We’ve all probably interacted with a brand in a few different ways before buying their product: first an Instagram ad, then their e-commerce website, and maybe a conversation with a sales rep.
If you’re the brand in this scenario, each of those touchpoints offers valuable data about customer behaviour and intent. The only problem is compiling all of that information — data from multiple sources — into a cohesive and useful format.
Enter the customer data platform (CDP), a tool that can boost your conversions and make your marketing more productive. Confused? Don’t worry.
By the end of this 10-minute guide, you’ll know everything you need. Let’s go:
What Is A Customer Data Platform (CDP)?
A customer data platform (CDP) is software that collects and structures customer data across various touchpoints, channels, and other software involved in a firm’s marketing activities. That includes email, social media analytics, customer relationship management (CRM) software, eCommerce channels, and more.
Customer data platforms collect information from both online and offline channels:
- First-party sources: First-party data comes directly from the customer — it also makes up the bulk of the information your CDP aggregates. Examples include CRM software, email channels, customer behaviour on your website, social media interactions, transactional and purchase data, and survey results.
- Second-party sources: The key factor separating it from first-party data is that you don’t collect it; second-party data comes from a trusted source. If you sell a hardware product, your retailers might provide you with information about customers in their eCommerce stores and physical locations — this is second-party information.
- Third-party sources: Data collected by a third party is even further removed from your target audience. Typically, you buy it from a data aggregator that gathers information from several other sources into one big dataset. Since it’s sold at scale and non-exclusive, your competitors have access to the same data.
A customer data platform will integrate with these sources, compiling the information into a comprehensive package. The end result creates a persistent, unified customer database that is accessible to your other marketing systems. In turn, they can use it to enhance and manage interactions with customers.
What Does A CDP Do?
There are several CDP options available on the market today. Before you invest in one, you should know the core features needed in any customer data platform:
- Unifying online and offline data into a singular database
- Customer data management
- Customer segmentation and automation
Let’s explore each one:
Unifying online and offline data
To even qualify as a CDP, your software needs to collect data from every touchpoint your customers interact with — social media, your website, email, etc. Then, it needs to compile that information into a singular view of the customer — a process called identity resolution. These customer profiles need to be updated constantly to keep up with your customers’ behaviours.
Customer data management
Data security, privacy, and consent are more important than ever — a CDP ensures your customers’ details are kept safe and organized. Since your CDP centralizes their information, you’ll have an easier time managing your customers’ data preferences, consent attributes, and more.
Customer segmentation and marketing automation
A CDP is most useful when you leverage it for marketing purposes — A/B testing, campaign analytics, automation, outreach; the list goes on. That’s why your customer data platform should connect to your other marketing systems as well: social media channels, content planning, customer personalization, lookalike advertising, etc.
Most importantly, you can use your CDP database to segment your customers on any number of traits: their propensity for taking advantage of discounts, their preferred social media channels, their stage in the customer lifecycle, lifetime value predictions, and beyond.
What Exactly Is Customer Data?
We’ve been talking a lot about customer data, but what does that look like exactly? In your CDP, you’re probably going to encounter these four types of data:
- Customer-specific identity data
- Descriptive data
- Behavioural data
- Qualitative data
For the sake of example, let's pretend we sell high-end women’s fitness apparel and we’re looking at one specific customer.
Customer-specific identity data
As your CDP builds out its customer profile, identity data serves as the base. This kind of data is essential for identity resolution and ensures you don’t spend marketing dollars on duplicates:
- First and last names
- Age, gender, and location
- Social media and contact information
- Account IDs and numbers
For our customer example, we might be interested in their name, age, gender, and location:
- Name: Sally Shortcake
- Age: 34
- Gender: Female
- Location: Vancouver, BC
There’s potential here, but let’s dig deeper.
Descriptive data
To tailor your marketing campaigns effectively, you’ll need more than just identity data. Descriptive data gives a fuller picture of who the customer is beyond the basics. As a marketer, you may be interested in the customers’:
- Style of home or vehicle
- Income or employment level
- Marital status and family size
- Lifestyle and hobby memberships
For our brand specifically, maybe we’re most interested in income level and hobbies:
- Income level: between $60,000 and $89,999
- Gym membership: Yes
A high-earning gym-goer is the perfect audience, but what more can we learn?
