Why the need for a Customer Data Platform? In the present state of the industry, data can be gathered from pretty much everywhere. Be it online, with email, social media, cookies, or offline, the sheer volume of data is growing at such a rate that it’s nearly impossible for marketers to use it effectively.
Last year, we commissioned a report by Forrester Research to evaluate the average level of marketing intelligence among US B2C companies. What we learned was that the majority of companies are:
- Unable to access forward-looking insights to inform strategy
- Lacking the foundational data management capabilities necessary to generate those insights.
You can’t have reliable forward-looking insights without a reliable data foundation. Brand marketers need highly detailed data collection capabilities, as well as the tools to turn that data into insights, intelligent audience segments and personalized online experiences.
However, putting together the full analytic value chain from data ingestion, cleansing, to analysis, segmentation, predictive modeling, and activation, has historically been a very tech-heavy, fragmented endeavor. And it has been mostly inaccessible to the people who actually draw the most value from this process – the marketers.
Enter the Customer Data Platform
The Customer Data Platform rose as the solution to the problem of how can marketers bring together data from different touchpoints, turn it into actionable insights and use it to drive better decisions.
Still, when it comes to the whole concept around CDPs, the definition is still very loose. The industry is still trying to figure out exactly what differentiates a CDP from all the other types of data management platforms. And there is still plenty of variability in capabilities between CDP vendors.
According to the Customer Data Platform (CDP) Institute, a “Customer Data Platform is a marketer-managed system that creates a persistent, unified customer database that is accessible to other systems”. Its value, therefore, comes from being a central hub for all types of customer data you can imagine — web browsing, email, social media actions, visits and purchases in physical stores, as well as online platforms, and so on.
Gathering all this information together allows the marketer to have a 360º view of who their customer is, keep a single, centralized record of their customer data, and make it accessible to the whole business.
This definition suits the CDP category for now because it is still new and developing. But even in this early stage, CDPs are taking a direction far beyond mere “databases.”
What a best-in-class CDP looks like
These are the requirements for a Customer Data Platform that brings marketers closer to their customers and vitalizes the whole business with accelerated data management and analytics capability.
1 - It provides a unified, private view of the entire customer journey
A CDP should place the brand in direct control over their data relationship with their customers. In our view, the most valuable capability of a CDP is the ability to collect highly detailed user behavior data, match it with customer profiles, and track the customer journey across devices and channels, independently from third-party systems.
With a CDP, there needs be no one closer to your customers than you. With the ability to fire your own first-party tracking tags, you can create your own behavior-based audience segments to activate in campaigns, and orchestrate consistent cross-channel experiences.
2 - It accelerates business growth
Going beyond collecting data, a CDP should help to bridge the gaps between data collection, analytics, strategic decision making, and real-time customer interaction.
A CDP should help marketers in two fundamental tasks:
Learning from their data:
It needs a user interface that delivers real-time insights on customer interactions and campaign performance, and allows users to interrogate the data further.
Acting on their data:
A CDP should have dynamic abilities to improve customer interactions in real time.
The rich foundation of first-party data collected by a CDP presents the opportunity to apply machine learning and predictive modeling, so you can reach customers with the best message, at the best time, using the best medium every time.
3 - It is adaptable to the needs of your business.
CDP buyers should make sure they choose a CDP that can be tailored to their exact needs, and is also able to adapt and scale as your business grows or your objectives change.
To that end, the CDP needs to balance perfectly between ease-of-use, and system flexibility. Too often one is sacrificed for the other.
4 - Keeps data under your control
Your first-party data is your most valuable asset. Therefore, your CDP should help you keep it safe and private. CDPs shouldn’t be run just like another SaaS service, operating on centralized multi-tenant shared infrastructures that allow for lower operational costs to the providers. While this operational style makes a lot of sense for many kinds of services, it doesn’t when the service in question is hosting and processing not just companies’ data but their customers’ information too.
Putting marketers in direct control of their customer data also means putting them in control of compliance with regulations. That’s only possible if your CDP is deployed privately, single tenant, behind your firewalls, so you have complete control over what goes in and out.
“Inside the Black Box” is a series intended to peel back the layers of what a CDP is, how it works, how it helps businesses grow, and answer common questions. We will continue to update and add to the series over time. Stay tuned for future editions which will focus on demonstrating how the Velocidi CDP fulfills the requirements outlined here.