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Unity has been a buzzword in 2021, and not just in the political realm. In the world of loyalty, engagement and customer experience, more brands are looking at establishing a Customer Database Platform to unify zero-, first- and third-party customer data from various sources into a single, comprehensive view of the customer across devices and channels.
A CDP is a platform that stores customer data, but Patrick Tripp, SVP of Product Marketing at Cheetah Digital, offers a more expansive definition, describing it as an important tool of the data-centric marketer, with five distinct capabilities.
“They can ingest data from any source, capture the full detail of ingested data, or store ingested data indefinitely, subject to privacy constraints,” Tripp says. “But CDP’s also create unified profiles of identified individuals and share that data with any system that needs it.”
Renewed Interest in this Type of Platform
Brian Slitt, Chief Revenue Officer at Prizelogic, says with increased challenges in collecting online data — countered with the increased need for brands to collect their own first-party offline data and the need to have data flow in and out of platforms — a CDP becomes extremely valuable to collect, manage, analyze, and action on all these data touchpoints.
“A CDP connects disparate online and offline consumer data sets into one unified platform for a brand to make actionable,” Slitt says.
Prizelogic CEO Ryan LaMirand says changes in consumer privacy legislation and the death of digital ID’s like cookies and Mobile Ad ID’s are driving the urgency for brands to develop stronger direct-to-consumer relationships and data points.
“Compound this with the fragmented landscape of consumer touchpoints, and it’s very complex for a brand to successfully manage and create value from their data without a CDP solution,” LaMirand says. “As I’ve always said: data is not creating value if it’s just sitting on the shelf.”
Pete Thompson, Chief Product Officer at HTK, says at their most basic level, CDPs offer a solution for unifying data from multiple, siloed sources and doing something with it, although he says that something still isn’t particularly well-defined.
“There’s a growing need among marketers to generate deeper customer insights and apply them, in the moment, to individual customer interactions,” Thompson says. “As physical locations reopen and consumers transition back to a combination of in-store and online shopping, marketers are looking for ways to create personalized experiences that remain consistent across channels. And joined-up data is the foundation.”
Beata Kovacs, a Senior Marketing Consultant at Evolving Systems, highlights the capability of CDPs to store and manipulate large volumes of structured or unstructured data and provide a single view of the customer across all touchpoints and activities – not limited to loyalty initiatives.
“Customer usage journeys are becoming both more characteristic and more complicated,” Kovacs says. “Handling and analyzing all possible data in an optimal way is how to ‘know your customer’ and enable communications and offerings to be highly personalized.”
Benefits of Incorporating a CDP into a Brand’s Marketing Workflow
LaMirand says Prizelogic believes loyalty solutions need to continue to evolve beyond simple transactional buy/get systems and incorporate additional engagement opportunities to establish and foster deeper emotional connections to the programs and brands.
“A CDP solution is a great way to benefit from this larger, diverse data set to optimize both loyalty programs and their engagement components for optimal consumer impact,” he says.
There are numerous benefits to incorporating a CDP to enable a brand’s loyalty and customer engagement initiatives, Tripp says, as CDPs take the data gathered by marketers and show a full picture of the customer they’re marketing to.
“They’re taking the guesswork out of who you’re marketing to,” he says. “Unfortunately, the CDP falls short at the ability to activate that data to truly personalize that customer’s experience.”
In theory, the benefit of a CDP lies not so much in unifying data, Thompson says, but in what the platform can do with that data once it’s all in one place. Unfortunately, he says that can vary significantly between different solutions.
“The high-level benefit is more personalized experiences - the ability to analyze data in real-time, identify “next-best” actions for each customer, and automate engagement on the appropriate channels,” Thompson says. “The specifics will depend on the platform’s capabilities.”
That’s why he says it’s really important that marketers start by identifying the most important interactions and experiences they could deliver for their customers.
“Then they can look for solutions that deliver on those use cases,” Thompson says.
Customers want relevant communication in terms of time and offerings, Kovacs says, and a CDP can ensure that customer behavior and characteristics are aligned, with analyzed data employed to drive targeted CVM and engagement initiatives.
“A single customer view would facilitate harmonized contact with customers across all activities; it would help to segment and design new initiatives, and the ability to analyze customer journeys would aid a seamless, optimized customer experience,” Kovacs says. “Data learned from experience would allow us to predict future behavior and develop campaigns accordingly, and to maintain an umbrella view of social needs and preferences of customers.”
Potential Disadvantages and Concerns of a CDP
A lot of vendors call their platform a CDP, but Thompson feels there’s little consistency or agreement around what the term actually means. Instead, he says CDP has become a bit of a bandwagon term, a catch-all for platforms that do something with data — and the danger is that buyers end up purchasing products that aren’t right for them.
“What are the defining characteristics of a customer data platform?” Thompson says. “Looking at the marketplace, it can be difficult to tell. This makes it hard for a buyer to shortlist the vendors that are really going to help solve their problems.”