Behavioural data
Quantitative behavioural data is the key to getting a 360-degree customer profile. This kind of data comes from the interactions that customers have had with your brand:
- Transactional data, including past purchases, abandoned carts, recency/frequency/monetary value analysis (RFM), etc.
- Digital activity, including website visits, clickthrough rates (CTRs), social media interactions.
- Email data, including open rates, responses, and CTRs.
In Sarah’s case, you might see monthly visits to your website, 80% email open rates, and average order values of $85. (Yes, Sarah is a marketer’s dream come true).
Qualitative data
As you get even more granular with your customer view, your CDP may include qualitative data:
- Opinions, reviews, and product ratings
- Preference and attitude data
This kind of information can help determine how likely your customers are to refer their friends, why they chose your brand over others, etc. Maybe Sarah’s data shows that she’s reviewed every product she’s purchased and given them all over five stars.
Given what we know, Sarah will likely end up in a high-income urban segment with strong promoter scores. As a marketer, you might develop an email marketing campaign that offers a BOGO sale to anyone who refers a friend to your brand.
CDP vs. CRM vs. DMP
The world of marketing is filled with many (maybe too many) acronyms. Since CRMs and DMPs (a data management platform) deal with similar concepts, it’s easy to get them mixed up. Here’s how they differ:
CDP vs. CRM
- Anonymity: CDPs can collect data on people engaging with your touchpoints anonymously. CRMs track known and potential customers in the sales pipeline.
- Marketing: CDPs are designed to track lifetime customer behaviour on the marketing flywheel. A CRM’s primary purpose is to track sales.
- Data sources: A CDP will collect all sorts of data from offline and online sources. A CRM is unable to track data from offline sources unless someone is manually involved.
But remember how CDPs collect data from multiple sources? One of them can be your CRM!
CDP vs. DMP
- Marketing: CMPs help with various marketing-related activities. DMPs are specifically used for advertising.
- Data sources: Most of the information in a CDP is first-party data, whereas DMPs need to rely on third-party data.
- Anonymity: CDPs collect information on anonymous and known customers or visitors. DMPs mainly deal with anonymous identifiers like cookies.
- Length: Your CDP builds an in-depth view of the customer over the long term. DMPs are specialized for short-term ad targeting.
The Benefits Of A CDP
We’ve learned a lot about customer data platforms. Now, let’s bring it all back to the main reason we’re here: why on Earth do you need one? Here are just a few reasons:
- First-party datapoints
- No more data silos
- Customer profiles
- Unified marketing efforts
First-party datapoints
As a marketer, you have a myriad of options when it comes to customer data. But the information that comes directly from the customer? That takes the cake. Your CDP collects first-party data through advertising pixels and digital tracking services. As a result, your audience information stays up to date.
This means you can count on accurate, relevant, and exclusive data as you build out high-conversion marketing campaigns.
No more data silos
Data is often siloed (or isolated) between departments. Marketing teams, for instance, may not always have access to the same information as IT teams. Siloed data is counterproductive: it slows down collaboration, hinders performance, and it might mean you’re paying extra for duplicate data.
A CDP unifies all the information into a central location that all teams can access. That way, you can make your pipelines more efficient and collaborative at the same time.
Customer profiles
Understanding your customers isn’t just a marketing objective — it’s a business imperative. A CDP lets you generate customer profile views, build out identity graphs, and do in-depth behavioural research. Your audience should always be at the center of your marketing efforts, and CDPs make it easy.
Unified marketing efforts
Translating data and analytics across different marketing channels is a confusing and lengthy endeavour. Roadblock questions you may run into:
- What data do you collect?
- What benchmarks do you measure against?
- Where do you aggregate data from?
CDPs make the process seamless. Your multi-channel marketing campaigns now have a centralized and consolidated source of reliable customer data. The result? Greater productivity, better campaigns.
