A customer data platform (CDP) marketing tool collects first-party data and builds unique, unified profiles. It then makes those profiles available to other marketing systems.
The best digital customer data platform should make it easy for teams to collect, manage, and activate data. But that’s just the start. You need to understand its key features to get the most out of this powerful tool. Let’s Explore the key features of a customer data platform.
Table of Contents
Identity resolution
The foundation of effective marketing is the ability to resolve consumer data into a single, consistent profile. With it, marketers can only send consumers relevant or unique marketing communications. This is especially true in cookieless environments, where tracking consumers with a persistent individual or household ID is often necessary. Achieving this requires cross-device identity resolution and a first-party data strategy.
With deterministic identity resolution, you know who’s engaging with your brand in real time and can connect these separate interactions to a single-person identifier. This gives you the confidence to decide about that person’s experience and behaviors, providing a solid ROI for your marketing efforts.
Probabilistic matching is an alternative to deterministic identity resolution and offers varying certainty about which identifiers belong to each customer profile. It can be used with first-party data to link engagement to a profile or with third-party data to match data with a common identifier such as an email address or mobile device number.
A good digital customer data platform will offer deterministic and probabilistic identity resolution and support unique person identifiers across devices, channels, and platforms. It will also provide robust integrations with other martech and adtech systems and comply with industry and international data regulations. It should also be able to scale to meet the needs of large enterprises.
Data ingestion
A customer data platform unifies customer data from a variety of sources. These sources can include transaction and order data from e-commerce or administration systems and product data from internal databases. These platforms use sophisticated data aggregation algorithms to stitch together these diverse data sets. They also apply identity resolution to create a single, unified customer profile and continuously update this profile as customers interact with brands across digital channels.
The platform can also capture behavioral and web data, including the products a person looks at and how often they visit a website or mobile app. This information can help marketers better understand customers’ buying behavior and anticipate their needs. It can also be used to deliver more personalized marketing messages.
One of the biggest challenges with data ingestion is the volume and diversity of the data being ingested. Some data may contain sensitive or personally identifying information, meaning it must be handled carefully. Noncompliant usage of such data can damage trust and potentially result in regulatory fines.
Another challenge that data teams face is the speed with which data can be ingested and processed. For example, the time it takes to ingest and process data can impact the quality and accuracy of the insights that can be generated. To address this issue, some teams opt for batch data ingestion strategies that provide regularly recurring access to data insights. Other teams use micro-batch strategies to ingest data every few hours or minutes. In either case, the ingestion pipelines must be idempotent to avoid creating duplicate records when jobs are rerun.
Segmentation
A customer data platform allows marketers to segment customers and create unified profiles to share with other systems. This capability can be extremely useful for optimizing marketing efforts. For example, if you are selling a new product, you can target a segment of your market that is interested in it and would likely purchase it. Another way to use a CDP is to identify a segment with the most potential for conversion and send them personalized messages.
For example, if you own a brewery and have identified a group of consumers with kids who frequent your establishment, you could target them with a message about a family-friendly atmosphere. You can also target consumers based on their geographic locations to send them more targeted ads.
A digital customer data platform unifies all your customer information from multiple sources and platforms into a single, unified profile, making it easy for different teams to use. This is a huge improvement over previous customer data platforms that often take hours to sync and limit marketing, commerce, and customer service teams’ ability to make decisions in real-time. In addition, a CDP can support predictive scoring and iterative insights to optimize customer journeys and accelerate growth. This powerful tool boosts brand loyalty and delivers a superior customer experience.
Automation
Many systems marketers use—CRM, analytics, email, social, ecommerce, and web content management—operate in siloes that don’t communicate with each other. This makes it difficult to get a complete picture of customer data and analyze it. A CDP solves these problems as a central database for first-party customer data.
CDPs provide marketers with a complete view of their customer’s behavior and interests by collecting, normalizing, and activating this data. They can then use this information to personalize digital experiences that build brand loyalty and drive repeat business.
One of the most critical functions of a CDP is automation, which saves time and money for marketing teams. For example, CDPs automatically distribute marketer-created customer segments to external martech systems on a user-defined schedule. This helps marketers create personalized experiences for each customer while reducing the number of campaigns that need to be more relevant to them.
CDPs also help marketers comply with strict data protection and privacy laws today. By ensuring that all data collected about consumers is unified in real-time, brands can ensure that they are not violating customers’ rights to access, revoke, and correct the data companies have on them. This is important as more countries implement legislation like the GDPR and CCPA. In addition, a CDP can ensure that all of a brand’s systems work together seamlessly.
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