Ingest, transform, extract: Why agile data teams put CDP at the core of their modern data stack

When it comes to data, many organizations are stuck. They want to leverage the incredibly massive amounts of data they collect about customers. However, the data are inconsistent, stored in silos across the organization, and unwieldy.

That’s why more organizations are turning to a customer data platform (CDP) as the core of their technology stack. With a powerful CDP like Lytics, organizations can ingest, transform and extract data in ways never before possible. The impacts of a CDP can deeply change the way organizations think about customers, drive major increases in revenue and forge deeper connections internally.

CDPs: Modern tools to understand customers and leverage data

A CDP is a software-as-a-service platform that helps teams use, combine, store, analyze and deploy customer data. They are used for multiple purposes, but perhaps their most valuable is providing a single, unified view of customers.

By harnessing, combining and using data from multiple sources, a CDP can stitch together disparate information from across the enterprise. With higher confidence in and more details derived from data, marketers and others can better predict customer behaviors and personalize messaging. That difference is significant for organizations that have often had to rely entirely on IT teams to sort, connect, extract, and deploy data on behalf of marketing colleagues.

By empowering marketing teams, CDPs allow for better flexibility, faster activation and increases in data usage. That’s not to say that IT is fully extracted from the management and use of CDPs. Instead, it allows IT to focus on higher-level areas such as policy and data security.

Most CDPs perform the following core functions:

• Data ingestion in real time from all sources
• Capturing all details from the data that’s ingested
• Storing data indefinitely
• Sharing data with other platforms that need it
• Creating unified customer profiles based on the data collected

While capabilities can differ from vendor to vendor, there are some core capabilities available in most, including:

• Marketing Automation and Acceleration. Marketing departments are the main users of CDPs. They use the capabilities to develop personalized marketing campaigns and deeper, more complete customer profiles
• Data Management. The CDP solution should foster the collection, integration and storage of data from multiple platforms. As the collection of data shifts from second-party sources to first-party sharing, the importance of data has never been greater
• Data Unification. With data coming in from multiple sources, both structured and unstructured, there’s a greater need for unified integration. A CDP allows enterprises to integrate and use data from disparate sources with confidence, with a single ID that connects each profile to data from various sources, both inside and out of the enterprise
• System Connections. One of the core benefits of the CDP is to provide data and system connections in enterprises that previously were highly siloed. Those earlier structures create high degrees of inefficiency with data being stored and used differently throughout the company. With unified data and systems, every department, not just marketing, can better understand and use data that captures the full customer journey. For B2Cs, this functionality can be a game-changing technological breakthrough
• Data Hygiene. Sound data practices require rigor into the cleanliness of data throughout the enterprise. With strong data hygiene capabilities, a CDP can ensure that data are cleaned and customer records are standardized
• Multi-Sourced Data. Structured data, which is defined by defined values, is becoming increasingly small as a relative percentage of available information. Data today include product photos, reviews, social media posts and customer service experiences. All of this unstructured needs to be incorporated into customer profiles and today’s CDPs are built to do just that

Why today’s data challenges persist

Many organizations aspire to be data-centric, but struggles persist. Marketing teams, for example, do not want to rely on overburdened IT colleagues for urgently needed data analysis and extraction. That’s why 50 percent of marketers reported recently they plan to hire their own data analysts.

Staffs are spending too much time cleaning data, hunting it down and not actually using it. Those inefficiencies drive up costs and underuse skills. Instead of doing the important work of building profiles, personalization, and models, marketers are chasing down and cleaning up information unnecessarily.

The key is to simplify the technology stack and shift to a data- and customer-centric mindset.

A CDP can help reduce data complexity by meeting data where they are. Data inevitably will be stored in multiple systems located within and external to the enterprise. Instead of trying to manhandle all of that data independently, CDPs take the data as it is and cleans it up, allowing for enhanced functionality.

The best CDP solutions today rely on data activation. When data is activated, it is consolidated and can be used for real-time insights. Data activation is a proactive approach that has four main components:

• Collection. Data collection today comes from multiple sources, including A/B testing, blog posts, social media accounts and product reviews. This information often is stored in different ways than more traditional, structured data such as biographical and payment details, purchases and channels used
• Analysis. Available data are collected and analyzed to identify patterns and trends. With more data available from multiple sources, this analysis is deeper, more complex, and more accurate
• Activation. This step puts the data into action. It’s a way to understand how the data provides more insights. For example, the analysis may show that those from a certain region respond better to calls to action that focus on meeting a particular need. Testing can then be done to see whether personalize messages that highlight that need and how products or services address it
• Measurement. At the end of an activation phases, measurement determines outcomes … and provides more data that can be used for subsequent data activation cycles

Data activation helps address multiple challenges. First is the ever-expanding amount of data every enterprise faces. There’s more data constantly being collected and stored. However, according to one IBM study, 80 percent of data organizations collect sit dormant, not being used to build profiles or inform data insights.

Second, a CDP helps unify and empower the workforce. With data stored in so many silos, there’s often a reluctance to share. CDPs can help multiple departments within an enterprise by combining “their” data with that from the marketing department. Sales, customer service and finance teams can all benefit from better data activation.

A recent survey indicated that 85 percent of CIOs want to be considered changemakers. As the role of the CIO gains more importance in organizations, a CDP is a smart choice to drive that change, with data centricity as the driving force. That same survey indicated that tech investments in 2023 will focus greatly on the core facets of a CDP deployment. CIOs reported that data and business analytics (34 percent) were the second-largest area of investment, behind cybersecurity. In third place was application and legacy system modernization.

In addition, a remarkable 68% of CIOs are now responsible for creating revenue-generating opportunities.

The time is now for marketing and IT teams to rethink their approach to the technology stack. A CDP is a powerful investment that will pay off in better profiles, more compelling campaigns, and more revenue.

Measuring impact: How data teams can define success

There are many ways to approach key performance indicators (KPIs) related to data. Here are a few to consider for enterprise data usage with a CDP.

• Ease. Today, teams across the enterprise need to be able to access and understand data quickly and on demand. Consider metrics that track how easy it is for teams to do both – access and understand. Measures can include visualizations deployed and used and self-service capabilities
• Efficiency. Reducing manual work is key in this metric. Consider tracking process automations, predictions and insights deployed and usage, especially by decision-makers. Also measure the speed with which those actions are created and deployed
• Quality. This may be a subjective measure but valuable nonetheless.
• Value Created. For the business, this metric can be new revenue from marketing initiatives. On the customer side, it can be measures of customer satisfaction and experiences
• Problems Solved. How many issues were the data teams asked to solve and how may were?
• Timing. Be sure to measure how many projects were deployed and executed on schedule and how many were or are behind

In addition to data-centric measures, there should also be customer-centric indicators that are tracked. The desire is to create a 360-degree perspective of each customer. Doing so, allows for deeper insights into behaviors, needs, pain points, questions, responses and actions.

Marketing and sales are intrinsically linked. Never is this moreso than when a CDP is deployed that engages the entire enterprise to harness data more fully. Among the core sales and marketing KPIs to use are:

• Net Promoter Score
• Sales volume by channel
• Revenue volume by channel
• Average deal size
• Number of new customers
• Number of repeat customers
• Churn rate
• Customer lifetime value by segment
• Acquisition and retention costs by channel and segment

Lytics helps companies connect data with a powerful CDP platform designed to be at the heart of an enterprise technology stack, helping them leverage the power and revenue potential of their data.