Customer Data Platforms You Should Know About
Twilio Segment
Twilio recently acquired popular customer data platform Segment in a deal worth more than $3 billion. Their clients number in the thousands and include familiar names like FOX, Instacart, and Levi’s. Segment offers everything you could ask for in a customer data platform, and then some. For example, their Personas product can synthesize user history from different channels and devices into a unified customer view.
Emarsys
Emarsys includes a CDP as part of its greater customer engagement toolkit. Like Twilio Segment, Emarsys generates unified customer profiles for use across different platforms. The platform also uses AI and historical customer data to predict purchase probability and product affinity. As a Shopify Plus partner, Emarsys is an excellent choice for e-commerce brands.
Bloomreach Exponea
Customer data platform Exponea was also acquired by another company (Bloomreach) in a deal in early 2021. Bloomreach offers Exponea’s CDP in three tiers: CDP only, a CDP + marketing campaign toolkit, and an all-inclusive customer engagement platform. Their core offering is to combine best-in-class CDP capabilities with omnichannel marketing automation — a sell that 25% of US and UK eCommerce stores have bought.
Optimove
Optimove offers a suite of technology tools for multi-channel marketing. At the core of the stack, you’ll find a CDP that lets you build, track, and tailor personalized marketing campaigns. The platform also excels at discovering engagement opportunities to convert potential customers. Optimove:
Can help solve prioritization and execution problems with its real-time decisions engine.
Offers AI campaign optimization.
Has hundreds of ways to segment your customer data.
Insider
Insider is another popular growth management platform whose CDP covers all the bases; unified customer profiles, segmentation based on over 120 attributes, and integrations with Segment, Shopify, Tealium, and more. Segmentation can get highly granular with Insider if you use their rule engine to write custom parameters. Insider also offers intelligent segments based on lifecycle stage, affinity for discounts, purchase probability — you name it.
Adobe Real-time CDP
Adobe’s Real-time CDP is a marketing cloud CDP, meaning it’s built specifically for teams using the Adobe suite of business tech tools already. Real-time CDP integrates seamlessly with other products in the Adobe Experience Cloud, like Adobe Analytics, Campaign, and Audience Manager. It also has everything you’d need in a CDP: real-time customer event responses, in-depth privacy controls, and connections to non-Adobe platforms too.
Salesforce CDP
Salesforce owns about 20% of the CRM market, so there’s a pretty good chance your team uses the Salesforce Marketing Cloud. Like Adobe’s Real-time platform, Salesforce CDP is an add-on to the company’s suite of Marketing Cloud products, so it connects to Salesforce CRM, Email Studio, Social Studio, and more with ease. Salesforce CDP also offers granular audience segmentation, AI-powered analytics, and common identity resolution.
SAP Customer Data Platform
SAP has always been a reliable source of marketing and business tools — it’s no surprise they also offer a customer data platform. Their CDP is best suited for teams already within the SAP ecosystem as it was initially built with other SAP products in mind. SAP’s platform helps with data compliance, omnichannel engagement, and real-time data activation.
Oracle Unity CDP
Oracle’s Unity CDP is part of the Oracle Marketing suite of products, both for B2C and B2B marketing. Unity is a great option for teams entrenched in the Oracle ecosystem — the platform features configurable data architectures, pre-built smart attributes for customer profiles, and 80+ behavioural scores (like engagement and churn probability, just to name a few).
Microsoft Dynamics 365 Customer Insights
This one’s a mouthful. Microsoft Dynamics is one of the younger marketing clouds on this list, but they’ve made a splash with Customer Insights, their own CDP. CI checks off all the boxes: centralized customer profiles, cross-channel insights and reports, real-time analytics, and intelligent attribute prediction (churn, LTV, etc). CI also comes with customizable machine learning models if you want to tailor your CDP to perfection.
Start Using A Customer Data Platform Today
You see higher conversions, greater productivity, and happier buyers when you put your customers at the center of your marketing efforts. The easiest way to get there? Start using a CDP. With a customer data platform, you can:
Focus on customer-generated data
Break down data silos
Understand your audience better
Streamline your marketing activities
Our advice is simple: get started ASAP and watch your campaigns flourish. If you want to make sure you’re using your CDP software to its full potential, Portage Labs can help — get in touch today!
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