WHAT ARE CUSTOMER DATA PLATFORMS
Customer Data Platforms enable businesses to collect and manage customer data from various sources and channels, consolidate it into a single, unified profile, housed in a secure and privacy-compliant environment, and activate it across multiple touchpoints.
The goal of Customer Data Platforms (CDP) is to provide businesses with a holistic view of their customers, facilitating delivery of personalized experiences to their customers, which in turn helps to improve customer engagement and retention. Customer Data Platforms (CDP) help businesses can gain insights into customer behavior, preferences, interests, and needs, which can also help them to optimize their lead generation, user subscription, and customer acquisition efforts.
In this article, we'll explore what Customer Data Platforms are, what are some sources of their data, how they work, their benefits, and some use cases.
What are Customer Data Platforms?
A Customer Data Platform (CDP) collects data from various sources such as customer interactions, purchase history, web activity, and social media, email marketing, among others. The data is then consolidated, unified, cleaned, and stored in a single, unified customer profile. This profile can be used to create customer persona(s) and contains a complete view of the customer, including their demographics, behaviors, preferences, interests, purchases, and other relevant information.
CDPs are designed to help businesses create a unified and comprehensive view of their customers, providing them with valuable insights into customer interests, behavior, and preferences. This, in turn, enables businesses to deliver personalized and relevant experiences to their customers across multiple channels, improving customer engagement and loyalty.
How Does a Customer Data Platform Work?
A Customer Data Platform is designed to collect and store customer data from various sources, including online and offline channels, such as websites, social media, mobile apps, and in-store interactions.
There are a Key Features that are typically included in all Customer Data Platforms. These include:
DATA COLLECTION:
CDPs are designed to collect data from a variety of sources, including website analytics, social media platforms, email campaigns, mobile apps, and more.
Customer Data Platforms can be also designed to collect data from various offline sources such as purchase receipts, customer interactions and surveys in stores, feedback from customers, and so much more. Any available customer touchpoint that is available to a business can be used to provide data into Customer Data Platforms, in order to benefit and create a win-win for both customers and businesses. This data is typically collected in real-time, and can be used to create a complete picture of each customer's interactions with a business.
DATA SOURCES FOR CUSTOMER DATA PLATFORMS
A Customer Data Platform can collect data from a wide range of sources, including the sources given below.
First-Party Data: First-party data refers to data that a business collects directly from its customers, such as customer profiles, transaction history, and customer feedback. This data is typically collected through the business’s own websites, mobile apps, and other owned media channels.
Second-Party Data: Second-party data refers to data that is collected by another business or organization, but is shared with the business using a CDP. For example, a business might partner with another business to collect customer data through joint marketing campaigns.
Third-Party Data: Third-party data refers to data that is collected by third-party data providers, such as data brokers, publishers, and social media platforms, and is shared with the business using a CDP. This data can include demographic data, behavioral data, and other types of data that can be used to enrich the customer profile.
It is critical to note here that being in compliance with all Regulatory, Security and Privacy Policies and Rules, Customer PII Data i.e. Personally Identifiable Information (PII) Data is never shared.
DATA INTEGRATION:
Once data is collected from multiple sources, it must be integrated into a single, unified view of the customer. This typically involves some level of data cleaning, normalization, and deduplication in order to ensure that the data is accurate and consistent.
Identity Resolution and Addressability Solutions can also be deployed in this process in order to ensure integrity and accuracy of the data.
DATA CLEANSING AND ENRICHMENT:
Customer Data Platforms use machine learning algorithms to cleanse and enrich customer data by removing duplicates, correcting errors, and filling in missing information. This ensures that the data is accurate and complete, enabling businesses to make more informed decisions.
DATA SEGMENTATION AND PERSONALIZATION:
Once data is integrated, it can be segmented into various categories based on customer behavior, preferences, demographics, interests, purchases, and other factors. This segmentation can be used to create more personalized outreach via brand advertising and marketing campaigns and improve customer engagement.
DATA ANALYSIS - ANALYTICS AND REPORTING:
Customer Data Platforms typically include tools for Data Analysis, including Data Visualization, Modeling and Reporting, and Predictive Analytics. These tools can be used to gain insights into customer behavior, identify patterns and trends, and create more effective marketing campaigns.
