What is a Customer Data Platform?
Customer Data Platform (CDP) is a database software that creates a unified database for customer data available through an entire multi-departmental organization. It can be considered as a reference centre that connects all the dots – including platforms, channels, and products – that hold customer’s data, to create a single, comprehensive, and up-to-date customer profile.
Does Every Organization need a CDP?
What you want, isn’t always what you need!
In this instance, let’s see how.
One of the crucial factors for judging the success of any investment is its ROI.
The ROI for investing in the CDP will vary from organization to organization, taking into consideration the amount, type, and complexity of the data that is in question. For an organization, if intricately fabricated personalized customer profiles aren’t prominent but an overview of customer details can suffice, the organization may not need to invest in a CDP – at least not yet.
For organizations whose decisions are based on data including customer activity and social experiences or the ones that have marketing campaigns tailored for specific audiences, need to implement the integration of CDP. Data like customer browsing habits, buying behaviour, and in-depth personal details are a basis for Customer Experience Management (CEM) strategies. So, letting this information float by could potentially cause damage to the revenue, while integrating CDP can then be a game-changer.
Factors to Consider Before Choosing a CDP:
Once the decision of integrating a CDP is mapped out, the next question in line would be choosing the right CDP from the plethora of available vendor choices. Even with CDP just being software, its value proposition, the intended method of problem-solving, and user interface dynamism may vary from vendor to vendor. Let’s have a look at some factors that could potentially lead the way:
1. Does its Value Proposition fit into the Expectations Column?
The value proposition of a CDP should fit in the ‘why’ part of buying the CDP solution. The value propositions of a CDP can be a combination of some of these:
Data Privacy Management,
Data Subject Access Request (DSAR),
Real-time Recommendations,
Consent Management Platform (CMP),
Identity Resolution,
E-Commerce Data Integration,
Omnichannel experience,
Data enrichment using AI,
ETL – Extract, transform, load,
and Data Governance.
According to the precise use cases like – understanding customer journey, personalizing CX, or combining offline and online data – an organization can choose a relevant CDP.
2. Ease of setup and use:
A user-friendly platform helps the marketing team and analysts reach a more productive outcome independently while eradicating the need of constant IT support. So, a CDP should offer hassle-free integration with existing solutions like the analytics platform, the data warehouse, tools that the organization uses for advertising, customer success, and BI. Another deciding factor for a CDP should be the support system. A good quality support system aids the ease of usage by answering real-time queries.
3. Product roadmap:
A product roadmap is a visual summary of the strategic execution towards the vision of any product. The product roadmap of the CDP vendor’s organization should align with the goals of the organization for there to be a long-term standing relationship.
‘Customer Data and Experience Platform (CDXP)’ combines artificial intelligence within the CDP. It offers AI-driven marketing automation, real-time analytics, and optimization in UX, marketing, and conversion rates.
4. CDXP or Standalone CDP:
A CDP can either be a CDXP or a Standalone CDP, which is the traditional customer data platform that provides the most common yet imperative features like customer segmentation and identity resolution. Organizations should choose one as per the complexity of their data and their extend of personalization expectations.
5. The trial run:
The demo of any product is a combination of the best marketing minds or an organization trying to showcase the best features of a product. So, instead of going for the demo, organizations should seek a test run of the software using their sample data to better comprehend the potential of the CDP.
6. Real-time insights:
Apart from features like data collection and customer profile building, what is imperative is that the CDP should be able to collect all the data needed for formulating the profiles and insights of the customer within a stipulated time. The most commonly accepted time is under 200 milliseconds. Taking longer than this can slow down the website and thus adversely affect the Customer Experience.
7. Timeliness of real-time insights:
Data can be accumulated using a variety of techniques but converting that customer data into actionable insights is another thing. Curating real-time data-driven insights from unstructured data is something all CDP’s cannot do. But it is imperative that these insights reach the decision-making authorities in time for them to make informed decisions at the moment.
8. Data security:
A CDP will have access to all of your organization’s data. It then becomes imperative that it maintains data hygiene and adheres to the security compliance guidelines set by General Data Protection Regulation (GDPR). Thus, CDP’s should have a valid, independent, and credible security certification which would ensure that the CDP is continuously improving its data security practices.
Conclusion:
Having foresight in a business is everything. A CDP’s ability to predict what the customer will need tomorrow can be leveraged in the decision-making processes of the organization. From the factors mentioned above, most CDP’s tend to have a combination of 2-3. Organizations should choose the combination that fits right into their needs.