Customer data infrastructure: Why is it important?

Customer data is proliferating at an unprecedented pace. With its growth comes the rise of the customer data platform market, a sector that’s expected to become a $3.2 billion industry by 2025. Enterprises are seeking turnkey solutions as they try to better understand consumer behavior. One modality is customer data infrastructure. Learn why this implementation is such a key strategy in the modern digital sphere.

What is customer data infrastructure (CDI)?

To understand CDI, it’s important to have a solid understanding of customer data in the modern marketing landscape.

Customer data defined

Customer data shows how the customer interacts with your company, with the information logged and analyzed by a marketing team. Customer data comes from a wide swath of avenues and may include:

• The average number of log-ins every 24 hours
• Email newsletter open rates
• Call-to-action response rates
• Google Ad click-through-rates
• Social media mentions
• Retargeting ads response rates

As you can see, customer data comes from diverse sources, and this is barely scratching the surface.

Understanding siloed data

A typical customer relationship management (CRM) tool may provide an overview of the varying data sets. However, each set of data remains in its own silo. Each department may rely on different data. The marketing team may rely mainly on Google Ad clicks, while the HR department solely analyzes inquiries through the contact page. Meanwhile, the sales team focuses on social media engagement. Different departments look at different data, resulting in each department being on a different wavelength, so to speak.

When teams gather, each one has its own conclusions and ideas incompatible with those of the other teams. It leads to confusion, disagreements, and non-constructive debates over whose ideas are best.

Enter CDI

CDI is a way of integrating the segmented data into one cohesive data point that provides a fuller representation of customer behavior. It ensures each department examines the same data, putting teams on the same page.

Why customer data infrastructure matters

CDI serves three primary purposes: data integration, data governance, and customer management.

Data integration

CDI takes customer data from varying platforms and integrates them into a single cohesive data structure. For example, it may take separate data from Google My Business, your subscriber list, and first-time website visits, and create a single point for viewing the now-integrated data in real-time. Every department and remote team sees the same information.

Data governance

Data governance is a framework for ensuring the data is high-quality, reliable, and accurate. Each company must come up with its own practices and policies for sorting, scanning, and cataloging data. This may differ significantly across industries and even within related fields in the SaaS sector.

Customer management

It’s not enough to just use the data as it is. Customer management is about turning the data into actionable information. The way to do that is by creating unique user profiles. The more specific the profile, the better. You can determine, for example, that a high-value user profile is someone who opens at least 50% of emails and logs in to the trial product at least once a day. These are the customers that you spend your resources on to take further along the sales funnel.

CDI is not synonymous with CRM

Customer relationship management systems should not be confused with customer data infrastructures. The two have some similarities, but there’s also a major difference. Both CRM and CDI are useful customer data tools that create user profiles and assist prospects over the course of the customer lifecycle. But CRM is limited to data sets pertaining to identifiable personal information. CDI goes a step beyond: It can leverage data from, say, mobile devices or cookies and integrate it with identifiable personal information for more laser-precise data.

The advantages of a customer data infrastructure

A customer data platform architecture provides key advantages across industries and in B2B and B2C sectors alike. Consider these benefits:

• Acquire a more holistic view of the ideal customer by examining diverse data points centralized in a single dashboard.
• With precise data, SMBs can stay competitive against larger competitors that normally dominate the search engines and social media.
• Collect valuable data during beta or A/B testing of your SaaS product or service
• Share the data with suppliers, joint partners, and sponsors for improved relationships and network-building.
• Develop tailored loyalty programs for increased customer retention and reduced churn rates.
• Have every team examine the same data. This reduces downtime stemming from miscommunication or human error.
• Create more productive software scrums in both in-person and remote meetings.

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