An explosion of customer data is bringing endless opportunities for businesses to get to know their audiences and deliver relevant, personalized experiences that drive engagement and loyalty. With almost 2 billion internet users in the APAC region—and a forecast of 8.6 billion connected devices by 2020—customer data volumes are only set to grow.
But businesses are struggling to make effective use of this information, which includes transactional, demographic, and behavioral data, due to poorly integrated systems and disparate data stores. When asked about the biggest barriers to understanding the customer journey, over a third of marketers in APAC cited difficulties in unifying different sources of data. By 2020, one of the top three reasons for customer dissatisfaction across all verticals is expected to be poor engagement due to siloed customer data.
There are innovative systems available to help businesses manage data fragmentation, the most effective of which are customer data platforms, or CDPs. CDPs are new and have been rapidly gaining recognition of late as a way of taming unmanageable data stacks. The demand for these platforms is now high, with the CDP market expected to reach $1 billion next year.
So what are CDPs and how can they help businesses make sense of their customer data?
The secrets of the CDP
A CDP is a system that brings together customer data from a variety of sources in a central platform into a universal data foundation. It unifies information from organizational silos. For instance, a CDP amalgamates data that is stored by marketing, customer service and business intelligence teams. It also pulls data from technological silos, bringing together information from different channels, devices, and systems using precise ID resolution.
By bridging these disparate data repositories and centralizing information, CDPs can create persistent profiles that provide a detailed single view of the customer. These continually updated profiles are made available to all systems and departments throughout the organization so they can be used to provide an exceptional personalized experience, whether through relevant, targeted marketing or seamless customer service.
Delivering seamless experiences
Implementing a CDP brings multiple business benefits. Customers expect consistency across all the channels and devices they use to interact with a business, including historical transactions, connected devices, call centers, and point of sale. By allowing all parts of the organization to access the single customer view and leverage that information across multiple touch points, CDPs enable comprehensive customer experiences without blind spots.
The technology avoids, for example, a call center operative at a financial-services company recommending a credit card the customer has already signed up for online. Or a furniture retailer targeting a customer with ads for a bed they have already bought in store. Instead, businesses can use the customer’s granular, up-to-date profile to seamlessly deliver whatever is required to meet their immediate needs.
A CDP also increases business agility, allowing new solutions to be easily integrated into the technology stack, and enhances operational efficiency by allowing audiences and business rules to be set up centrally and applied across multiple tools.
Differentiating data platforms
With a multitude of data-related products on the market, most with similar three-letter acronyms, it can be tricky for businesses to understand the difference between a customer relationship management (CRM) system, a data management platform (DMP), and a CDP. But recognizing the distinct roles of these systems is vital.
CRM systems only store transactional data and cannot provide insight into anonymous user behavior prior to transaction. They also have very limited integration with other systems. DMPs are cookie-based, do not generate persistent profiles, and usually only integrate with advertising technologies rather than with systems used throughout the customer journey, including product use and customer service. While CDPs have a heavy focus on exclusive first-party data, DMPs tend to rely on less valuable third-party data.
Making the most of a CDP
The single view of the customer is incredibly powerful, but only if it is fed by multiple diverse data streams. If the platform is only integrated with select data sources, there will still be blind spots within the business that can damage the customer experience. To make the most of a CDP, it should access data from websites, mobile apps and customer service systems, as well from beacons or IoT devices that register offline activity. To have a positive impact on customer experience, a CDP should also be integrated with multiple technologies such as marketing-automation platforms, allowing them to drive the execution of consistent and relevant action across the tech stack in real time.
Tackling data fragmentation is vital to make the most of the vast volumes of customer data available and deliver seamless, personalized experiences that ensure business success. CDPs offer a means to unify customer data from disparate sources into a universal data foundation, creating a single customer view that can be leveraged across all touchpoints throughout an organization.
Joseph Suriya is director of marketing for APAC at Tealium.