The process of collecting and processing customer data has become complex for businesses. Traditionally, teams have only had access to limited amounts of customer data analytics, and in many cases, the information is inconsistent across systems. With a lack of basic best practices for customer data management, businesses are missing the ability to see the full scope of how customers move through the buying journey. Consequently, customer data platforms have never been more of a crucial investment for customer service, sales, and marketing teams. According to Forbes, companies effectively using customer data platforms enjoy 2.5 times more in customer lifetime value than those that don’t.
In a much simpler time, when the customer buying journey was limited to fewer touchpoints, dividing data between different teams at a company worked well. However, as new platforms emerge with more ways of reaching customers, being able to easily access customer data will have major benefits. This includes knowing what your customers want and how to get it to them as fast as possible. According the CDP Report 2020, enterprise businesses are sending data to 20% more destinations than to small and medium businesses. Still, CDPs are seeing high adoption by SMBs and the enterprise alike. As businesses grow and data becomes more fractured, a CDP can help unify important data.
Tracking and collecting customer data, like consumer behavior and purchase history, also helps you understand and tailor offerings to customer needs. For example, you can use those customer data analytics to create personalized and timely offers in efforts to help boost sales and enhance the overall customer experience. A good customer data platform will give you the benefit of having access to a unified customer profile. This contains the most up-to-date customer data from every system of record within your organization.
In this article, you’ll learn the basics of a customer data platform, how it differs from customer relationship management and data management platforms, and how it can help your customer service, marketing, and sales teams be more successful.
What is a customer data platform?
A customer data platform (CDP) is a management system that creates a complete customer profile, allowing teams across an organization, from sales to customer support, to target new audiences, understand existing customers, and personalize customer experiences.
CDPs pull customer data across multiple channels into a single database, allowing you to build a unified profile around each customer. Data can be collected from your website, mobile app, social media, and anywhere else someone might interact with your brand. The structured data from a CDP can then be delivered to other marketing tools in your stack. Using this data, teams are able to better improve their customer programs with customer-centric features and targeted campaigns.
The differences between a CDP vs CRM
Capabilities of a CRM
CRMs help you increase efficiencies in managing your customer data. As you input customer information into your CRM (e.g., phone calls, emails, contact details), it organizes the data in one place. A CRM also allows you to derive insights which can be used to personalize conversations and offer individualized sales and marketing programming for prospects or current customers. While CRMs are useful for specific tasks, new methods of real-time communication between brands and customers, including social media and messaging, means that modern customer data is less structured than the basic contact details that CRMs collect.
Additionally, data is delivered at higher volumes than ever before. CRMs are also harder to integrate into all available customer channels that create a true omnichannel customer experience. Because of these shortfalls, CDPs have emerged as a better solution for turning valuable customer data into richer and more proactive customer-centric campaigns.
How CDPs go above and beyond CRM capabilities
CDPs were designed to fill the substantial capability gaps of most CRM platforms. In addition to the usual CRM tools, CDPs also offer:
Single customer data records – The record is consistent across all systems and includes a robust range of data points such as location, IP address as well as phone and email.
Broader data collection points – Data collection goes beyond the typical transactional data to also include further reaching sources such as social media.
Data analysis – Analysis can be done manually or rules can be written to include automatically generated reporting.
Marketing channel integration – CDPs can be easily connected to all other tools within the marketing stack, including email, social, website, and advertising platforms.
Increased autonomy for teams – With all the integrations allowing for data to flow through the systems, IT is no longer a bottleneck in order to get access to customer data analytics.
Artificial intelligence – New tech, like AI, can help your CDP mine your customer data. Satish Thomas, a director of product management at Microsoft told the Futurum Tech podcast, explained the AI enriches customer data. "Now it’s one thing to be able to bring all this data together, but being able to leverage this unified view for you to be able to do AI on top of it," he said. "So if you look at the data and that unified view that a CDP produces, it becomes a foundational piece for AI."
Unlike a CRM, CDPs are able to deliver a complete view of the customer and serve as a key foundational component of the automated marketing stack.
The differences between a CDP vs DMP
While similar, a CDP is different from a data management platform (DMP) in how it goes about collecting and using customer data. Whereas CDPs mostly use first-party and sometimes, second-party data, DMPs mostly use second- and third-party data.
