What is a Customer Data Platform? And Why do you need one?

What happens when you decide to purchase a new mobile phone for yourself?

You go on google & or any eCommerce website and start your research. What happens next?

You start seeing relevant ads for mobile phones from different companies. Your Instagram, Facebook, Youtube feeds are filled with these ads.

Additionally, you might visit an electronics shop to compare mobile phones or might go to multiple different websites to compare price, features, reviews etc.

What is all of this? These are the different interactions you have with a brand. You might notice that each of these interactions was relevant to you. When you left your purchase in the cart, the email follow-up was crafted just to remind you to complete the purchase, the ads were suited to your budget range and the website recommendations catered exactly to your needs.

The magic wand behind all of this is a Customer Data Platform that stores all of these interactions & data points to make marketing relevant to you. 

What is a customer data platform & why do you need one? 

A customer data platform or CDP is a tool used by marketers to consolidate & organize customer data from multiple touch points through which a customer interacts with a brand. A CDP not only collects real-time data into the database but also filters out and organizes this data to generate useful information about a customer. Data aggregated in a CDP can include the following: 

• Transactional data about past purchases
• Browsing history
• Demographic data
• Behavioral data
• Event data (clicks and file downloads, etc.)
• Data about product usage
• Partner and third-party data (optional)

Now, let us see how a CDP makes this all possible!

What does a CDP do? 

Data Collection: A CDP collects real-time data from various touch points in marketing such as Facebook, Instagram, website, webchat, email, or any other place through which a customer may interact with the company. 

Data Consolidation: It then consolidates all these data points and creates a single view/profile for every customer in order to build a deeper customer understanding.

Data Segmentation: A CDP also enables one to segment your customer data based on different customer personas such as location, shopping habits, age, gender, cart status, and so on. 

How does a CDP benefit brands? 8 use cases of customer data platforms

Now comes the interesting part. How exactly does a CDP benefit a brand?

Here are 8 different use cases that showcase how CDP can be used to increase customer engagement and enhance lead conversions. 

#1 Unifying data from different sources: A CDP’s function is to integrate data from different places and combine them in a centralized location. These sources could be first-party behavioral data, second-party partner data, third-party audience persona data, CRM data, next best offer (NBO) data, and any other customer data touchpoints. 

#2 Generate reports & insights: A CDP can be used to generate reports and seek in-depth insights about customers, their behavior, shopping preferences, transactional data, and much more. This data can be retrieved and studied further to generate effective marketing campaigns. 

#3 Personalized shopping experience: With a CDP, a brand can better understand their customers & segment their customers based on that understanding to run more personalized and relevant marketing campaigns.

#4 Enhanced customer satisfaction: A personalized shopping experience is directly linked to customer satisfaction and that’s what you can achieve from having a CDP in place. Stats say, Brands with the right Customer Data Platform can drive a 9X increase in customer satisfaction along with a  average 2.9X increase in annual growth

#5 Save time and money: A CDP fully automates your marketing. For instance, based on the shopping history of different shoppers, a CDP can predict whether a particular shopper will buy anything in recent times or not. If not, then you can use suitable targeted messaging for such shoppers and entice them to take a look at your products again. This means more chances of conversion with minimal time wastage. 

#6 Provide better customer service: Customer service can be a real game changer when it comes to shopping. A message/call sent out to a customer at the right time can make the magic happen. With a CDP, one can easily share the data about a customer such as their last interaction with the brand or their current issue with the customer support team and they can immediately take action. 

‍#7 Cross-sell And Upsell Intelligently: Cross-selling & up-selling  is another great way to encourage people to buy more from your brand. By having the right insights for your customers through a CDP, you can showcase to your customer a variety of products that complement what they have bought from you or what they are looking for.

For example, if a customer buys cushion covers, the related products could be sofa covers, table mats, rugs, etc. 

A Customer Data Platform is the to understanding your customers!

A Customer data platform that gives you all the required information about a customer is what every marketer needs today. 

A CDP can not only help you consolidate all the relevant customer data from different marketing touch points but it can also help you derive meaningful insights from it. 

If you’re ready to take the next step toward understanding your customers & providing a seamless shopping experience to your customers, a CDP might be the perfect tool for you.