CDPs:
1. Data Enrichment
Some CDPs are primarily data enrichment tools. They allow you to integrate multiple data sources and enrich your data with additional information, like product reviews, website data, sales data, social media data, and more.
2. Data monitoring and analytics
Data monitoring and analytics tools allow you to track which channels are driving the most leads and sales for your business. These CDPs will allow you to track your customer journey across multiple channels and give you insights into how your customers interact with your brand.
3. Data discovery
Data discovery CDPs allow you to search for relevant and accurate data across multiple systems. You can use these CDPs to find the data you need to make informed decisions, like the specific customers to target with your marketing campaigns.
4. CRM integration
Some CDPs also integrate with CRM systems like Salesforce, allowing you to enrich your existing customer data with information from the CDP.
Now that we've highlighted the different types of customer data platforms, let's move on to the ways that you can implement a CDP in your business.
How to build a customer data platform
If you have decided to go with a CDP, you’ll need to decide which tools and systems to connect with your CDP. When you do so, you'll be able to create connections between those systems and your CDP to start collecting customer data.
Here are the various ways that you can build a customer data platform.
- First, decide which systems you want to integrate with your CDP. You’ll want to integrate your website and eCommerce platform, along with any sales, marketing, and product management systems.
- Next, find out if the CDP you’re considering supports the systems you want to integrate. If not, choose the CDPs that do.
- Once you’ve made the connections, start collecting customer data from your systems and enrich it with information from other sources.
Use cases of a customer data platform
There are many use cases of a customer data platform but here we'll highlight the most important ones.
1. Customer segmentation and personalization
With a customer data platform, you can segment customers according to their behaviors and personalize the customer experience across every customer touch point and channel.
With Engage, you can use our powerful segmentation feature to build unique user attributes and engage the right customer segments.
2. Predictive customer scoring
You can improve your customer profiles with predictive data like churn, open email rates, probability of purchase, etc.
3. Smart behavioral retargeting
With a good customer data platform, you can integrate with advertising platforms like Facebook and Google and leverage customer insights to run powerful marketing campaigns.
4. Data suppression
Sometimes, you can use marketing data to not only target ideal customers but to also know the ones to avoid. When you have a unified view of your customer profile, you can optimize your ad spending by suppressing customers that have already made a purchase.
This way, you can redirect your money toward new customers that are yet to make a purchase.
5. Gain more insights into customer behavioral data
Most analytics systems operate in silos, which makes it hard to create a consistent experience for all customers.
With a customer data platform, you can receive up-to-date customer interactions regardless of the channel the customer communicates with. This provides a great way to build customer loyalty and personalize each customer's journey.
How to pick the right CDP for your business
Once you’ve decided that a CDP is right for your business, you’ll need to decide which CDP is right for you.
While all CDPs offer some benefits, some will be better for your business than others. Here are some things to keep in mind when picking the right CDP for your business:
1. Identify your business goals
Before implementing a customer data platform, you need to define your organization's goals, desired outcomes, and the type of CDP that will suit your organization's needs.
Typical examples of company goals include:
- Empower team members to make informed data-driven decisions
- Personalize customer experience across every channel
- Maximize the ROI of marketing campaigns
- Gain more insights into customer behavioral data
2. Ease of use
You’ll be dealing with your CDP on a daily basis, so make sure it’s easy to use. Some CDPs have complex interfaces that will make it difficult to build reports and get the information you need.
3. The type of data you want to manage
Some CDPs focus on certain types of data, for example, customer data or website data. This means that this type of CDP helps ensure that team members in your organization rely on customer data to achieve business goals. It can also give them the ability to use that data across all aspects of your organization and tools to solve complex customer issues.
Other CDPs focus on using customer data for marketing campaign purposes, data collection, and analytic purposes.
4. Integration options
Consider how easily you can integrate your frequently used systems with your CDP. You don’t want to waste time connecting systems manually if there are quicker, easier ways to do so.
5. Cloud or on-premise
While this may not be a deal-breaker for every business, you may want to choose a CDP that offers a cloud solution so you don’t have to manage a server.
The bottom line
A customer data platform will help you overcome the challenges of customer data management by allowing you to sync your customer data from different systems in one central location.
You can then enrich that data with information from other sources, such as product reviews or images, website data, sales data, or social media data. This will help you gain a complete view of your customers, allowing you to make smarter business decisions.
Once you’ve decided on the right CDP for your business, you can start enriching your customer data with information from other systems, allowing you to gain a complete view of your customers.
With Engage, you can gather customer data and create groups based on various attributes and events.