Tripp says many CDPs can’t show that they easily take data and activate it for customer engagement strategies. He says that while CDPs claim to be holistic solutions for gathering data and presenting a unified view, they fall short at actioning on that view.
“That’s because many CDPs are IT-driven data environments that lack the business use cases that can make them successful for marketing campaigns,” Tripp says. “They ingest various data types but rely on costly and time-intensive integrations to deliver value.”
In theory, they sound like comprehensive solutions, but in execution, he says CDPs are failing the marketer.
“Marketers cannot personalize campaigns to a customer without manually accessing data from various systems,” Tripp says. “If you want to evolve from being a data-centric marketer to a customer-centric marketer, what you need is the Engagement Data Platform.”
Kovacs says one concern must be around data protection and privacy. Brands need to seek permission for data collection, and operators need to offer a return for this information sharing.
“In addition, data collection must be targeted; indeed, too much data could be overwhelming and not relevant for usable results,” she says. “Care must also be taken to ensure there is no loss of data in the reporting process.”
LaMirand suggests that if you ask a lot of brands if they want a CDP, they will say yes, but the tricky part is in the execution. Not all organizations are set up with the people and processes to support the technology.
“CDP solutions are built around great technology and the teams that can help you utilize this effectively to turn data into action,” he says. “Be wary of solutions that are all software or all services; it might be some time if ever before you see great value from your investment.”
Technology Meets Data Architecture – CDPs Drive Real-Time Responses
Thompson says that the risk of batch updates — rather than real-time — is that the resulting interactions may not take into account the customer’s latest behavior. At best, he says, this makes the journey feel disjointed; at worst, the customer ends up frustrated and less loyal to the brand.
“A customer who’s just made a complaint doesn’t want to see an email asking them to review their latest purchase because it feels like the brand isn’t really listening,” Thompson says. “And a customer who’s just purchased an item from their favorite product category will likely be less-than-pleased to receive a ‘personalized’ discount on that category the next morning.”
LaMirand says there is nothing wrong with these ingestion methods, but the ability to also ingest real-time data and respond in real-time is increasingly important.
“The caveat here is that not all real-time data should be used in real-time for quality/fraud reasons,” he says. “This is where technology meets data architecture services to maximize your data’s actionable outcomes.”
Tripp says amassing large amounts of data is useless if the marketer can’t do anything with it — or if the marketer frequently needs the involvement of IT to make use of that data.
“Marketers need a platform that takes data, transforms it into a holistic view of a customer, and then enables them to create campaigns that truly connect with a customer with deeper personalization in real-time, at scale, across multiple channels,” Tripp says.
In the digital era, Kovacs says we must embrace the need for immediate action, facilitated by real-time data, to seize momentum in order to influence customer behavior. Also, as purchasing routes are on various channels, they can be stretched throughout time; real-time supports shorter decision time and accelerates purchases.
“Real-time knowledge can ensure offers are relevant, contextual, and timely,” Kovacs says.
Enhanced Predictive Capabilities in CDPs
LaMirand says a CDP can help brands need to facilitate next best offer, next best product recommendations, audience recommendations, personalized communications, lifetime value of a customer, and churn analysis, among others.
“When it comes to consumer engagement, data quality and fraud mitigation are critical. Garbage in, garbage out,” he says. “If handled poorly, your predictive capabilities can amplify your exposure to fraud vs. paying customer outcomes.”
In many ways, Thompson says it depends on the brand and their use cases - but broadly, marketers should be looking for a platform that incorporates AI and machine learning into its data analysis.
“Whether it’s to predict churn risk, a propensity to purchase, discount sensitivity, or any number of other behaviors, will depend on what the business is trying to achieve,” he says. “But if you’re investing in a platform for the long-term, you should be looking for AI-powered insights - and the ability to apply them in real-time.”
Tripp says it’s important to build valuable relationships with the people you’re marketing to. Unlike many CDPs that focus on anonymous third-party data, he says brands need to make sure they’re CDP collects and uses first- and zero-party data.
“The reality we face today is that customers are concerned about data privacy, as well as increasingly strict regulations and governance rules on data, and marketers have a complex world to navigate,” Tripp says. “If you collect data that is intentionally and proactively given to you by the consumer, zero party data, and combine it with first-party data into a single customer view, you can now build content and messaging that is personalized to what you know each individual consumer truly wants, because they told you, not because you inferred it.”
Thank You to our Expert Panel:
Patrick Tripp, SVP of Product Marketing at Cheetah Digital
Learn more at cheetahdigital.com
Ryan LaMirand, Chief Executive Officer at Prizelogic
Brian Slitt, Chief Revenue Officer at Prizelogic
Learn more at prizelogic.com
Pete Thompson, Chief Product Officer at HTK
Learn more at htk.uk.co
Beata Kovacs, Senior Marketing Consultant at Evolving Systems
Learn more at evolving.com
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