Wouldn’t it be great if you could …
Send a customer, who has not purchased from you in 10 days, and is close to one of your restaurants, a push notification and invite them to stop in?
Suppress any digital advertising displayed to your existing customers in order to focus on new acquisitions?
Offer free shipping to a customer if they abandon their cart and their lifetime value is more than $10,000 or provide a 10% discount if they have not purchased in the previous six months?
Enhance promotions in real-time to your current account holders if their credit score is 700+ and they have been a member for more than 2 years?
Modify the image and language of your mobile promotion to individuals based on applying recently acquired intel of psychographic triggers that drive their purchase behavior?
The answer should be, if you are at all interested in marketing to humans, yes. This is the holy grail of modern marketing. Practitioners would do a firewalk to be able to personalize content in real-time based on signals across multiple channels of data.
The key to being able to deliver these types of capabilities is the elusive holistic (360-degree, single source of truth, unified profile, or some other buzzword currently floating around marketing circles) view of your known prospects and customers.
Fortunately, marketers do not have to walk on fire to bear witness to the holy grail of marketing. That’s thanks to the emergence of a new software category: the customer data platform (CDP).
Gartner defines a CDP as “an integrated customer database managed by marketers that unifies a company’s customer data from online and offline channels to enable modeling and drive customer experience.”
So, how does a CDP compare to those other three letter acronyms marketing professionals love to bore people about at cocktail parties?
CDP vs. DMP vs. CRM vs XXX
A CDP distinguishes itself from other systems in an organization’s technology stack in four areas:
- It must be manageable by marketing and not require IT interference.
- It is not necessarily a data warehouse but rather unifies existing customer data from disparate sources into a single record.
- It focuses on known users to the organization or anonymous visitors to your web properties that may convert at some point.
- It supports real-time data streaming to take immediate actions across multiple channels.
Many marketers often think of their CRM application as a centralized customer data hub and the system of record for customer data. However, it does not offer the real-time access or data integration capabilities required to successfully deliver true data-driven marketing.
How many organizations integrate digital analytics into their CRM? In contrast to a DMP which is geared toward management of 3rd party data and development of audience segments, a CDP is more focused your organization’s 1st party data. So, while there is some overlap in capabilities, the CDP bridges the gap between a DMP early in the customer journey and a CRM later in the lifecycle.
4 Core Benefits Enabled by CDP
With historical roots in tag management and campaign execution, CDPs are evolving quickly and delivering value to companies that have adopted the systems. They are critical tools for the modern marketer who is looking to deliver data-driven programs that require the right message to the right person delivered at right time and on the right channel. CDPs offer companies four core benefits.
1. Single Source of Truth – The ability to unify demographic, transactional and behavioral data from both online and offline sources into a single profile creating a holistic view of users not previously available to marketers.
2. Digital Ad Effectiveness – CDPs help reduce ad waste through frequency capping, suppression, and media mix modeling by enabling real-time visibility into digital advertising.
3. Real-Time Personalization – Customer experience is enhanced through the personalization of interactions across channels and the optimization of existing investments in marketing technology.
4. Cross-Channel Analytics – Marketers gain true insight into performance throughout the customer journey across multiple channels and devices that can be leveraged to optimize revenue and increase customer loyalty.
The need for CDPs is clear — 90% of marketers consider an omnichannel customer view important for marketing effectiveness, but less than 20% currently have such a view according to a recent LiveRamp survey. And because most marketers are juggling 6+ tools to collect performance, it is not surprising that 59% say data collection and centralization is their biggest challenge and 50% report issues with the accuracy of reports according to an IDG Connect survey.
Recommendations for Developing a CDP Program
As technologist David Raap, who first proposed the idea of CDPs back in 2013, remarked, “It’s an important concept and represents one of the few fundamental changes in marketing technology in the past decade because it shifts control of the customer database from IT to the marketers. That’s hugely important because IT could never keep up with marketing’s needs, while marketing at least has a chance of keeping up with itself.”
So, hold on to your hat and start thinking about how best to deliver true data-driven marketing for your organization. While some are custom building event stream data warehouse applications that look and act like CDPs, there are number of commercial products that are helping to drive the market. These tools include RedPoint, BlueConic Ensighten, Tealium, and many others. The above are generally cloud-based solutions requiring minimal upfront investment and recurring fees based on the number of identifiable profiles.
If you are interested in exploring a CDP program, we suggest asking yourself the following four questions:
- What resources does my organization have available to support a new piece of marketing technology?
- What is the current state of our digital technology ecosystem (website, marketing automation, CRM, etc.)?
- How much prospect and customer data from both online and offline sources is currently captured and accessible?
- How quickly do we need to deliver a positive ROI on the investment?
Regardless of your answers, a CDP solution can be right-sized to your needs and should be able to deliver tangible value to the organization in a few months. Please reach out to us if you have any more questions around navigating the CDP landscape. We are humans, and we routinely answer emails and phone calls.