Exploring Data Solutions: Do You Really Need a Customer Data Platform?

September 28, 2023

Overview

As technology continues to shape the world we live in, businesses are finding it increasingly difficult to keep up with the ever-growing amounts of consumer data generated. Enter Consumer Data Platforms (CDPs), enabling businesses to manage and leverage their data more efficiently. CDPs can help brands to personalize their marketing efforts, improve customer experiences, and increase revenue. However, not all brands may be ready to utilize a CDP.

First: What is a CDP?

A Customer Data Platform (CDP) is a sophisticated application designed to collect and consolidate customer data generated across a range of organizational touchpoints and channels into a centralized database. This platform provides essential data unification, identity resolution, analysis, and activation functionality.

As a result, marketers and customer experience teams can gain a complete, holistic view of their customers through a “golden record” or “unified customer profile.” By leveraging the segmentation capabilities within a CDP, businesses can deliver hyper-personalized, data-driven consumer engagement across multiple marketing channels, enabling them to improve customer experiences and drive revenue growth.

What Does a CDP Do?

CDP functionality typically includes:

Data Ingestion: A CDP is capable of ingesting customer data from a wide variety of sources, including marketing, sales, and product systems, such as CRM, web and mobile app logs, email marketing, eCommerce, IoT, and more.
ID Unification: With the ability to unify customer data under a single, unique identifier, a CDP enables the creation of a comprehensive profile of each customer. This includes the products they purchased, web pages viewed, and ads clicked while resolving duplicate profiles by combining them into a single, streamlined profile.
Segmentation: CDPs employ rule-based models or advanced artificial intelligence (AI) and machine learning (ML) techniques to analyze customer data, identifying critical segments based on common attributes.
Customer Data Analytics: By utilizing machine learning recommendations, affinity, and predictive scoring, a CDP can provide comprehensive customer data analytics to uncover trends and correlations, offering a better view of the customer journey across channels and devices.
Reporting: Customized dashboards provided by a CDP offer critical insights on customer profiles, targets, segments, journey maps, and more, enabling businesses to make informed decisions based on customer data.
Activation: A CDP provides real-time customer profile data to marketing systems to deliver personalized, targeted experiences across all channels and devices, creating a cohesive and effective marketing strategy.

Sounds Great, But Do You Need a CDP?

While a CDP clearly brings value to an organization, it isn’t necessarily for everyone. Or more specifically, it isn’t for everyone yet. In a crawl/walk/run methodology for data, a CDP is in the “run” portion.

You do not need a CDP if:

All of your audience management needs are handled with a system of record for individual customer profiles.
Your marketing technology stack is limited, and you don’t have a lot of different technologies to capture customer data and deliver unique customer experiences.
Your customer data is simple and easy to unify and analyze.
You do not understand your data sources and how you want to act on them.

Other options in the crawl and walk categories allow clients to have a universal client profile with all of the data overlays for unique or dynamic experiences across channels without the pricing or time intensity to manage.

One ready-to-use alternative for many brands is a Customer Data Repository (CDR). Similar to CDPs, CDRs provide a holistic view of customers and their interactions with the brand. CDRs are also driven by data and enable communications that reach customers at relevant moments via their preferred channel to drive desired behaviors.

Free Resource: Customer Data Solution Readiness Checklist

Tandem Theory supports clients across customer data and technology needs including solution vetting, implementation and segmentation strategy.

Need help deciding if a CDP or CDR is right for you? Reach out at hello@tandemtheory.com.

Ready to move forward with a customer data solution? Ensure it is set up to successfully meet your organization’s needs:

Access our Customer Data Solution Readiness Checklist here.

Let’s Talk About You.

Every brand has unique challenges, goals, and opportunities. We want to hear about yours, and see if we’re the right fit to help you reach your marketing goals.