The hottest new piece of marketing technology is the customer data platform (CDP). In order to understand why this category of software has grown rapidly, you have to look at some of the underlying challenges in marketing.
We live in an era where the customer is in control. Amazon can predict what products we will buy next, Netflix recommends the shows we like with great accuracy, and Uber lets us customize trips right down to the type of vehicle we want to travel in. Customers expect companies to have an intimate understanding of their preferences, want personalized experiences, and demand fast service. It’s no longer a marketing advantage to deliver on this — it’s table stakes.
When it comes to marketing, customers expect the interactions they have on a company’s website to translate to their mobile app experiences and even in-store visits. The problem is that, for most companies, those environments operate off of different datasets — even though the customer is the same. Customers also expect their experiences as they move from channel to channel to be consistent, and “in the moment.” Most customer journeys involve over three different channels (e.g., e-mail, web, and mobile app), and customers tend to move seamlessly and quickly between these channels. Most companies, however, don’t have these data environments connected in real time.
The result is disconnected experiences for consumers and the lack of a single source of truth about customers for the marketer.
The first thing CDPs need to do is connect all of a company’s customer data in a single place. That means not only stitching together a single customer ID from many different CRM instances, but also tying together databases that traditionally don’t share customer data, like marketing clouds, service software, and ecommerce engines. We call that customer resolution.
The next thing CDPs have to do is reconcile the identities we have about our known customers (like email and mobile numbers) with what we know about customers before they share their data with companies (anonymous cookies and mobile device IDs, as an example). This way, we can start to associate an interaction that started with an email campaign and continued onto the website with the same customer. We think of this as a cross-device identity.
Once the CDP has created unified profiles of customers, the system has to make that data available in real time so companies can deliver personalized experiences. That means connecting customer data to many different types of systems – email-send engines, demand-side platforms, and content management systems.
In a nutshell, CDPs are concerned with these primary tasks: data collection, data unification, data activation, and data insights.
So, what do companies use CDPs for? Here are a few examples, and they aren’t all related to marketing.
Suppression: Sometimes the best use of data in marketing isn’t used to better target consumers — but to not target them at all. We’ve all had the experience of being targeted online by ads for things we’ve already bought. What a waste of money! The reason companies have a hard time stopping ads for the sneakers (or car) we have already purchased is disconnected data. A unified profile that connects marketing and purchase data enables marketers to optimize their addressable spend by suppressing consumers that have already made a purchase, and redirecting those dollars towards net-new customers, or recommending other products.
Personalization: Say you see a consumer come to your website, browse a particular product (new red convertible), and leave. Wouldn’t it be great if you could tie everything you’ve learned about that customer to a personalized offer (test drive one today, and get $500 off MSRP!) via email or push notification? You can only do that by connecting that consumer’s identity and making that profile data available to the marketing platforms you use. CDPs make the unified profile available to all addressable channels, enabling personalization and relevancy. Customers who see content tailored to their interests (test drive this red convertible today!) are five times as likely to engage with a brand.
Insights: What drives better marketing? The answer has always been better customer insights, but most analytics systems operate in silos. Email open rates data is separate from website analytics data, and apart from display advertising data. Stitching that data together, and tying all of those interactions with the same consumer takes a herculean effort. What if an outdoor retailer had a customer’s marketing interactions (email and advertising engagement) tied together with their ecommerce data (purchase history) and website interaction data (products viewed multiple times) – and made that information available to a service rep in the call center? A bit of data science (customers who purchased this tent online, and opened email promotions for these hiking boots, and spent between $250 and $1000 annually, usually buy this backpack) can reveal the right product recommendations to the call center agent, who can make a personalized, relevant offer on the spot. This type of personalization can turn a $15/hour call center rep into a $100,000 a year salesperson.
In our next post, we’ll look at how companies leverage CDPs to go beyond marketing and advertising – and use connected customer data to tie together their organizations, create cross-company insights, and start to value customer data as something they can put on the balance sheet.
To learn more about demystifying the customer data platform, check out this blog post by Salesforce’s SVP of Product Strategy.