CDPs are not a complete replacement of existing tools. But they can help eliminate many customer data challenges for marketers.

Rakesh Kumar

Rakesh Kumar, chief technology officer at Pimcore Global Services

Today, organizations interact with their customers through various touchpoints, from a website live chat to a social feed, from mobile applications to wearable devices, and more. As a result, customer data comes in more fragmented ways at an unprecedented rate.

Marketing teams struggle to integrate and operationalize such fragmented customer data for executing their campaigns at speed and scale. When it comes to running multichannel marketing campaigns, the challenge gets even bigger. Another obstacle is augmenting existing customer profiles with additional data. Customer data platforms (CDPs) present an exciting option for marketers hindered by the limitations of their current technology in handling customer data management and customer analytics capabilities.

What is a customer data platform?

A customer data platform (CDP) can help you with a unified database that can ingest data from varied sources, making it available to a single profile for each customer. CDPs solve data silos, and companies should incorporate them into an enterprise data management strategy.  According to Gartner, a customer data platform is a marketing technology that unifies a company’s customer data from marketing and other channels to enable customer modeling and optimize the timing and targeting of messages and offers.

CDPs are evolving fast to provide an intuitive user interface to marketers to minimize their dependency on technical teams and stay agile. They enable marketers to maintain high data quality and enhance governance and controls across customer data usage.

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How do CDPs help build engaging customer experiences?

Here are six things CDPs could do for your business:

1. Collect data at an individual level

A CDP helps you to seamlessly collect data from various sources, both online and offline. You can enable first- and third-party customer data collection that can be omnichannel and real-time, making responses more uniform, quicker, and more effective. Both qualitative and quantitative data are collected and presented in user-friendly interfaces for the organization’s benefit. The platform can help you collect several types of data such as identifier data like browser cookies, device IDs, and more, and behavior data like page visits, number and types of sessions, preferences, spending patterns, active/inactive days and times, and more. It also gives you the ability to ingest customer data from disparate sources. With the ability to digest first-party, individual-level data, including identifiers and demographic information, CDPs help you get insights into customer buying patterns and preferences.

2. Unify customer profile with a 360-degree view 

Customer data platforms consolidate data from multiple sources into a single, understandable customer profile with specific attributes. The core idea of CDPs is to consolidate personally identifiable information (PII) and create views of different customer profiles, also known as Unified Customers Profiles. CDPs bring together data from customer interactions across sales, marketing, support, transactions, and more to make these profiles highly personalized. Once the software collects data from various sources, CDPs can consolidate profiles at a personal level by linking multiple devices to a single individual, connecting attributes to identities, and de-duplicating customer records such as various phone numbers or email IDs. This ensures data accuracy and enhances reliability.

3. Cleanse data and improve data quality in customer profiles 

Marketing teams gather vast amounts of data at a granular level but cannot fully leverage it as often due to low data quality. The need for high-quality and trustworthy data can be the differentiator between good and bad marketing decisions. Recent studies show that companies could drive 70% more revenue purely based on data quality. With CDPs, you can get integrated data across channels relevant to your business, updated in real-time, and refined for the highest quality. The platform can help you verify and cleanse missing or bogus information like names that say, “Donald Duck” or phone numbers that are “000000000”. You can also use the platform to avoid duplication, have a standard format, and weed out outdated data. 

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4. Build advanced segmentation to improve conversion rate

Data collection and its analysis are one part of the solution. Creating accurate customer segmentation is another crucial capability needed for personalized campaigns. With CDPs, you can create more precise Recency, Frequency, Monetary or RFM models that make behavioral predictions more efficient. In fact, you can create much smaller segments, as tactical as “Parents of children between the age 2 to 4 who looked for pre-schools in the last 15 days“. With a well-segmented customer base, you can send the right message to the right user at the right time and boost engagement levels that lead to higher conversions. 

5. Enhance marketing agility and returns

With consumer patterns frequently changing across multiple channels, comprehensive customer data is vital for building agile marketing setups. CDPs can help seamlessly manage new customer data points to enhance customer experiences. You can set an engagement pattern for email campaigns, mobile messaging, advertising, etc. With integrated marketing automation and CDPs can enable hyper-personalized customer journeys resulting in greater customer retention. Not only does this result in increased conversions, but it also leads to a much better ROI. CDPs help brands respond faster and better to market shifts and leverage new trends for business growth to stay ahead of the curve.

6. Help you experiment with fresh marketing ideas  

Working with CDPs can also allow greater experimentation so marketers or customer experience experts can set and test multiple scenarios and combinations in their campaigns. CDPs can help pin the entire customer journey accurately to work on any assumptions and trials better. The platform can integrate customer data from known and unknown sources for offline and online touchpoints to paint a complete picture of each customer journey. As the data is cleansed, standardized, time-stamped, and marked as relevant, it is easier to try fresh marketing ideas. With a better understanding of customer behavior, CDPs also enable you to optimize the timing and targeting of messages, thus creating greater possibilities of a positive outcome of the experiment.

CDPs can help eliminate many customer data challenges for marketers. However, they are not a complete replacement of existing tools but an extension. Experts say that although customers frequently change channels and modes of engagement, they demand seamless interactions, tailored engagement, and instant gratification.

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With increasing privacy concerns and eliminating third-party cookies, organizations are more likely to shift toward first-party data strategies relying primarily on the customer data they collect with customers’ consent. The real-time personalization functionality of CDPs will come into play here as it will help brands understand customers’ needs better and deliver hyper-personalized customer experiences on the customers’ terms.

Pimcore provides open-source software for running ecommerce sites and data management systems.

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