Customer Data Platforms (CDPs) are not only becoming more frequently talked about but are now an integral part of many companies' data ecosystems. But what is a CDP and how exactly do they work?
Consider an experience where you've been looking to make a significant purchase. Perhaps this purchase is the latest iPhone or a new car. You've likely visited various websites looking at a selection of makes and models before gradually refining your search.
During this researching phase, you notice your search results have become increasingly tailored towards you specifically, with one or two companies garnering the majority of your attention. You visit their websites and find that they already have the specific model that you're interested in built into their “design it yourself” feature, with recommendations for possible alterations that also suit your preferences.
Eventually, after making some very minor adjustments you end up picking the product you want, and one that fulfils your initial requirements.
You receive a detailed follow up email when the product arrives and you think to yourself; “wasn’t that a smooth customer experience?”.
How do these companies, with such high satisfaction rates, get their modelling and targeting so accurate? The answer is a CDP.
CDP’s do away with one of the great constraints of data. That being, how difficult it is to analyse information from the dozens of sources that companies have at their disposal. Especially when many of these sources (often siloed) are locked behind proprietary barriers, limiting a company's ability to utilise their information in a comprehensive way.
With connections from all of these different sources of data, companies with CDP’s are able to gain a much more realistic and comprehensive understanding of who their customer is and what they’re interested in. Coupled with audience building technology, this gives unparalleled insight into who makes up your audiences and what categories they fall into, no matter how broad or narrow those categories may be.
A CDP collects and combines all of these varied sources of data into the one system, giving you a holistic and comprehensive view of your customer. It ensures your marketing efforts are far more targeted and you are able to generate results not previously possible.
Take a gym for example. A CDP can collect and combine data that can be used to implement a strategy to reduce membership cancellations. Let’s say the visit frequency of a member declines and this same member then views the cancellation terms and conditions page on the gym's website. A CDP can combine this data and flag the member as a churn risk. Then, members who are flagged as a risk of cancellation can have an automated offer delivered to their email or mobile device. Perhaps a free personal training session or member exclusive offer, giving the gym a second chance to keep the membership active.
In an economic impact report commissioned by Segment, Forester found that the ROI of Segment’s specific CDP was 198% percent over only 3 years. Accomplished by optimising their spend on online media (ensuring that their messaging targeted those people who actually do have an interest in their brand), as well as saving thousands of hours that would otherwise have been spent maintaining the existing, bare bones and ad-hoc data transfer systems that they already have in place. Results that have been duplicated across hundreds of companies of all sizes.
With over 99% of C level executives stating that their investments in big data and AI are on the rise, it’s best to get connected before the antiquated systems of the past are truly left behind.
We know data can be a challenge. It’s why it’s at the heart of what we do. Interested in how a CDP could take your business to the next level? Reach out to one of our experts to see how we can help.