Customer Data Platforms: What Every Business Owner Needs to Know About CDPs

DETROIT – Customer Data Platforms (CDPs) are software that use information from other systems, software, and marketing efforts to aggregate and organize customer data. They have become an increasingly popular marketing technology platform used by marketers to collect, sort, store and analyze customer data. Ultimately, they create a comprehensive view of customers and make sense of lots of customer data.

CDPs obtain real-time information (customer data) from first, second and third-party sources such as transactional systems, emails, social media activity, web forms, e-commerce behavioral data, CRMs, DMPs and websites. After collecting this data, CDPs structure it into individual, centralized customer profiles. CDPs collect four main types of data. They are:

  • Descriptive data: This includes information about careers, families, hobbies (e.g. gym memberships and magazine subscriptions) and lifestyles (e.g. types of pets, vehicles and homes) of customers.
  • Identity data: It is the basis of the identity (profile) of each client. It includes details such as names, locations, contact details, occupation, demographics (e.g. gender and age), social media information, account numbers and user IDs company specific.
  • Qualitative data: This type of data adds personality to customer profiles. They include details about customers’ motivations, attitudes and opinions. Usually, this information is obtained from people’s answers to questions such as “why did you buy this product?” “, ” How did you hear about us ? and “How likely are you to recommend us?”
  • Quantitative data: This type of data gathers behavioral information of customers based on their transactions, actions and reactions. It includes transaction information such as order dates, number of abandoned carts, types of items purchased, email communication behaviors, and online activity details (such as views of products, social media engagement and product views)

Some companies purchase and use CDPs from vendors. However, many brands prefer to create their own CDPs from their own Cloud Data Warehouses (CDWs). This option is more profitable and allows brands to have customer data platforms. It also gives businesses flexibility, control over their data, and privacy.

If you decide to purchase a standard CDP, it is best to first identify its proposed uses based on your marketing and business needs before selecting a vendor. This is because different CDP vendors have their own strengths that are better for some specific uses than others. Some criteria to consider before choosing a CDP provider are whether you need your CDP for web personalization, targeted social campaigns, email segmentation, programmatic ad optimization, or web personalization. CDPs offer many advantages to companies. They understand:

1. Better understanding of customer behaviors

CDPs are a powerful platform for customer analysis. They enable businesses to have more insightful customer analytics to better understand customer behaviors and make decisions about sales, marketing, and product development.

Since CDPs allow you to create unified customer profiles, you’ll better understand your customer journeys and discover how to reach them with new effective strategies. As a result, your business will have a better chance of improving customer loyalty and retention.

2. Organized data management

CDPs make it easier to acquire, organize, and use customer data. Once the data is organized, it becomes much easier to maintain. And you can equip your CDP with the ability to activate customer data through automation and artificial intelligence, saving you a lot of time and money.

Generally, before acquiring a CDP for your business, it is best to verify the current state of your data to ensure seamless unification with a CDP. Identify your data usage and optimize standardization and access to your data.

3. Plan for the future

CDPs connect various groups of data that can help businesses predict market trends and customer behavior. With this data, you can create new, high-quality audience segments and make real-time marketing campaign decisions to help you stay ahead of the competition. For example, if a CDP uses a buyer’s purchase history to predict their future buying habits, you can prepare an appropriate message to meet them at the right time, when they are most likely to buy. .

Such smart targeting can lead to increased customer satisfaction, higher conversion rates and revenue. Also, it will be much easier to gain insight into the performance of your previous marketing campaigns and improve your future efforts.

4. Deliver personalized customer experiences

Personalized customer experiences involve the development of services, products and interactions to meet the unique individual needs of customers. Personalization is a brand differentiator that sets you apart from the competition. With CDPs, there is more data and the ability to define your personalization strategies and launch relevant and personalized campaigns for your customers.

This article was contributed by Khazen Ali

About Byron G. Fazio

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