DATA ACTIVATION:
The Data Activation process in Customer Data Platforms is a key component of realizing potential benefits of CDPs. It is the process of using the insights gained from the data analysis, data modeling and analytics to deliver personalized experiences to customers across various channels, such as email, social media, websites, and mobile apps. This involves creating targeted and focused marketing campaigns, product recommendations, and many other personalized experiences based on the customer’s individual needs, interests and preferences.
Some common Data Activation techniques used by CDPs include:
Audience Segmentation:
Audience segmentation involves dividing the customer base into groups based on common attributes, such as demographics, psychographics, and behavioral data. Businesses can then target specific groups of customers with personalized messaging and offers.
Cross-Channel Campaigns:
Cross-channel campaigns involve delivering consistent messaging and offers across multiple channels, such as email, social media, and websites. This helps to increase brand recognition, brand awareness, and customer engagement.
Predictive Analytics:
Predictive analytics involves using machine learning algorithms to predict future customer behavior based on historical data. This allows businesses to anticipate customer needs and preferences, and deliver personalized experiences. In this way, businesses can add so much more value to their visitors and customers.
Real-Time Personalization:
Real-time personalization involves delivering personalized experiences to customers in real-time based on their current behavior and context. For example, a customer who is browsing a particular product category on a website might be shown personalized product recommendations based on their browsing history and other customer data.
Benefits of Customer Data Platforms
There are many benefits to businesses using a Customer Data Platform (CDP) and customers as well. Some of the most significant benefits are given below.
IMPROVED CUSTOMER ENGAGEMENT:
By creating a unified view of the customer, businesses can gain a better understanding of customer behavior and preferences, which can be used to create more personalized and effective marketing campaigns. This can lead to higher levels of customer engagement and increased customer loyalty.
INCREASED REVENUE:
By using data to create more targeted marketing campaigns, businesses can increase the effectiveness of their marketing efforts, which can lead to higher levels of sales and revenue.
IMPROVED CUSTOMER EXPERIENCE:
By using customer data to create a more personalized experience for customers, businesses can improve the overall customer experience, which can lead to higher levels of customer satisfaction and loyalty.
BETTER DATA GOVERNANCE:
By using a single platform to manage customer data, businesses can ensure that data is accurate, consistent, and up-to-date, which can improve data governance and reduce the risk of data breaches.
Use Cases for Customer Data Platforms
Customer Data Platforms can be used in a multitude of different ways, depending on the needs of the business. Some of the most common Use Cases are give below.
CUSTOMER SEGMENTATION AND ADVERTISING:
By segmenting customers based on behavior, preferences, demographics, and other factors, businesses can create more targeted marketing campaigns that are more likely to resonate with customers.
PERSONALIZATION:
By using customer data to create personalized experiences for customers, businesses can improve the overall customer experience and increase customer loyalty.
CUSTOMER RETENTION
A CDP can help businesses to identify the most valuable customers based on their lifetime value, purchase history, and other factors. By using this data, businesses can create targeted and specific marketing campaigns and incentives that are designed to attract and retain these high-value customers.
USE CASES FOR BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM
See below.
BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM offers unique capabilities and advantages of a Customer Data Platform combined with our proprietary Big Data Platform.
Accordingly, while the below are specific Use Cases and Benefits of BIRDS EYE BLUE - BIG DATA CDP, they can also be found in Customer Data Platforms in general that offer such capability.
NEW BRAND MESSAGING AND BRAND AWARENESS:
Customer Data Platforms can be a valuable resource for identifying matching customer interests to communicate your brand messaging. This works well in various scenarios for Brand Management including brand recognition, brand awareness, as well as outreach for a new product or brand.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
CROSS-SELLING AND UPSELLING:
By analyzing customer data, businesses can identify opportunities for cross-selling and upselling, which can increase revenue and customer lifetime value.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
RETARGETING:
By retargeting customers who have shown interest in their ads, marketing messages, email marketing, customer service engagement, across all the touchpoints, businesses can identify what customers are specifically interested in. Thus increasing value to customer and business revenue and growth.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
LEAD GENERATION, NEW USERS, INCREASED USER ENGAGEMENT
Customer Data Platform can help businesses identify potential leads based on their behavior across multiple channels, such as website visits, email opens, and social media engagement. This can often result in even more new users, newsletter subscribers, signups for offers, and more user engagement overall. In addition, by analyzing this data, businesses can also create targeted marketing campaigns that are more likely to convert prospects into customers.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
USER SUBSCRIPTIONS
A CDP can help businesses to create personalized experiences for their users based on their interests, preferences, and past behavior such as purchases, subscriptions, readership, brand loyalty. By using this data, businesses can create specific targeted subscription offers and loyalty programs that are tailored to each user, thus adding more value to new and existing customers.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
NEW CUSTOMER ACQUISITION
Customer Data Platforms can help you acquire new customers by identifying high-value segments, personalizing your marketing messages, and optimizing your marketing campaigns. By using these strategies, you can significantly increase your chances of acquiring new customers and growing your business.
