Customer data platform
What is a customer data platform?
A customer data platform (CDP) is a tool that captures, stores and creates unified profiles for customers. This allows companies to see what their customers are doing on their websites and apps, often holistically across multiple platforms, with a single view.
The CDP Institute defines a customer data platform as software that manages and maintains a persistent and holistic customer database that is transparent and accessible by other software and systems.
In simpler terms, a CDP collects, organizes, and shares data from innumerable and diverse data channels. The platform provides all employees accessible, immediate, real-time views of their customers:
- Accessible: Works with the everyday software all of your employees use -- from marketers to analysts.
- Immediate: Can be accessed directly from your team's software.
- Real-Time: Data is constantly being collected, updated and organized with little-to-no wait time to improve the customer experience.
The benefits of CDPs
Customer data and information are being created, collected and stored at an exponential rate. CDPs are the most efficient and robust way to keep track of the large amounts of customer data that is constantly accumulating. CDPs also eliminate ambiguity when it comes to how to leverage data to make confident decisions.
One of the major players in the CDP industry is Zaius, Optimizely's newest acquisition. Per Justin Annovick, Chief Product Officer of Optimizely, "The value that a platform like Zaius brings to Optimizely customers is significant. For one, it will allow customers to capitalize on the essential ABC's of data: data on asset, data on behaviors and data on customers. As importantly, instead of wasting hours on data pulls and custom data integrations, we've completely elevated our ability to further integrate our DXP, helping our customers by adding layers of context and insight to the data they're swimming in every day."
Zaius' proprietary product, like many other CDPs, works with an omnichannel structure including on-site personalization, SMS, email, advertising and social media.
This type of data-driven marketing requires the ability to track and target your customers during every stage of their buyers' journey. CDPs allow you and your teams to holistically automate this task via four processes.
How a CDP works
There are four concurrent processes underlying every CDP:
1. Data collection
Data collection is key. Customer data comes from all types of sources these days, including your own privately owned channels (e.g., landing pages) and contracted, third-party channels (e.g., data you purchase).
CDPs collect customer data from almost any program you use, including your email campaigns, payment systems, support tools and customer relationship management (CRM) tools.
2. Data governance
It is imperative to streamline your data collection. CDPs help you ensure the data collected is legitimate using common, open-source and proprietary data standards.
Your CDP can assess and categorize the reliability of incoming data. Why does this matter? One ZoomInfo report found that 62% of companies in the U.S. rely on marketing data that's up to 40% inaccurate.
You can set and create quality rules to block access to data not meeting your quality standards. CDPs can rectify and transform data that has been improperly named or miscategorized. The platform can also be set up to restrict access to certain data based on customer privacy rules.
Governing and assessing the quality of the data collected in the previous phase ensures your team uses or makes intelligent decisions based on the most accurate data.
3. Data synthesis
Your CDP will segment customer data into groups for easy access and evaluation by everyone in your company. Customer segmentation allows you to create and update customer profiles based on real-time data. It also offers an opportunity to evaluate analytics derived from the categories you've customized on your CDP.
Your CDP is always synthesizing data. It can identify existing customers in these anonymous profiles by searching for different shopping patterns. The anonymous data can then be seamlessly integrated with the existing customer's data, creating a more complete customer profile. This capability provides insights on lead generation and retargeting.
4. Data activation and access
CDPs work best only when they are established as the central hub for all of your company's customer-related software. This requires the CDP to connect to all software involved with customer communication, sales and analysis, such as:
- Social media accounts
- Email campaigns
- Website and landing pages
- Online ad campaigns
- SMS and MMS
- Data analysis and visualization tools
The goal of a CDP is to organize all your data on one platform, making it accessible to employees working on different teams and using different types of software.
How CDPs are different from existing marketing software
A CDP is a database tool that consolidates all of the data created by other applications.
Most contemporary marketing software was developed in the past 20 years, as customer needs and expectations have shifted dramatically and grown more sophisticated. Customers were shopping at brick and mortar locations, now they are mostly shopping online, more so than ever due to the COVID-19 pandemic.
Homogenized marketing campaigns -- by snail mail, for example -- are no longer as effective as they once were. Email campaigns, social media and personalization have become game changers in improving engagement with consumers.
Omnichannel tools such as CDPs bundle all of your existing software solutions and data together, creating a one-stop shop.
CDPs can benefit everyone in your company
A robust CDP can help you get a complete view of your customers and create unlimited audience segments from your data. It acts as the command-and-control hub for your entire operation, streamlining analytics and helping you create campaign strategies to turn your anonymous shoppers into loyal customers.
The ideal platform integrates seamlessly to collect, govern, synthesize and share customer data with any employee, leading to efficient data collection and offering higher value throughout your customer lifecycle.
Developing optimized digital journeys with a CDP
With the Optimizely Data Platform (ODP), we provide the power to coordinate, understand and engage with your customers, allowing them to truly unlock their digital potential on their customer journey and helping them be more confident in their decision making, enabling them to be more predictive, rather than reactive.