By David Tomas, on 26 July 2019
Managing customer data is one of the biggest challenges we face in digital marketing. If you’re looking to effectively manage your customer data, a customer data platform may be the solution for you.
This new technology for improving and optimizing work consists of a platform designed to solve the problems of integration, labeling and storage of customer data. In this way, we can have a unified vision of all your interactions in the customer data platform and thus have more information to develop and execute our strategies. You want to know more? Keep reading!
What is a customer data platform?
What do we call "customer data"?
To define what a customer data platform (CDP) is, let’s start with the words customer data. What exactly is customer data and why is it so important in digital marketing?
Nowadays, companies have more data than ever before in history. We have transactional, demographic, behavioral data ... In addition, this data has different levels of personalization, from the impressions of anonymous advertisements to the purchases of a specific client, through to the use of products and interactions with customer service. .
All this data, taken as a whole, is what we call customer data. The problem is that normally this data is isolated in silos for organizational or technical reasons, and this makes it very difficult for companies to offer consistent customer experiences in the different channels and devices.
Customer data is about accumulating a lot of data for analysis for optimization of our campaigns.
Almost everything is connected to web where every instant data on our preferences in fashion, computer, sport, etc. is being pulled. customer data is can be used for analyzing and to adapt the organizational strategy to reach higher conversions and sales.
Customer data is evolving fast. Data is collected from customers at all times by social networks, web page visits, etc ... which makes it more difficult to analyze and extract meaning from. Deciphering the truly relevant information requires focus.
What is a customer data platform?
Once we are clear about the data we handle, we can move on to the definition of the platform: according to the Customer Data Platform Institute, a customer data platform is a system controlled by a marketing team to create a unified and persistent database and to which other technologies can access.
That is, it is a system that tags and centralizes customer data from all channels and heterogeneous sources, unifies them in a repository and then enriches them with attributes to generate audiences and 360º profiles.
A defining characteristic of the customer data platform is the great diversity of data that can be stored and unified. Here are some common data sources:
Transaction and order data: ecommerce, administration and sales systems that generate data about purchases, order and renewal dates, the value of customers and products, abandoned carts, returns , etc. Undoubtedly, this is very valuable information for marketing and sales initiatives.
Behavioral data, web and mobile: products and categories visited by the user, clicks, information on interactions, number of pages visited and more. This type of data is very important to discern the behavior and preferences of users, both current and anticipated.
Profile data: without customers, no company would exist. Therefore, knowing who they are and what they want leads to more effective marketing. In this category we can find contact data and forms that can be enriched with psychographic information (lifestyle, context, preferences, personality ...).
Product data: although this is not strictly customer data, it is very necessary to have personalized and meaningful interactions with customers. Two basic examples are inventory levels and price.
What is not a customer data platform?
In the world of digital marketing tools, there are many solutions that promise to give a comprehensive view of the customer. Therefore, it is normal that there is confusion between customer data platforms and other similar solutions. Here’s how we distinguish differences between customer data platforms and and other tools.
A customer data platform is not a CRM. CRMs or customer relationship managers are designed to interact with clients and create profiles of them, but they work with limited data sources and are not designed to integrate and combine a variety of information as large as CDP. The CRM usually focuses on the identifiable personal data, while the CDP usually contains data around cookie identifiers or mobile devices.
A customer data platform is not a customer integration tool. Many customer projects try to build tools from scratch with functions similar to a CDP. But unlike these types of projects, CDPs are designed specifically for marketing and contain a lot of extra features, such as database creation and management, business intelligence, analytics and more. Creating a similar solution from scratch would mean a huge investment in budget, time and risks.
A customer data platform is not a delivery platform. We call systems that interact with the user in the different channels "delivery platforms", for example, the email marketing software, the web page, the social network management platform, etc. These systems are not part of the CDP, but interact with it to send messages and collect data.
A customer data platform is not a data management platform (DMP). DMPs are designed to show ads and allow retargeting campaigns through cookies. They focus more on anonymous segments and categories than on individual users, and normally the information they contain expires after 90 days (the cookie's lifetime). In contrast, CDPs create persistent client profiles and store all the information of a single user in a single record.
A customer data platform is not a data warehouse. Normally, data warehouses are created and managed by IT teams, that is, by technology experts who do not have to know about marketing. To resort to the data stored there, the marketing team has to resort to the IT, which generates bottlenecks and frustrations. In contrast, CDPs are designed so that the data is easily accessible and in a format that is useful to the marketing team.
7 key benefits of customer data platforms
They provide a unique view of the customer. Customer data platforms are specifically designed to collect data from a wide variety of sources, unify them in a complete view of the client in all devices and channels and then make them available to other systems.
They allow companies to be more competitive. According to the recent Forbes study "Insights / Treasure Data", the vast majority of marketing executives (93%) believe that the use and analysis of customer data for decision making and the creation of campaigns will provide them with a substantial advantage when facing disruptive and competitive challenges. In addition, 53% believe that the transparency provided by these platforms will make it possible for their teams to react more quickly to changes in markets or customer preferences.
They are agile. A customer data platform is a tool to create and connect a flexible technology stack that adapts to the behavior of users and changing technological trends. By focusing on the database, CDPs give businesses the tools they need to collect data from everywhere and use it anywhere to create better customer experiences.
Democratize data. The benefits of customer data are not exclusive to the marketing team, but encompass all departments of the company. Business intelligence and customer service, for example, depend on the availability of data to get ahead. CDPs democratize access to all this data in the different departments and points of contact with the client.
