Customer data platforms are the new trend
Why should you care about Customer Data Platforms?
To understand why you need to care about customer data platforms, just imagine you’re part of the marketing team for a national chain of restaurants that provide a delivery service. You track footfall. Customers use your website and app to get offers and place orders. You run ad campaigns across social media and in the app stores. And you send out regular emails and newsletters to your customer base.
The volume and speed of data that these interactions provide, both online and offline, is rising exponentially. And if captured and used wisely, this data can help guide your strategy and underpin your growth.
But how do you manage such huge amounts of information, and make it work for you? Over the last couple of years, we’ve seen a significant shift to customer data platforms (CDPs) as organizations of all sizes strive to develop a data-led understanding of customers, in order to deliver exceptional products and services.
What are Customer Data Platforms
A CDP is software that collects customer data from multiple sources – perhaps location data from apps, purchase data from websites, click-throughs on emails, and engagement on social media – and organizes it all into a single, unified view of the customer.
This profile is accessible to all teams across an organization, as well as other systems such as Apple Search Ads.
Customer data platforms are a strong addition to your martech stack, but why has there been such a significant shift towards them? Let’s take a closer look.
What's driving the trends toward CDPs?
1. Accelerated Digital Transformation
There’s no doubt that the pandemic accelerated digital transformation for all kinds of businesses. In fact, reports show that organizations made a whopping five years of progress in just eight weeks as they found new ways of engaging with customers.
While these were largely quick fixes, the digital-first approach is now embedded into company cultures and customer expectations. And more digital interactions lead to more data. By storing it all in a single database, Customer data platforms give you an easier way to organize and manage it all, helping you maximize its value.
2. Greater focus on capitalizing on data and Customer Data Platforms
Unified data packs a punch. When your data is also in real-time, as it is with a CDP, this impact is magnified.
You can see trends forming, helping you navigate shifts in audience behavior. You can capitalize on special occasions and seasonal events. With up-to-the-minute and relevant insights, you’re better able to respond to change as it happens and make sure you stay one step ahead.
3. Loss of third-party data
With access to third-party data being phased out, organizations are having to improve the way they capture and use first-party data. CDPs build up a complete profile using data from multiple sources, giving you enough information to track users’ journeys across channels and touchpoints. And because it’s first-party data, you’ll have consent to use and store it.
We expect to see a quid pro quo between apps and their audiences: users are likely to give permission to use and share their data in exchange for quality content. It will be a relationship that relies on trust – which leads us to our next point.
4. A need for authenticity
Once users have willingly shared their details, you need to deliver on the expectation that they’ll get something of value in return. With a greater understanding of your customers, provided by the Customer Data Platform, you can create content that ticks the boxes and strengthens your customer relationships.
Customers also want to know that you’ll safeguard their details and use them ethically. A CDP will store all the opt-ins and opt-outs, as well as contact and channel preferences – and any changes will be updated immediately within the customer profile.
How does a Customer Data Platform support app marketers
So just how is a CDP going to help improve your CPI? You’ll be able to:
Capture more data: By adding new data sources quickly and easily, you’ll get a deeper understanding of your customers.
Anticipate trends: With detailed records of customers’ behavior, past and present, you can predict their next steps and plan your campaigns to meet them there.
Comply with regulations: There’s no risk to your reputation: you’ll have up-to-date preferences for using first-party data, all stored in one place.
Measure impact: See which of your campaigns is hitting the mark, by reliably assessing your content and advertising in real-time, and adjusting it as needed.
Challenges of Customer Data Platforms
We see a lot of interest in CDPs from scale-ups: by definition, high-growth companies. These are generally young organizations that don’t have unwieldy legacy systems to take into account. Their focus is on growing fast, and they’re primed to make that happen.
Larger, or older, enterprises have more of a challenge. They’ll often have to work around complex legacy systems and persuade a wider range of stakeholders to take the leap to something new. It can also be hard to pin down exactly what’s needed from a Customer Data Platform and choose the right type from the range that’s on offer.
What can we expect from Customer Data Platforms in the future
At CMA, we believe data-led insight is the only way to fully understand the customer journey, and deliver the kind of customer experience that attracts new users and keeps them engaged.
As CDPs move into the mainstream, we expect to see more established companies moving over to them. Their benefits will become more apparent, and the number of case studies will grow as organizations successfully implement CDPs and build evidence of their worth.
For now, the most important thing is to make sure you get the CDP that suits your business. With greater control of your data and a deeper understanding of your customers, there’ll be no limit to what your organization can achieve.