A CDP is marketing technology that brings customer data — both online and offline — into a single location, streamlining analysis, testing, targeting, and other marketing-related activities. It provides the right data at the right time to provide personalized experiences across channels and interactions.
This is achieved through a five-step process: the capture, collection, and analysis of data; creation of unified profiles; segmentation; prediction and testing; and activation/personalization. Together, these provide a seamless customer experience.
There are three main reasons why a CDP is a good choice for any business: it is a purpose-built marketing tool that allows even non-technical marketing staff to engage with data; it will prepare your website for data collection changes that will arrive with the loss of third-party cookies; and it will meet or exceed the expectations of increasingly sophisticated customers.
A CDP is a purpose-built marketing tool. Unlike earlier methods of gathering data from legacy systems, the CDP is all about converting data into actionable experiences for customers, whether it is serving content, providing a discount, or remembering their purchase history through the lifetime of the customer relationship. It is not numbers for numbers sake, but for helping customers and earning their ongoing loyalty.
Third-party cookies are already on the decline with the inclusion of “do not track” technology on iPhones, and Google Chrome, Safari, and Firefox’s stated intention to stop supporting them as of next year. These data trackers from outside domains provide information on engagements, customer behavior, and analytics that have traditionally been critical to making decisions on how content and products are positioned online. While third-party data comprises much of the siloed, hard-to-interpret data that marketers currently encounter, it will still need to be replaced to accurately understand customers.
Consumers are more sophisticated and expect better. The seamless digital experiences of giants like Google and Apple have changed consumers' expectations. They expect the same seamless interactions from government, nonprofit and small business websites. It is the new norm for how the web works.
A CDP can prove beneficial to both internally and externally. Within the business, time saved on currently-arduous data collection, organization, and interpretation processes and/or on tasks like profile reconciliation can instead be spent on analysis, testing, and personalization — all activities that can have a direct impact on the bottom line.
It is this opportunity for personalization that provides the clearest external benefit. According to Boston Consulting Group, “Two-thirds of [survey] respondents said that they expect at least a 6% incremental annual revenue lift from personalization with companies in several sectors...anticipating increases of 10% or more.”
Personalization has such a strong impact because of the individualized experience it offers customers, generally along two paths: recognition and help. Recognition includes things like knowing who the customer is, what their past interactions and purchases have been, and what they value. This kind of personalization is increasingly becoming a norm, though one that can be time-consuming to achieve without a CDP.
Help-based personalization is the next phase of the relationship-based customer approach that a CDP helps achieve. The kind of help a CDP can help provide includes direction to relevant products, new information, and targeted special offers. This attention to past interactions and focus on individualized value boosts customer confidence.
In the words of Kartik Hosanagar, a professor at the Wharton School, “We find that personalization systems can change who are the winners and losers in terms of the market share battle.”
As customer expectations for a consistent online experience and data privacy continue to grow, a CDP is increasingly going
to become standard for customer-facing websites across many areas of business and government.
With roughly a year of lead time before the end of third-party cookies, and marketing data as it has always been, the time to explore a CDP is now, to avoid lapses in information gathering as support for third-party cookies goes away.
Making a switch of this magnitude is, of course, daunting, but the benefits of developing a streamlined marketing program will prove worthwhile. Marketing teams can spend less time downloading and organizing data and more time activating customer relationships. Technical staff will
spend less time focused on supporting marketers, allowing them to take on other priorities. Strengthened customer relationships, bolstered by seamless transactions and data transparency, will have a noticeable impact on ROI.
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