Enrich relationships with partners and suppliers. The extended ecosystems of the companies, including suppliers and partners, are among the first beneficiaries of the implementation of a customer data platform. According to the Forbes study cited above, the main benefit of CDPs is to offer more segmented and higher quality interactions with partners and suppliers.
They provide more effective customer and marketing experiences. Nowadays, users use more channels and devices than ever before, and expect to have a unified customer experience in all of them. For example, they negatively percieve seeing an online advertisement for a product that they have already purchased in a physical store. Thanks to the unified customer vision provided by the customer data platform, the company has a complete view of customer behavior that can be used to create a complete customer experience without blind spots. And in turn, improved customer experiences lead to greater loyalty.
Improve operational efficiency. Previously, integrating different solutions and specific tools to view customer data used to consume many resources. In contrast, CDPs centralize customer data with ready-to-use integrations, which saves many working hours. In addition, audience and business rules can be configured centrally and applied uniformly in the different tools.
The 5 customer data platforms best rated according to G2 Crowd
Now that we know exactly what a customer data platform is and what they can contribute to our digital marketing strategies, we will see what specific solutions we can apply. To begin with, these are the 5 CDP tools best valued by users of the G2 Crowd software review platform. All of them have received an average score of 4.5 stars or more.
This tool focuses on offering the client data infrastructure that companies need to be able to focus on their consumers. It allows you to collect, unify and connect your own data from and with more than 200 marketing tools, analytics and data warehouses.
Currently, Segment is the customer data platform used by more than 19,000 companies in 71 countries, including Levi's, Intuit and Time.
In the words of its creators, the vision of Exponea is "a future where online merchants understand their customers perfectly".
This tool is based on combining the management of customer data with analytics, so that marketers can obtain insights and act on them immediately, all within the same integrated solution.
Zaius is defined as a CRM platform and marketing automation created for ecommerce brands.
This solution combines a unified view of the client, automation of real-time marketing and multiple channels and cross-channel attribution. Its goal is to empower B2C marketers to multiply repeated purchases and maximize the customer's lifetime value, without the need to turn to the IT team.
Hull is a customer data platform designed to allow the sales, marketing and customer success teams to understand the entire journey of the customer and to use the customer customer stored in silos in a unified way. The objective is that the different departments can share the same information and work in harmony.
Indicative is a behavioral analysis platform designed to help marketing and product teams optimize user interactions, conversions and loyalty. It offers a unique view of customer behavior at all digital points of contact, including web, app, marketing automation, support systems and data bases and warehouses.
Among its advantages, its creators emphasize the ease of configuration, since it does not require programming or SQL knowledge.
How to use customer data in your marketing campaigns
- Journey Map. Track the data of customer journey through different devices, from the first contact with the brand to the conversion.
- Google Analytics. According to Nielsen, brand websites are the second biggest factor for determining consumer confidence in the brand, just behind the recommendations from friends and family. So get your hands on the job to clean up pages and inactive links, solve loading problems and make sure you have Google analytics fully integrated.
- Cart abandonment rate. This metric reflects the quality of user experience of your web. Ensure high quality UX by minimize abandonment rate. Evaluate the measures you have been taking to improve your website and what effect they have had over time. What are your next steps towards continuous improvement?
- Customer opinions. Consumers rely on recommendations from friends and family. It’s in your best interest to make it very easy for them to leave comments and ratings. You should also monitor user opinions on Amazon and social networks (with tools such as social mention).
- Sales data per customer. This metric gives insights to sales trends. If you analyze the behavior of your loyal customers and cross that data with product sales, you will be able to see which products work best and take advantage of this information for your promotional marketing campaigns.
How to use customer data marketing in your pricing strategy
When we hear "customer data marketing", we tend to think of large corporations with limitless budgets. But if you manage your firm through cloud-based platforms, chances are that the information you need is already within your reach. Sales data, customer profiles, inventories, orders, suppliers ... in short, you have all that is needed to see if you have managed to meet your KPI's or how to get on track to reach them if it's not the case already.
Take advantage of customer data for your promotional campaigns in the following areas:
- Formulate your pricing strategy. Promotional marketing campaigns are characterized by the abundance of discounts and flash sales (for example, on Black Friday). To formulate the right pricing strategy, you must be able to calculate the destination cost of the products (including transportation, customs and warehouses) in advance. customer data marketing allows you to know the precise cost at destination of each of product. It enables accurate calculation of margins so you can make attractive offers to end users and see profits sore.
- Further considerations for pricing strategy. Before setting the pricing strategy include cost-per-order, conversion ratio, and returns into calculations.
- Optimize you relationship with suppliers. If you have full data on the prices and margins you get from each supplier and product over time, you will be in a position to negotiate more successfully.
- Demand and inventory scheduling. Analyze your stock reports to see when you have had inventory problems and why. Automate orders to suppliers to minimize the risk of finding yourself without stock. One less thing to worry about!
How to leverage your marketing and promotion metrics
Let's focus on two big channels: Google and Social Media. Google's got news that you can’t miss in your promotional marketing campaigns; we’re now able to connect physical sales with Google searches or clicks in AdWords.
According to CNN, banks and financial service providers are sharing encrypted information with Google about credit card purchases, which are then cross analyzed with user profiles in Google. Due to privacy laws, it is not possible to share individual user data, but you can find out generally how many customers clicked on one of your ads and ended up buying your offline product.
The next step is to keep connecting these data with information about your customers to get an even clearer view of the ROI of your marketing campaigns.
As far as social media is concerned; conduct a social media audit before promotional. This way you’ll be able to see which platforms work best in terms of customer profiles, geographic areas and products. Thus, you will be able to maximize the investment in advertising in social networks.