Understanding Customer Data Platforms

The Role of Customer Data Platforms (CDP) within Customer Journey Analytics (CJA)

Every time your customer uses a smartphone or a computer to research or buy a product – they create data. Every click, search, comment, like, or e-mail generates data. Your customers share valuable information at each stage of their journey with your brand over time (both online and offline). Therefore, it is critical that you can capture and read that data accurately, in real-time (or near real-time), so you can start gaining insights and personalizing their experiences with your brand.

The need to gain a holistic view of our customers is not new. Yet there are literally hundreds of start-ups competing with the likes of Adobe and Oracle to sell their solution to Fortune 500 companies. In fact, Customer Data Platforms (CDP) are expected to gain more momentum than other traditional marketing technologies.

“Global customer data platform market size is expected to grow from $903.7 million in 2018 to $3.26 billion by 2023”.

What is a Customer Data Platform (CDP)?

Simply put, a CDP unifies your customer data into unified customer profiles that can be easily used by other systems. For example, a customer who visits the brand’s website, uses a mobile app and then interacts via social media is often treated as three disjointed interactions. Most likely, all this data gets stored in traditional tabular formats, in different places. A CDP assigns a unique identifier to every event where a customer interacts with a brand and, over time, stitches this information together to help turn a visitor into a ‘known’ customer.

The CDP processes personal identifiers or information that can be used to target marketing messages and track individual-level marketing results. The data stored in the CDP can be used by other systems for analysis and to manage customer interactions. A CDP helps marketers overcome three major challenges:

• Siloed data is the biggest challenge large enterprises face today. Data is often fragmented, unstructured, stored in different places, making it difficult for marketers to gain a full picture of their customers. This happens because many customer engagement systems have been added piecemeal over time, and each point solution collects and stores data a little differently, perhaps with different customer identifiers for each. A CDP ingests data from all customer engagements solutions over time, to create progressively deeper customer understanding, irrespective of structure and volume.
• For many years, the preferred strategy to address customer churn was to substitute it with a higher rate of customer acquisition. But this approach no longer works, as customers have become empowered with technology and competition has become even more fierce. It is far less expensive to retain an existing customer than acquire a new one. With a CDP, marketers get access to a centralized source of clean data, which they can base their personalization strategies more effectively.
• Lastly, one of the most critical aspects is gaining access to this data in real-time. The average customer’s path to purchase is often so dynamic and fast-moving that brands need to be able to respond in real-time. Traditional solutions update data in batches, which slows down the decision-making process. A CDP is designed to accept both, batch and streaming data. This makes it easy for the teams to personalize customer interactions and respond to signals that are often missed by human eye.

How to choose the right CDP for your company?

Before you start the process of integrating a CDP into your systems, it is important to lay a strong foundation and define clear expectations from CDP adoption. It is important to look at legal and infrastructure aspects that will support the CDP implementation effectively for your organization – data privacy laws, outlining the protection of customer data, scalable cloud solutions to collect and store large volumes of data. A CDP should have an easy to use, an intuitive user interface that enables everyone in your team to have quick and easy access to insights and intelligence to act upon.

Where does the line fall between a CDP and customer journey analytics?

In its most basic form, a customer journey is a record of all the various interactions an end-user has with a vendor, and encompasses both internal data (sales, marketing, service) and relevant external information (demographics, social media activity, etc.).

Gartner defines Customer Journey Analytics (CJA) as the process of tracking and analyzing the way customers and prospects use a combination of available channels to interact with an organization, over time, with a goal of delivering insight and foresight that leads to optimized customer experience.

However, many organizations begin by manually mapping their perception of the customer journey without real data and analytics in place. As they advance with the automation of these manually formed journey maps, they end up acting basis inaccurate / less-informed insights and fail to achieve desired results. Hence, CDP becomes a great starting point to capture data effectively.

‘What’s important to remember is that customer journeys aren’t created; they’re discovered. When we try to create journeys, we fall into one of these two traps: we either hallucinate customer needs or throw away the customer experience playbook altogether and focus on the needs we know intimately: our own.’

With advanced AI (machine learning and reinforcement learning), it is now possible to go beyond simply analyzing and offering insights. The latest, best of breed solutions offer timed and sequenced next best action{set}s for digital and physical touchpoints, with advanced capabilities of tracking multiple business KPIs by orchestrating customer journeys in real-time and at scale.

CVX uses advanced machine learning capabilities to process large quantum of data to offer insights, predictions and actions that can be directly tied with the business KPIs such as new customer acquisition, upsell and cross sell opportunities, reduction in risk and customer churn.

This is a stepping-stone to identifying the journeys customers really want to take, including measuring their desire for new channels, technology and processes.

Request for a CVX demo by writing to James Stojanov, VP - Global Sales & Partnerships at [email protected].