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      Customer Data Platform (CDP)

      It’s a Big Deal: Your CDP Questions Answered

      By Carl Bleich

      Oct 01, 2021

      19 min read

      Customer Data Platform (CDP)

      It’s a Big Deal: Your CDP Questions Answered

      The customer data platform (CDP) market has expanded as e-commerce has boomed over the past few years. 

      The growing role of CDPs has led companies to explore going beyond standard CDPs in their tech stacks as they look for the best way to personalize content and optimize the customer experience. 

      To shed more light on what can be a complicated market, we brought in our strategic partners to answer key questions about customer data platforms. No matter where you are at with your CDP project, these questions and answers will help you evaluate your company’s offering and help ensure that you are (or will be) getting the most out of your CDP. 

      Q: Why do companies need a customer data platform?

      A: Karl Schneider, VP Technology, Ogilvy

      Most companies have a variety of platforms or applications that provide the functionality typically found in CDPs: identity resolution, customer profiles, web tracking, order history, personalization, analytics, etc. But these features are usually limited to the scattered disparate platforms they reside in.

      CDPs are explicitly designed to ingest customer data from a wide variety of sources, connect it via standard or bespoke identity resolution methods, share the resulting customer profiles with a wide variety of platforms to activate their features and functions accordingly, and provide analytics and machine learning capabilities. They represent the evolution of the typical technologies available, but in a centralized platform that not only provides the “single source of truth” that marketers and salespeople have longed for, but also the mechanism to deliver the insights from that single source of truth to the platforms that drive engagement and revenue.

      A customer data platform can be the foundation for enabling the rich user experiences that customers – both B2C and B2B – demand today.

      A: Marta Bote González, Marketing Automation Consultant, SQLi

      The most important reason why customer data platforms are so important for e-commerce is that you need to get to know your customers to understand what the best way is to approach them. You have to understand what their needs are and preferences and how they interact with your organization.

      In a crowded market like today’s, customers are constantly being overwhelmed with information and advertisements from all types of products and services. To break through that noise and capture customers’ attention, leading companies understand that the more personalized and targeted the communications are to what the customer needs, the greater the likelihood they will pay attention. Less is more.

      Therefore, having high-quality customer data centralized into a CDP, ensures unified, centralized customer data that then can be used for in-depth analytics and as a foundation for personalization to reach your customers in the way they prefer, with the content they are most likely to be interested in.

      Q: What specific problems does having a customer data platform solve?

      A: Nico Lozano, Data & Martech Solution Consultant, Merkle

      The main problem that a CDP helps to solve is realizing the value of the data held by a business. A CDP is an enabler within an organization but does not identify the problems.

      Some of the problems that we have seen organizations solving through the use of a CDP are: 

      • Data Availability: CDPs allow organizations to create a unified consumer view that can be used to create richer segmentations or as treatments to personalize content
      • Multichannel Journeys: orchestrating the data to deliver journeys that go across multiple channels
      • End-to-end journey analysis: when moving into sophisticated journeys, creating a centralized reporting layer is challenging since each tool involved has its own separate reporting. Through the unified consumer view, CDPs allow creation of unified reporting to track the end-to-end performance of a journey

      A: Mike Moore, AVP, Data Platforms and Architecture at Ansira

      Customer Data Platforms solve a variety of problems that plague today’s marketer. 

      Data silos created by complex martech stacks can undervalue your consumers by creating a partial view of their behavior.  Database Platforms managed by highly technical teams can help to consolidate data into data warehouses, but this creates a dependency on highly technical resources familiar with specialized Extract, Transform, and Load processes.  

      CDPs offer a variety of integration capabilities including out-of-the-box (native) connectors, custom connectors, APIs, and Webhooks, which can be set up in minutes. Once implemented, these integrations funnel all those disparate data collectors/providers into a central platform that offers simple navigation to empower non-technical resources with the ability to create a true 360-degree view of your consumer, configure audience segments, deploy omnichannel communication journeys and R/T personalization, and even create meaningful analytical dashboards.

