Analyze and use customer data profitably
HOW A CDP WORKs
The main task of a customer data platform is to link all the data of a company's customers that are delivered from different sources. Identifying the customer involves having a single customer ID from different CRM sources, and using this ID to link existing databases together. These can be e-commerce engines, marketing clouds or service software.
The CDP has now created uniform customer profiles and now has the task of making this data available in real time so that personalised experiences can be prepared for the customer from the user data. In summary, the goal of a CDP is achieved with the following individual tasks: collecting data and bringing it together, activating the data, and providing insights for marketing.
PRACTICAL USE OF CUSTOMER DATA PLATFORMS
Every user of online shops has already had relevant experiences with purchases made through CDPs. Amazon shows its users purchase recommendations because the system already knows from various sources what the customer would like to buy next. Netflix offers series recommendations that fit the user profile with amazing accuracy. Customers today take it for granted that eBay, Amazon and Co. know their personal preferences precisely and want experiences and offers tailored to them and, of course, fast service. In marketing, meeting these expectations is no longer just a nice-to-have, but a customer wish to be fulfilled as a matter of course.
From the customer's point of view, modern marketing is expected to reflect the user's interactions in the company's mobile apps. However, the problem here is that many companies use another data set for "mobile shopping" that has nothing to do with the interactions on the desktop browser. In short, one customer, but multiple data sets through the use of different devices or platforms. In addition, there are interactions through personalised emails that provide further information about customer behaviour.
All this data needs to be brought together to provide the customer with a consistent experience. The majority of all customer journeys consist of three or even more channels (email, web shop, mobile app, various social media), which are changed as often as desired. This creates multiple isolated experiences of the same customer. A customer data platform brings these separate data together to make them usable for marketing.
CHARACTERISTICS OF A CUSTOMER DATA PLATFORM
By creating and continuously maintaining a unified database containing customer profiles with a unique identifier, a CDP provides a view of each individual customer with their master data and buying behaviour, and thus a reliable database for marketing actions of any kind. This data can be used by other marketing platforms and systems and also provides important data for campaign management, marketing analysis and, last but not least, business intelligence. From the data analysis, a CDP can even plan and suggest the next steps for the acquisition of new customers and the retention of existing customers.
Since CDP systems were designed for and are also controlled by marketing, customer data platforms make it easier for employees who are less tech-savvy to quickly access and analyse customer data. The marketing department of a company is already in possession of the customer data in processed form without having to request it from the IT department in a time-consuming manner. As a result, business processes can be significantly accelerated and immediate reactions to changed market situations can be made.
WHAT IS THE DIFFERENCE BETWEEN CDP AND CRM?
Customer data platforms are sometimes confused with CRM (customer relationship management), as the latter also deals with customer data. However, a CRM has completely different purposes than a CDP.
A CDP is a tool designed for marketing to create targeted marketing campaigns in a personalised form from various data sources. In contrast, CRM solutions are designed for sales. However, the data generated from a CRM can be used for the customer data platform, allowing a company's marketers to build a closer customer relationship. CRM solutions, unlike CDP solutions, do not aggregate and analyse data from multiple sources, but a CRM solution can certainly use CDP data and vice versa.
FUTURE PROSPECTS OF CDPS
Creating customer profiles with all their movements and interactions on different channels is the core objective of a CDP. However, the profiles not only provide a complete overview of each individual customer, but ultimately also a reflection of the success of the entire company. Despite all the advantages, Custumer Data Platforms are limited in their capabilities when it comes to analysis and artificial intelligence (AI). The next stage of development is the Customer Intelligence Platform, or CIP for short, which uses cloud-based intelligence and machine learning for purchase recommendations and predictive models.
With the increase in the importance of customer data of all kinds, growing demands can be seen especially in the management of customer data. Companies are supposed to address their customers in a target group-oriented and timely manner, but usually face the problem that the data isolated in different data silos cannot be used efficiently. Therefore, it is of great importance that companies act in accordance with the digital transformation and rely on analytical CDP solutions in order to be able to use every customer data, no matter how small, for business success. This is what makes individualised interaction with the customer possible in the first place. CDP systems meet this challenge with solution-oriented approaches.