What is a CDP?
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To start, let’s take a look at the Customer Data Platform Institute’s definition: "A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems". Well, to qualify as a CDP, a customer data platform should satisfy the main capabilities of the CDP Institute’s definition. Gartner’s Market Guide for Customer Data Platforms 2020 recommended that the product must feature a web-based interface that enables data collection, profile unification, segmentation, and activation. Drive unforgettable customer experiences with Sitecore CDP
To start, let’s take a look at the Customer Data Platform Institute’s definition: "A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems".
They break it down as follows:
This definition paints the CDP as a dynamic multi-tasker, tirelessly working behind the scenes to manage, process, and convert various data points into meaningful customer journeys.
But, as David Raab, head of CDP Institute points out, not all CDPs are created equally. Differences that exist between CDP products include: the types of data they ingest, how they unify customer identities, the support they provide for real-time updates and queries, and ancillary capabilities such as machine learning, customer segmentation, message selection, and campaign management.
As we’ll see, the CDP has been evolving for some time, refining and improving its processes to meet (and exceed) the ever-changing expectations of customers. Managing and integrating customer data is key to this evolution. To explore strategies that can help optimize customer data management, check out this helpful resource.
How do you know if a CDP really is a CDP? Well, to qualify as a CDP, a customer data platform should satisfy the main capabilities of the CDP Institute’s definition. The following are some of the basic ways CDPs work:
Now, let’s take a closer look at how the features work together to allow marketers to deliver outstanding customer experiences. Gartner’s Market Guide for Customer Data Platforms 2020 recommended that the product must feature a web-based interface that enables data collection, profile unification, segmentation, and activation.
Gartner defines data collection as: “the ability to ingest first-party, customer data from multiple sources, online and offline, in real time and without storage limits. Data persists as long as needed for processing. This includes first-party identifiers, behaviors, and attributes.”
As the single source of truth across an organization, one of the most important functions of the CDP is its ability to consolidate profiles and connect specific attributes to specific identities. This means identifying individuals, cleaning data, and linking multiple devices to that single individual.
Once data is collected, it is assigned to a segment within the CDP. Each segment contains a subset of users that share common demographics, customer behaviors, attributes, or transactions. Here are the most common segmentation use cases:
The decisioning function within the CDP uses rules and predictive modeling to make smart decisions about the best customers to talk to, the best things to talk to customers about, the best channels to talk to customers, and the best time to talk to customers. Marketers can target customers within specific segments with relevant offers – one example is highlighting new or similar products to customers who have previously purchased an item or product from a particular brand.
The final step is the activation process, which involves sending segments (with instructions on activating them) to engagement tools to trigger email campaigns, mobile messaging, and social media campaigns.
Companies are having to raise their digital customer experience game like never before, investing heavily in upgrading their martech stack in order to adapt and survive. In a webinar with Sitecore, Scott Brinker, editor of chiefmartec.com, discussed the pandemic’s impact on the traditional rules of marketing.
To meet new and emerging demands, he advises companies to focus their attention on centralizing, automating, and humanizing everything they do while embracing continuous change as they do it.
Sounds like a complicated balancing act, right? This is where CDPs are designed to sift through data, mold it into personalized marketing campaigns, and offer your customers experiences that truly resonate. With digital marketing, marketing automation, and personalization processes accelerating at an unprecedented pace, there really is no better time to embrace the CDP.