If you’re like most people in the business world, you’ve probably been hearing a lot lately about customer data platforms (CDPs). With this much hype, it can be difficult to differentiate between key functionalities that you need for your business and the exciting buzzwords that attract attention but don’t add much business value. So where should you start?
What’s a Customer Data Platform (CDP)?
Let’s start with the basics. CDPs have found an important place in the modern data ecosystems because they centralize customer first-party data from across your various customer touchpoints. They’re focused on providing a full 360-degree view of your customer so that you can engage with them in the right ways.
Simply put, a CDP does the following:
- Aggregates all your first-party customer data from various sources
- Integrates the data to tell a singular customer journey
- Enriches the story by creating meaningful classifications and potentially
importing external sources
- Allows you to operationalize what you know about your customers in meaningful and highly monetizable ways while providing true digital experience optimization
What CDP Functionality Should I Focus On?
Now that we’ve gone over the basics, let’s delve into how you can evaluate the capabilities of CDP technology to ensure that it fits the needs of your business.
One of the key areas in which a CDP should thrive is easily connecting to varied data platforms for the import of data. These could be called “connectors,” “integrations,” or “partners,” but what it really means is that the CDP has developed an efficient and secure pipeline to allow you to import the data you have into the centralized system.
The best CDPs have hundreds or thousands of these integrations, which can reduce the time to deployment by weeks or months, and can significantly decrease the potential liability which often arise from homebrew aggregation solutions.
Once the data is aggregated, it’s vital to identify like users across the various data streams so that you can tell the complete story of your customers. This can be extremely difficult and time consuming, as many data ecosystems will have differing identifiers (ID) for their various access points. App IDs, loyalty cards, email marketing IDs, and web clickstream are some examples of these identifiers.
CDPs should enable integration of customer data across data streams through the practice of customer stitching, which is a process allowing you to use one or many unique identifiers (or keyrings) to connect data for each customer across data sources. The best CDPs can stitch anonymous activity to users when there’s an identifier present and can also back classify anonymous activity that was previously unclassified when any such identifier is provided.
After aggregating and integrating your first-party data, the full customer journey is available and you can begin the high value process of classifying your customers to facilitate customer engagement. There are many types of classifications, including activity based (e.g., repeat visitor), retention based (e.g., churn risk), or preference based (e.g., sports enthusiast) among others.
Badge Based Example: A combination of segments could provide highly directed marketing for Registered Users who Have Placed Orders in the Past have Items in their Cart and are Brand Conscious.
One of the key areas on which CDPs should be evaluated is how it facilitates customer segmentation. The best CDPs provide a robust system for managing simple rules-based segmentation, while many innovators in the space are also employing machine learning functionality to identify clusters for segmenting. While the cutting-edge technology like machine learning can be very useful, the key is to develop the foundation of a robust, rules-based, and combinable segments which can be utilized in highly targeted ways.
Once you have a 360-degree view of your customers and have segments to classify them, you can utilize your customer data in highly monetizable ways. The best CDPs allow you to do this with a wide variety of quality outgoing connectors, such as passing segments to your content management system to personalize assets and optimize your marketing spend or passing segments to your directed marketing systems to send pinpointed engagement to your customers and optimize your limited touchpoints.
Through a variety of outgoing connectors, CDPs can support you with targeting customers and addressing them as individuals instead of peppering them with inconsistent content that can alienate them. Every customer interaction is valuable and must be optimized. CDPs can provide the core functionality to make this possible. Digital experience optimization is no longer optional, and a CDP is quickly becoming a required technology for facilitation.
Every customer interaction is valuable and must be optimized. CDPs can provide the core functionality to make this possible.
Directed Marketing with a CDP
A user is classified as a young adult on a limited budget who is brand conscious. This could tell you that they would likely be a prime target for wish list messaging, annual style upgrades, and clearance deals.
Website Personalization with a CDP
You’re running a cruise line and have integrated your website clickstream data, on-ship activity data, and call center/sales data. Given what you know about your users, you can provide a synergy of messaging based on them, and their interests. For example, a user is classified as a leisure cruise passenger who goes on annual trips and prefers the tropics. Given this knowledge, you would be able to present luxurious experiences in the Caribbean as the hero on the website, while having this messaging echoed via directed marketing and the call center salesreps.
Do you have questions about how to evaluate and select the best CDP for your organization? Blast can help with the process so you can unify your customer data and communicate in a more personalized way.