Visit BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM to Learn More.
Challenges of Using Customer Data Platforms
DATA PRIVACY AND SECURITY:
With the increasing importance of data privacy and security, businesses must ensure that their customer data is protected and compliant with relevant regulations, such as GDPR and CCPA, and any recent regulatory requirements that come up. This requires careful management of customer data and robust privacy and security measures.
DATA QUALITY:
Customer Data Platforms rely on accurate and complete customer data to deliver insights and enable personalized experiences. However, ensuring data quality can be challenging, particularly when data is sourced from multiple channels and formats.
DATA INTEGRATION:
Integrating data from multiple sources and formats can be complex, particularly when dealing with large volumes of data. Ensuring data integrity, data consistency and accuracy across different sources can also be challenging.
IMPLEMENTATION AND ADOPTION:
Implementing a CDP can be complex and time-consuming, requiring significant investment in technology and resources. Additionally, ensuring adoption and buy-in from all relevant stakeholders can be a challenge, particularly when introducing new processes and tools. Stakeholder education on Customer Data Platforms, and ensuing benefits and value addition to both the customer and the business can be implemented to overcome this challenge.
DATA GOVERNANCE:
Effective Data Governance is critical to the success of a Customer Data Platform. Businesses must ensure that data is managed responsibly, and that policies and procedures are in place to ensure data quality, security, and compliance. Customer Privacy Policies must also be examined in depth to ensure that customers are assured of the complete Data Governance efforts and practices in place and implemented across the organization, and that these are effectively communicated to their customers and offline and online visitors alike.
Top 5 Examples of Customer Data Platforms
Segment: Segment is a leading CDP that enables businesses to collect, unify, and activate customer data from multiple sources. The platform offers a range of tools for data collection, integration, and analysis, as well as advanced segmentation and personalization capabilities.
Tealium: Tealium is a CDP that offers a range of tools for collecting, unifying, and activating customer data. The platform offers advanced data governance and security features, as well as robust analytics and reporting capabilities.
mParticle: mParticle CDP enables customers to combine real-time data quality and governance protections with AI-powered insights and predictions.
Optimizely: Optimizely is a CDP that offers a range of tools for personalizing customer experiences and optimizing digital marketing campaigns. The platform offers advanced analytics and reporting capabilities, as well as advanced segmentation and personalization features.
BlueConic: BlueConic is a CDP that offers a range of tools for collecting, unifying, and activating customer data. The platform offers advanced segmentation and personalization features, as well as robust analytics and reporting capabilities.
Conclusion
Customer Data Platforms offer a range of benefits for businesses looking to manage and unify their customer data. By collecting data from multiple sources and formats, CDPs enable businesses to gain a deeper understanding of their customers’ preferences, behaviors, and needs. This, in turn, enables businesses to deliver personalized experiences, tailored to each customer’s individual needs.
However, implementing and using a CDP can be challenging, particularly when dealing with large volumes of data and complex integration requirements. Ensuring data integrity and data quality, security, and compliance is also critical to the success of a CDP.
Despite these challenges, Customer Data Platforms offer significant value and potential for businesses looking to drive customer engagement, retention, and revenue growth. Customer Data Platforms can provide businesses with a deeper understanding of their customers, which can also help them to optimize their lead generation, user subscription, and customer acquisition efforts.
As the importance of customer data continues to grow, Customer Data Platforms are likely to become an increasingly important tool for businesses looking to stay competitive in a rapidly changing marketplace.
Author:
Reshma Rodricks
Founder and CEO, Birds Eye Blue, Inc.