Marketing September 13, 2017 Last updated September 9th, 2017 1,969 Reads share

What Is a Customer Data Platform and Do You Need One?

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The more you know about your customers, the better you can understand their needs. More importantly, meet these needs with relevant, timely messages. Having access to more data also enables you to personalise messages and campaigns. A Customer Data Platform enables you to move away from the old and ineffective ‘one-size-fits-all’ approach to marketing, towards tailored, one-to-one engagement.

As marketer know, achieving one-to-one engagement is not easy. The problem isn’t a shortage of customer data – far from it. Data streams in from websites, CRM systems, email, point of sale, social media, mobile apps and more. Factor in that customers have multiple devices all creating data, too, and you realise marketers are swamped by the stuff. More pressing is making sense of all the data and putting it to use.

The most significant problem is thanks to the silos of data that these channels creates. Each one contains a different fragment of information to help you improve your marketing – but it’s challenging to piece them together into something useful, as none of these channels talk to one another.

Then there is the issue that each of silo containing data in different formats. For example, an email might be linked to a Jim Smith, living at 1 High St, Bmouth. Is this James D. Smith, at 1 High Street, Bournemouth as he appears in your purchase data? Is he Jimmy Smith who uses your mobile app? Are they different people, or the same person? You probably don’t want to wait until you have repeatedly sent him three emails and he unsubscribes out of frustration. Or after you’ve sent three times as many expensive direct mail messages as you needed to. If you’ve got tens of thousands of customers, this fragmented data means inefficiency and unnecessary expense.

The Single Customer View

Businesses have tried for years to find a solution to this problem; to bring this disparate data into a single, readily accessible location. One answer was the introduction of data lakes or data warehouses, but these only solved half the problem. While they did indeed create a single location for business data, it was all the data, enterprise wide. Mostly in the format it was collected. Great for analysis, but not for the marketing department or marketers to use. Nor do they link customer identities, or refresh the data often enough to ensure it is accurate.

Single Customer View

What marketers need is a complete customer record that links and merges fragmented data, from all the relevant marketing data silos: a Single Customer View. With a Single Customer View, marketers have an accurate understanding of each customer. This means the ability to make more informed decisions and treat customers the same across all of your marketing channels.

Unified Database Options

There are several different approaches to creating what some deem a ‘Single Customer View’, yet they have their drawbacks. A data hub, for example, makes the discovery and indexing of data easier by enabling a connection between silos. But the chances of every database that feeds into it being accurate is unlikely as it does incorporate identity resolution.

Marketing clouds, while able to unify data, are often built up of multiple different systems that are unlikely to be as joined as you’d like. This can hinder analysis and means a cloud does not always play well with other external systems. Nor does it adapt when new ones are introduced or removed.

The ideal solution is not only one that will consolidate data sources into a single customer database, but will make the data fit for purpose (as in, for marketing), then make it visible to external tools, such as campaign automation, email, business intelligence tools, ecommerce platforms, etc.

The Rise of the Customer Data Platform

This, essentially, has described the Customer Data Platform, a new breed of marketing technology creating a buzz in the marketing world. Yet while different Customer Data Platforms have many different functions (such as campaign management, predictive modelling and so on), they share four core features.

These components make Customer Data Platforms ideal for knowing more about customers and leveraging data in marketing strategies because they:

  • Are designed to be controlled and used by marketing
  • Can collect data from different sources
  • Standardise and transform the data
  • Make the data visible to marketing apps

Let’s get the first point out of the way; that CDPs are “marketer controlled”. While this is contentious (suggesting IT is muscled out), the consensus among vendors is that CDPs allow customer data to be accessed and used by marketers in ways that other data storage solutions cannot.

The second two points cover the creation of a Single Customer View. This means unifying disparate data sources, but also matching and merging customer records, removing duplicates and errors by resolving customer identities across touch points. Importantly, these ‘golden records’ are persistently maintained, meaning they are continually updated as new customer behaviour data loops back in.

The final point is what makes CDPs more flexible and future-proof than some other solutions. Namely, that they make golden records visible to any number of external systems. For example, a range of in-built tools that are part of the CDP, or third party connectors. CDPs can supply the data to build campaigns and models; for real-time personalisation on web and mobile; and manage the customer profile database used for creating campaigns, sending emails and display ads.

How a Customer Data Platform Can Help

For marketers looking to understand more about their customers and treat them to a personal experience, a CDP helps in many ways. It enables the delivery of consistent customer experiences across all touch points, rather than just one at an isolated moment. It provides the ability to accurately segment your customer base, and support the insight to drive highly targeted messages.

Some have feared that Customer Data Platforms are just another of many marketing technology acronyms. Many suggest they are unfounded hype. However, as an industry expected to be worth $1bn by 2019, this shows that an increasing number of businesses have woken up to their benefit.

Anthony Botibol

Anthony Botibol

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