Through DMPs, large, anonymized data sets are collected and managed. These sets might be purchased from a data seller, or some companies might have access to a large number of users where they can gather customer data and anonymize the information. For example, social media platforms like Facebook or Twitter can access user data, anonymize it, and sell it to advertisers who can then use that data to target users within the social platform.
When to use a CDP vs DMP
DMPs are best used for creating short-term marketing campaigns geared towards new audiences. Using third-party data, you have the ability to introduce your brand to prospects who might not have come across you based on select criteria, such as online behavior.
CDPs are used to gather, organize, and apply first-party data in a much more ethical approach. CDPs are also great for creating highly personalized marketing campaigns to target existing customers. Sales, marketing, and customer support teams are able to pull customer information straight from direct and indirect interactions with your company.
It’s possible that your company might use both platforms for marketing purposes. A CDP can help you track and collect website visitors, while a DMP enables you to take that data and use it to create targeted advertising campaigns for new audiences.
How customer data platform software can help your business grow in sales
For targeting and nurturing prospects, you might turn towards developing a CRM sales strategy to help your sales team increase sales, boost efficiency, and improve customer experience. But there are many more ways to help improve your customer support team’s productivity by having a CDP in place.
Account-based selling is a hyper-personalized approach to selling. Sales and marketing teams work closely together to close accounts containing high-value customers. There are three key ways your teams can utilize CDP data to improve account-based selling programs:
1. Signalling real-time alerts
CDPs can be used to track online customer behavior and automatically notify sales reps when an account hits a certain threshold signalling strong intent to buy.
Examples of alerts that can be created through your CDP include when a user:
- Clicks to your website’s pricing page
- Visits your website product pages multiple times over the course of a specific time period
- Signs up for a free trial or demo
2. Providing context to aid more insightful conversations
Sales and marketing teams typically have unique, and sometimes inconsistent, sets of information when it comes to approaching customers. If that customer data were to be shared across teams, both sides would be better prepared to have relevant and intelligent conversations with prospects.
A CDP can combine data across all the systems used by sales and marketing to help drive more sales. This data includes:
- The number of individuals within a single account who are engaging with marketing content, and what content they’re engaging with.
- Contact and date information for anyone who requests a free trial.
- Contacts within an organization who are already in conversation with a sales rep, to avoid multiple engagements or versions of messaging.
3. Qualifying accounts and lead more accurately
You can use CDP data to identify which users have been interacting with your website the most but haven’t converted. With this type of information, your sales team will know what kind of customer profile to target.
To improve account qualification and lead generation, you can:
- Find and engage qualified website visitors by prompting them to sign up for automated newsletters or any forms of email marketing campaigns.
- Allow customers who sign up for a trial or demo to schedule their own meetings with sales rather than waiting for sales to follow up.
- Identify what their needs are based on the pages they view.
- Prompt tailored messages and offers through an automated campaign.
How customer data platform software can improve customer experience
As technology gets savvier, so do modern customers. Companies are now expected to deliver a seamless and consistent user experience across all digital platforms.
CDPs can assist you in creating a consistent and positive buying experience using unified, well-organized, and secured data gleaned across multiple platforms, from Facebook to Sell. With this data, you’ll be able to get a 360 degree view of your customers needs, hobbies, buying habits, the media they consume, and much more.
With features that help you create rules within the CDP, you can analyze and organize data to segment your audience, create push notifications, personalized campaigns, syndication, and more. These organization tools will allow you to improve your results by adjusting and tailoring your marketing strategies to your audience.
There’s never been a better time to use customer data to help grow your company sales and improve the customer experience. In combination with other data platforms, such CRMs (which compile and organize customer data in one place) and DMPs (which process and analyze huge volumes of third-party user data for targeted advertising campaigns), CDPs can set the foundation for highly successful sales and marketing programs.
Every time a visitor browses your website or social platforms, it’s a valuable opportunity to learn more about your prospects. Having a good CDP in place will not only help you collect that information, but also communicate that information across all teams so that your company can approach customers with a unified front. You’re able to easily derive valuable customer insights, respond quicker to the demands of your customers, and set yourselves up for a longer lasting, higher quality relationship with customers.
To get started with building on your own customer data, check out our platform offerings.
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