Customer Data Platforms are getting rapid traction due to the following reasons as all companies even large FMCG firms are ramping up direct to consumer initiatives and digital marketing.
With the changes in data privacy rules by Apple and deprecation of third party cookies by Google there is a mad scramble to aggregate first party data for driving personalization and digital growth. This needs an overhaul of the data stack and marketing stack together to increase agility , unify the customer view across multiple touch points and make the firm ready in a cookieless future . CDPs act as an unifier across the tech stack ( big data clouds) and business use cases – marketing, personalization, analytics by unifying first party, second party and third party data and make them ready for activation through agile segments. CDP offers several benefits viz.
It breaks the data silos to give one customer view
As a software that collects and organizes customer data across different touchpoints for use by other software, systems, and marketing campaigns, it is a Swiss army knife for reducing friction between data teams and business teams (especially marketing) by creating a very scalable data platform that can handle events, streaming and structured data in one platform . It follows the principle of segment once, apply everywhere. It also drives consistency across the organization when it comes to data taxonomy , extraction of data and usage of a common segmentation/cohorts that help in growth marketing.
Its also flexible enough to integrate data from CRM, ERP, sales support software and customer support and is able to stitch the customer profile with additional attributes from marketing systems and other third-party data providers.
Stitches 1st, 2nd and 3rd party data across multiple identifiers
While it relies on first-party data to build a comprehensive customer profile , once the profile is complete, it can enhance it by integrating second-party and third-party data sources. It also has built in identity resolution to help navigate the variety of customer identifiers – email, phone no, first party cookies with consent , ad ids and many more with flexibility of stitching these rules. Hence CDPs help companies combine all forms of data – first, second and third and communicate it to the multiple departments and technology platforms, thus offering an unified solution.
Different from data analytics projects
Data analytics tend to focus on the value chain of data preparation , data modeling and application of the model for a specific use case e.g. churn management. CDP deployments are more far reaching , they want this process to be shorter and reduce the reliance of too many ETLs for data preparation and solving for multiple activations through a set of pre-built connector with rest of the tools – CRM, sales activation, Facebook marketing to name a few. It allows organizations to be activation focused rather than analytics focused – its great to have a model but if you cant use it for growth marketing , it defeats the purpose
More data horsepower compared to Marketing automation platforms
Many organizations may have a DMP or a Marketing Automation platform. With the deprecation of the third party cookie and stringent privacy regime by Apple , DMPs are a piece of junk. DMP collects data as segments , only supports third party data and has only advertising related activation as the primary use case. CDPs are much better than DMPs since they can handle multiple data.
They are also fundamentally different in design and functionality from marketing automation systems, although they provide some of the functionality .Marketing automation platforms do not have the industrial scale data handling muscle and the flexibility to port a segment created for a campaign for non marketing use cases. This is a limitation when you want to do true personalization. Hence many large companies deploy it alongwith a marketing automation platform as an end point to receive the data.
Scalable digital growth and personalization through multiple activation possibilities
It makes individual profiles, segments, or all customer data available to social networks, websites and mobile applications, email marketing systems, advertising systems, business intelligence tools, and others. By providing all the activation links that are a precursor to personalization, it sets up a strong platform to build new data and marketing initiatives. It is truly a build once , re-use many times for multiple use cases later type platform. Hence you can actually drive true multi-channel and omni-channel personalization without having to do data ETLs multiple times. It brings the customer view and its activation at the center of every marketing discussion.
For more details on use cases of CDP, click here