Customer Data Platform: New Digital Marketing Tool
Gathering data on customer activity is only useful if you have a good way of managing it.
As companies continue to strive for greater insights into their customers’ experiences and behavior, they have gone to great lengths to accumulate significant amounts of data on online user activity.
However, the reality of consumers’ online behavior is that it is often fragmented and hard to codify into a coherent picture.
Take the example of a customer deciding whether they should purchase a piece of office equipment from a given company. That customer might first browse the company’s website, settling on a number of different options. Then, the customer might read its blog, watch videos on its YouTube channel, browse individual product pages and then go into a physical outlet to make the final purchase.
For the company selling the office equipment, this online trajectory can be hard to understand, if the data is not effectively gathered and then managed to create a unified customer profile.
Enter the Customer Data Platform (CDP): a software tool for marketers to aggregate data on customers from various touchpoints in order to build a unified and comprehensive understanding of that customer.
Complete Customer Profiles
The Customer Data Platform Institute – “a vendor-neutral organization dedicated to helping marketers manage customer data” defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems”.
The key to understanding the rationale of a CDP is to consider the problems marketers have faced in gathering, aggregating, updating and then effectively using individual customer data for marketing purposes.
Up until the emergence of the CDP, marketing departments have had to essentially pool customer data from a range of different sources into large databases. They would then need to continually analyze this data, updating customer profiles whenever new data that was considered relevant enters the database.
A CDP that has been specifically created and designed for a company will be able to accumulate data relating to individual customers from a range of different places – from activity on the company’s website, social media channels and physical stores, as well as third party digital platforms – and integrate this data with a customer profile automatically and constantly.
Defining (and understanding) Data
Perhaps the most critical – and difficult – aspect of getting a CDP to work effectively is the process of categorizing, acquiring and then organizing data in a way that actually contributes to building useful marketing strategies.
This collection of data-related processes is key to creating an effective CDP. Data sources / types can include data from customers such as:
- Profile data, such as their age, location, and other personal identifiers.
- Transactional data, such as purchase histories.
- Behavioral data, such as web and mobile activity.
- + Any other types of data that marketing teams consider useful for building customer profiles, while remaining compliant with data privacy laws like the EU’s GDPR.
What makes a CDP different from a traditional approach to this data-gathering is that this data is aggregated in a software platform that is accessible and immediately usable by marketing teams, instead of being something that needs to be mediated by an IT team, which can be cumbersome and delayed.
This makes CDPs much more dynamic and useful than large data pools, or Customer Relationship Management (CRM) tools that require constant manual inputs of customer data.
While the concept of the CDP has provided a welcomed new approach to improving customer experiences, it is still far from an exact or perfected science. There still remains a lot of room for improvement in refining these types of dynamic software tools, and many companies are still lacking when it comes to creating truly unified customer profiles and marketing strategies to match them.
However, through the continued collaboration of innovative software companies and marketing visionaries, the approach shows a lot of promise going into the future.
Does your marketing team need new tools for understanding your customers, their behavior and experiences? Get in touch to find out how we can help you.