Learn what CDPs are, and how they are a key driver of modern customer experience strategy
A customer data platform (CDP) keeps track of the key customer data you need to gain deeper understanding of you customers’ life cycle; where they come from, what interactions guide them to becoming customers, and what leads them to deepen their investment & relationship with your business. The Customer Data Platform Institute (CDPI) defines a CDP as "packaged software that creates a persistent, unified customer database that is accessible to other systems.” Put another way, customer data platform can help you learn more about your customer.
The CDPI has developed a RealCDP certification program that outlines five defining capabilities of a CDP:
CDPs help unify customer data to make marketing efforts more effective. An intelligent, holistic view of your customer can help you make customer interactions, communications and engagements more relevant.
Many CDPs now feature more advanced capabilities such as governance and continuous analytics. A CDP makes it easy for you to combine a trusted customer profile and add intelligence from internal, external and third-party sources.
A CDP makes the data easy to access for a variety of uses. These can include deep analytics, marketing activation and broader customer experience initiatives. You can then share that trusted data with other systems and processes. You can also use that data to inform marketing segmentation, personalization and next best actions.
Here are a few things you can do with an enterprise CDP:
The roots of CDPs extend back to the early CRMs of the 1990s. These tools helped organizations keep track of information about their known customers. In the 2000s, the volume of digital interactions and data led to data management platforms (DMPs) in AdTech. With DMPs, organizations could enrich their data with third-party sources. They could then create customer models based on unknown customers to inform and drive digital ad campaigns.
CDPs emerged in the mid-2010s as a way to combine both customer (CRM) and context (DMP). These single-solution tools offer multichannel campaign management, tag management and data integration.
But CDPs have moved beyond marketing in the modern enterprise. They are starting to extend into areas such as service, sales and product data. Offering an ideal mix of customer and context, CDPs can be used with systems that capture customer data, such as Adobe, Oracle and Salesforce. That makes it imperative to choose a CDP that is capable of supporting varying requirements and use cases throughout the customer journey.
It’s simple business sense to focus on customer experience:
A customer data platform strategy allows advanced analytics with your customer information. You can then use the results to predict the next best action for any customer in any context, from marketing campaigns to customer service. Better customer experience improves engagement and drives loyalty, which leads to more sales and business opportunities.
A CDP strategy provides greater insight and focus for customer marketing. Because a CDP creates valuable context, it answers complex questions about your customers. That better understanding of your customers allows you to identify the right approach to reach them. And that allows you to deliver the most relevant and engaging experiences across every touchpoint and channel.
Insights from customer behavior and relationship data can help you to identify areas of potential friction. You can then avoid missteps that could cost you a customer's loyalty — and possibly their business. For example, banks don’t want to waste time offering home refinancing to customers who don’t have mortgages with them. A CDP allows the bank to identify specific customers who already have mortgages, as well as:
Data privacy and consent management have become intrinsic components of customer experience. But this can create a point of friction between departments, as you must address consent management requests. You must also be able to apply any changes to all instances of a customer's data. As a central collection of trusted customer data, CDPs can support this effort. An intelligent CDP can help you not only locate a customer’s data, but also quickly take action on it. This ability can enable cost-effective compliance with CCPA data privacy regulations.
CDPs are still evolving, and data privacy components are not yet standard functionality. As a result, vendors often expect you to manage the anonymity of your own data. If you’re considering a CDP as part of your customer data strategy, be sure to check for the ability to understand who your customers are.