A study by Google showed that customers today use between 20-500 touchpoints across channels like email, ads, social media, mobile, websites, and apps. In the year 2020, it was observed that the growth in customer data was matched equally by the strength of customer expectations.
Why having a CDP is key to optimal business performance for brands?
A Customer Data Platform is crucial in customer data management and for enabling deeper, more personalized communication between brands and customers. CDPs also provide business leaders with rich data insights to make strategic, well-informed management decisions, resulting in better customer profiling, high accuracy in market insights and evolving customer preferences that eventually lead to better revenue optimization and stability.
In the wake of the pandemic, there occurred a digital transformation that resulted in businesses across sectors investing in new-age customer experience technologies. While the effects of the pandemic were arduous to both consumers and brands, the rise of customer support and digital business operations were driven towards building experiences that were entirely customer-centric. It was evident that digital customer retention had become the most critical catalyst to a brand’s survival.
This rise in digital customer behaviour has led to a huge influx of data in the digital public ecosystem. The new challenge for business leaders is to gather fragmented data and customer interactions from various digital channels and offer a seamless, unified customer experience. A study by Google showed that customers today use between 20-500 touchpoints across channels like email, ads, social media, mobile, websites, and apps. In the year 2020, it was observed that the growth in customer data was matched equally by the strength of customer expectations. Today’s well-informed, tech-savvy customers expect brands to be aware and accommodative of and meet their evolving needs. They also expect 24×7 brand responsiveness and query resolution in real-time. If these digital needs are not met, it could very well lead to them shifting loyalties to another brand which fulfils these expectations.
For brands, it can be a humongous task to track individual customer journeys across various touchpoints in order to effectively cater to their requirements and provide seamless customer service. Customer Data Platforms (CDPs), however, provide an efficient solution by unifying customer data from multiple online and offline touchpoints and consolidating it into a single, actionable view. CDPs can help businesses gain a deeper understanding of their customers to offer enhanced customer experience and retention, while ensuring continued value for a brand’s investment in its digital presence.
Why brands need a CDP
A CDP is packaged software that ingests first-party data and then matches individual customer identities from each system to create a single, unified customer profile. Customer data is then formatted for internal processes and systems including customer relationship management (CRM), analytics, marketing automation, and A/B testing to analyze track, and manage customer interactions. It provides an accurate and easily accessible history of customer interactions and transactions. Business leaders can then determine the best business strategy to maximize RoI. CDPs can additionally help businesses engage with customers on a more personalized level, gaining customer insights that can be leveraged by multiple departments such as Marketing, Product Engineering, Customer Service, and Sales to identify cross-sell opportunities.
A CDP collects and collates three types of data. Behavioural data is collected from websites, apps, live chat, digital assistants or other online channels. The number and frequency of those interactions are also recorded. Transactional data stems from customer purchases and returns, e-commerce or POS systems. Demographic data includes the customer’s name, date of birth, and address.
According to the CDP Institute, there has been a sharp increase in the number of companies that have deployed a CDP in 2020 compared to recent years. 29% of respondents had already deployed a CDP in 2020, more than 1.5 times that of the previous year.
Advantages of CDP for brands
Having the right data insights and analytics can help marketers not only meet present customer requirements, but also identify and attract prospective customers with innovative campaigns. CDPs can connect with other marketing platforms and systems, providing data to support campaign management, marketing analysis, and business intelligence.
According to a recent Forbes survey, 53% of marketing executives mentioned that CDP was helping them understand their existing customers’ needs, increasing the chances of repeat business based on the positive customer experience.
For Sales, CDP can be integrated with machine learning capabilities that sift through user data and identify behaviors that signal strong intent to purchase. This can help sales teams prioritize those users most likely to purchase, driving more revenue for the business.
Product engineering teams can also use CDP data to gain insights into how customers are engaging with a particular product and accordingly streamline production.
In terms of customer service, 71% of customers expect companies to collaborate and share information internally so they don’t have to repeat themselves. CDPs help in enhanced customer interaction as data is gathered in real-time. This allows servicing agents to identify precise customer insights from past transactional details.
For business leaders, a CDP provides a complete view of each customer, as opposed to siloed departmental views. This provides a much more accurate picture of the customer journey, making it easier to identify repeat purchase patterns and trends, helping strategic business decisions.
CDPs also play a big role in aiding brands to abide by data privacy laws and regulatory compliance. By streamlining the data platform and centralizing data infrastructure, CDPs eliminate isolated data sets to provide real-time, accurate customer data. This helps identify what portions of data to keep and what to get rid of in case a customer objects to data storage, through easy identification of data shared through the pipeline. CDPs also enable brands to share data based solely on customer consent. Customers thus feel empowered about having control over the data they share and being contacted through preferred channels of communication.
For all these reasons, the CDP market is expected to grow rapidly over the next five years, from $2.4 billion in 2020 to $10.3 billion by 2025.
CDP and CRM – The dream team
CRM platforms provide more front-facing, direct customer experience solutions. They are used for tracking transactions, analyzing the data pipeline, and managing customer experience. They can help gather customer data that marketing teams can use to build a stronger relationship with the customer, but from individual channels without aggregation.
CDP’s can integrate data from both structured and unstructured sources, as well as online and offline sources to build a unified customer profile. The key difference is a CDP’s ability to handle wider touchpoints and trace customer profiles from site visitors to actual customers. In its non-customer facing role, it provides actionable customer data insights to help sales, marketing and customer service teams uncover customer data patterns and trends, to drive better customer experience. So, while CRM can use CDP data to aid in customer retention, engagement and servicing, CDP helps in creating a more personalized brand interaction.
Thus, for businesses today, it is possible for CRM and CDP to coexist. The benefits of CDP data insights and a powerful CRM platform ultimately aid in better management across the various business functions, boosting overall online business performance and revenue. It also helps in ensuring new and repeat customers, with superior customer experience enhancing customer delight and loyalty.
Source: Business World