In our last session, we discussed data ethics and privacy and over the course year, we have discussed how, as users, we are afraid of sharing perhaps too much data on various platforms. While we strive to be aware as users, sharing only as much as is required as marketers, we will quickly lose most access to third-party cookies due to privacy regulations, new privacy protection laws, and growing privacy concerns. That’s why it’s the right time to focus on the data we collect from our customers, which is far more valuable. After significant changes in laws about data collection, sharing, and tracking, the shift towards first-party data has become clear and, so to say, for all the right reasons.
What is CDP?
In my previous post, I explained that a customer data platform (CDP) is a software package that collects and unifies first-party customer data—from multiple sources—to build a single, coherent, complete view of each customer, which we also call SVC. The data collected could be from customers’ interaction with the website, offline interactions with CRM, mobile applications, etc.
The type of data collected could be categorized into;
- Behavioral data: such as action taken on a website, in an app, or through other channels such as live chat or digital assistants, and the number and length of interactions and frequency of those interactions
- Transactional data, such as customer purchases and returns, from eCommerce or POS systems
- Demographic data include the customer’s name, birth date and month, and address.
Why is CDP more crucial than ever?
- Privacy regulations like GDPR have imposed restrictions on third-party tracking and put users’ privacy consent first.
- Apple’s iOS’14+ update has given users a choice to opt out of tracking.
- And the Chrome browser plan to phase out third-party tracking by 2023.
Third-party data has been a powerful tool for marketers across industries and borders. Now that this tool is all but finished, it’s time to pivot our strategy by optimizing the collection of first-party data and turning them into actionable insights. Thankfully, first-party data is turning out to be even more powerful (and far more ethical) than third-party data. The sooner the marketers leverage the firsthand customer data today to build better connections with their customers, the better the market segmentation and marketing campaigns will be.
How does a customer data platform (CDP) work?
A CDP’s job is to collect lots of data about your customers, create unified, individual profiles of those customers, and deliver effective, personalized communication to them across all channels. To make that profile, a CDP has to gather a lot of information about the user. A perfect or close-to-perfect customer profile will then be used as the foundation to find similar “perfect customers,” hence facilitating a lookalike audience segment. With the correct data, baselines, and algorithms, marketers can extend their audience and match that new group to their “perfect” customer. Marketers can continue to build on that foundation, find more prospective customers, expand their reach and make their campaigns more personalized to their target audience.
Why is CDP important for marketers?
By creating and maintaining a single, unified database of customer profiles, each with a consistent identifier, CDPs provide a single view of every customer and a reliable data source for various marketing functions. They connect with other marketing platforms and systems, providing data to support campaign management, marketing analysis, and business intelligence. The study of this data can even suggest the optimum next move the company should make to engage or retain a customer.
Because it’s designed for marketing and controlled by marketing, a CDP makes it easier and faster for nontechnical people, like some marketers, to access and query the data. Marketing owns the data, so it doesn’t have to request it from the IT department, which can be a slow process.
What are the other benefits of CDP?
- Deliver a Single View of the Customer- CDPs unify first and third-party data sources to form a comprehensive 360-view of your customer across devices and channels, making that data available to your other tech and the business.
- Enhances customer experience (CX)- Customers are using more channels and devices than ever while demanding exceptional and relevant experiences. CDPs fuel multi- and cross-channel marketing with comprehensive, trusted data and a complete customer data set.
- Breaks data silos- The value of customer data extends across a business. CDPs allow teams to access and leverage customer data across departments accurately and effectively.
- Step closer to customer-centric marketing- To enact customer-centered marketing, you must know your customers. CDPs equip you to manage customer relationships and market with your audience.
- Ensure business & operational agility– CDPs enable businesses to build and connect a tech stack that adapts to the ever-changing consumer behavior with turnkey integrations, saving hours of integration work. Audiences and business rules are set up centrally and can be applied across various technologies saving vast amounts of time and money.
Unifying customer data from different marketing and advertising systems is the only way brands will be able to eliminate blind spots and make every customer interaction matter.
Rob TarkoffExecutive Vice President, Oracle Cloud CX and Oracle Data Cloud
- July 2020, Jason Skelton Examining various use cases for a CDP,Examining Various Use Cases for a CDP – Acxiom
- May 2020, Tisson Mathew, What is CDP? What is a Customer Data Platform (CDP)? (skypointcloud.com)
- Microsoft Dynamics What is CDP What Is a CDP | Microsoft Dynamics 365
- Image Credit Google images