CDP 101: Understanding Customer Data Platforms

Modern businesses can extract data from more channels, devices and touchpoints than ever before. This is a good thing; more data from more places means you should be able to understand your customers better. But all those disparate channels, devices and systems also make it hard to bring everything together to paint an accurate and comprehensive picture of your customers.

Without a clear understanding of consumers, businesses too often send their customers on fragmented, impersonal journeys. And traditional CRMs just aren’t up to the task of managing these experiences. Given all this, it’s no surprise that Customer Data Platforms (CDPs) are shifting from a nice-to-have to a need-to-have technology.

What is a Customer Data Platform?

Customer Data Platforms are software platforms that creates a consistent, unified customer database accessible by other systems.

From a marketing perspective, CDPs offer many benefits:

• Consolidation of all customer-related data into one platform;

• Analysis of data to gain a better understanding of customers; and

• Personalization of marketing to allow targeted advertising, content, campaigns and offers.

What Kinds of Customer Data Do CDPs Collect?

Customer data platforms collect information across various touchpoints – including in-store POS systems, websites, mobile apps, marketing lists and social media. They collect a wide array of data:

• Registration data (name, contact info, gender, etc.)

• Communication and notification preferences

• Demographics (age range, gender, region/market, income range, etc.)

• Transactions and payment preferences

• Website and mobile app activity (searches, views, time spent, clicks, journey, browser, IP metadata, etc.)

• Complaints and feedback (call center and chat interactions, NPS scores, etc.)

• Social media interactions

• Marketing and campaign data (interactions, responses, impressions, engagement, etc.)

What Kinds of Customer Personas Are Aggregated?

Personas can be highly customized but there are some typical personas aggregated by CDPs:

• New users on a website or app

• Anonymous returning users

• Registered users/customers

• New users from lists generated by marketing campaigns

How Do You Bring Data into a CDP?

Because data is typically siloed in multiple systems, it has to be brought together into your CDP. This can be done with connectors included within mature CDPs. Or, if a customer data platform doesn’t have pre-built connectors, APIs can be used to create custom connectors.

What Other Systems Are Involved?

Any system with customer data of interest can be integrated with a CDP:

• Marketing and advertising platforms

• Customer relationship management (CRM) systems

• e-Commerce systems

• ERP systems

• Transactional systems

• Web applications / Portals through embedded analytics scripts

• Social media platforms

How Do You Build a 360-Degree Customer View?

CDPs link data together to build a 360-degree view – encompassing all channels and touchpoints – for each customer. Building this view is complex and involves quite a few steps:

• Cleansing the data

• Deduplicating the data

• Enriching the data

• Unifying/merging the data for each customer

What Does a 360-Degree Customer View Tell You?

A 360-degree view of your customer shows how they’ve previously interacted with your brand. Analyzing this view can help you more effectively deliver marketing and user experiences across every channel.

There are a lot of ways to analyze data to gain a 360-degree view:

• Slice and dice customers’ data in order to understand them better.

• Summarize and aggregate data to explore customer behavior in detail.

• Use behavioral analytics to determine purchase and usage patterns.

• Employ machine learning algorithms to understand patterns and predict behavior.

• Group customers into segments based on their behavior and then perform cohort analysis over time.

• Build propensity models to understand consumers’ likelihood to buy.

And many ways to use the insights gathered from a 360-degree view:

• Orchestrate campaigns, targeted offers and advertising through the appropriate channels.

• Provide personalized experiences to customers across different touchpoints to up-sell and cross-sell products or services.

• Streamline journeys to increase conversion rates.

• Enable customers to easily find easily what they’re looking for – or what they may need.

Learn More About Customer Data Platforms + Material

If you’re interested in learning more about CDPs or want to uncover more ways to use your data, gain customer insights and grow your business, reach out. Material can help. Let’s start the conversation.