      Q: How do you know if you are ready as a company for a customer data platform? 

      A: Frank Rauchfuß, Managing Director Consulting & Data at Diva-e

      As soon as a business is dependent on repeat purchases and does not make sufficient profit from an initial purchase alone, the use of a customer data platform is recommended. 

      This is because there is then a need to focus on existing customer management and to make a strong case for customer retention. Before doing so, however, you need to check what impact customer switching costs have on your business. 

      There are procedural switching costs, such as those incurred by a new setup, preliminary research, or a learning phase. Financial switching costs describe an investment that comes with switching providers. Relational switching costs refer to the customer losing the relationship with the old vendor, staff, and brand that has been built over the years.

      A: James Burr, Senior Director, Wunderman Thompson

      If you have customers, you are ready for a customer data platform.

      A benefit of CDP’s is their ability to be implemented alongside existing data infrastructure. They are “non-destructive” and allow data to be captured, processed, and activated without disturbing the existing investment in traditional data warehousing. Most CDPs are also priced around the amount of data they handle allowing a low risk, low investment opportunity to test whether a CDP could benefit your company.

      Q: Identify some important questions to ask your vendor before you begin the process of purchasing or implementing a customer data platform.

      A: Justin Stayrook, Principal, Customer Experience, BORN

      Below are a few key questions to ask your vendor: 

      • How many technologies do you have that contain customer data?
      • How do you measure the success of your digital campaigns?
      • What are the important KPIs for you to improve this year?
      • Are you able to target campaigns based on non-digital data?  E.g store visits or call centers.

      A: James Burr, Senior Director, Wunderman Thompson

      As the major advantage of a CDP is the ability to be managed and controlled by a non-specialist team, we always recommend asking for a hands-on demonstration of the platform. A vendor should be able to demonstrate in a live system how events are captured, processed, and activated with minimal specialist skills or training.

      Other key questions would be:

      • What out-of-the-box integrations does the vendor support? 
      • Are there any limitations on the speed of data ingestion?
      • What are the highest effort parts of the solution to implement?
      • Can the CDP run on a client's private cloud?
      • What specialist skills are required during implementation?

      Q: Why is obtaining a 360-degree view (or single customer view) of the customer so valuable? 

      A: Karl Schneider, VP Technology, Ogilvy 

      The primary value of having a 360-degree view of the customer is the ability to provide the most optimal customer experience possible. Such an experience ensures that you will generate the maximum engagement possible with your audience which will lead to the highest potential wallet share, highest potential loyalty, highest potential advocacy, and ultimately the highest potential market share you can possibly achieve.

      Granted, you’ll have to deliver on the promises you make to your customers. But having anything less than the comprehensive picture of your customer leaves you scratching and clawing to try and achieve the engagement needed to establish a strong relationship with your audience.

      A: Frank Rauchfuß, Managing Director Consulting & Data, Diva-e

      The "single customer view" is a report that combines all data about the customer in one central location. This gives you a comprehensive view of all activities that originate from your customer — regardless of whether they take place online or offline. A SCV therefore provides you with a cumulative and holistic view of all the data you know about your customer.

      Companies significantly strengthen their customer loyalty by creating a unique, engaging, and individualized experience for their customers and offering them exactly what they are looking for. With a CDP, they succeed in creating personalized and satisfying buying experiences. CDPs break down silos and provide resolution of fragmented and isolated data. In turn, they rearrange the data, enabling personalization that becomes the foundation for a holistic experience with omnichannel experiences and real-time communications.

      Q: What are some key use cases that you would expect at customer data platform to enable? 

      A: Nico Lozano, Data & Martech Solution Consultant, Merkle

      The key use cases that are going to deliver the maximum value for a company should be tailored to the specific organization needs and their consumer relationship. 

      In our experience, to make a CDP initiative successful, it is important to have a plan that helps to embed the CDP in daily work. We recommend defining a list of basic capabilities that are not currently present, things like:

      • Delivering channel + 1 journeys by joining email and inbound personalization or media and inbound personalization
      • Using segments that join website interactions, transactional events, and the CRM customer attributes
      • Having a ready list of consumer real-time interactions that can be used to easily configure new triggered journeys
      • Recognizing logged-in customers across the different digital assets (different web domains and apps) to enable consistent message delivery

      A: Justin Stayrook, Principal, Customer Experience, BORN

      We would focus on having a CDP that would offer three main use cases: 

      • Enabling call centers with digital information on customer behavior
      • Linking website personalization to email activity
      • Using point-of-sale data to enhance e-commerce experiences

      Q: What specific problems does having a customer data platform solve? 

      A: Mike Moore, AVP, Data Platforms and Architecture, Ansira

      Customer data platforms should solve for a variety of problems that plague today’s marketer — with each offering slightly different solutions to the same underlying issues.  

      So what should a CDP be able to do? First and foremost, a CDP should be able to easily integrate disparate data sources and provide configurable identity resolution algorithms.  

      These are imperative to the creation of a single customer view. A CDP should be extensible because your data is going to grow exponentially once the CDP is implemented.  

      Beyond that, a CDP should provide segmentation capabilities. It should provide omnichannel orchestration. If it doesn’t offer ESP capabilities, then it should be able to easily integrate with a multitude of providers.  

      It should enable R/T personalization for your site and mobile applications. It should provide in-platform analytical capabilities so that you can monitor the effectiveness of everything you have implemented.  

      Lastly, it should address data governance, consent, and privacy management to ensure compliance with legislation and governing laws and regulations like the General Data Protection Regulation (GDPR) and others. 

      A: Marta Bote González, Marketing Automation Consultant, SQLi

      Customers expect organizations to provide them with a satisfactory customer experience, and they are willing to pay more for such an experience. But to provide a satisfactory customer experience, organizations need to get to know your customers first: their needs, challenges, and preferences, and have that customer data ready to use, in real time.

      Being able to handle and act upon this data has shown to be key to the growth of top organizations, as compared to similar competitors in their markets. This is only possible through centralized customer data collection, analysis, and activation.

      McKinsey Research tells us that organizations that leverage customer behavioral insights outperform peers by 85% in sales growth and more than 25% in gross margin. However, leaders and organizations struggle to collect, organize, or use this customer data for several reasons: 

      • Data is collected and analyzed but the organization is not set up or ready to act upon it.
      • Data is kept by certain teams within the organization so not everyone can access it and learn from it.
      • The customer data collected cannot be activated through all channels because it is not kept in a central repository.
      • Customer data is kept in IT-managed solutions in a status that is not ready to use by the (non-technical) marketing team.
      • Data is scattered and siloed across the many different disconnected solutions used by the teams.
      • The data is being collected but cannot be processed properly so no insights are drawn from it.

      A CDP solves these data challenges to enable capabilities such as personalization, omnichannel marketing orchestration, in-depth customer insights, marketing efficiency and effectiveness, and a long list to add to this.

      Bloomreach Engagement is the CDP of Choice for Marketers

      A special thanks to all of our wonderful partners for providing their insights on such a key topic in today’s market. Those questions and answers provide outstanding insights and a great look into the world of customer data platforms. 

      If you are looking for a CDP that allows you to take meaningful action with your data to drive revenue, Bloomreach Engagement, our Customer Data and Experience Platform (CDXP) is the solution for you. The CDXP allows marketers to unify all of their customer data and deliver connected customer experiences with a single solution. 

      If you are ready to optimize your customers’ experience with your brand, schedule a personalized demo today to learn what Bloomreach can do for you. 

       


       

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      Carl Bleich

      Content Marketing Manager at Bloomreach

      Carl works with Bloomreach professionals to produce valuable, customer-centric content. A trusted expert with over 15 years of experience, Carl loves exploring unique ways to turn problems into solutions within digital commerce.

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