The value of data (and what you’re losing) without a composable CDP

As companies emerge from over two years of uncertainty, many are looking to re-establish their footing in a marketplace primed for recovery. To stand out from the competition, organizations must continue doing what they can to understand consumers and use that information to create unique customer experiences.

A consumer data platform (CDP) allows organizations to create a unified view of what customers want and need. In addition, they help companies more efficiently use their marketing dollars by showing them where they can find the most value for their investment.

What is a CDP?

Customer data platform software pulls together information from different company touchpoints, then collects and structures the data into individual customer profiles. To make the traditional CDP model work, organizations must commit to designing a single customer data resource within one solution. CDP data helps companies create marketing campaigns tailored around the experiences of customers.

One of the biggest problems with that approach is that the information collected remains separate from other customer data, keeping it outside any internal governance and controls. That increases the amount of information held within your data stores, increasing potential security and privacy risks.

Many companies end up not pursuing the establishment of a CDP because they take a long time to implement, at least six months or more. Other drawbacks to the traditional CDP model include:

• Lack of clarity around who owns the data source
• The potential of replicating customer data in different systems
• The additional expense involved in maintaining two separate databases
• Hard to work the CDP into existing marketing and data workflows

What makes a CDP “composable”?

Composable CDPs let you incorporate your existing customer data to create an integrated customer system. That way, you avoid building yet another siloed database to maintain. Instead, you can develop your CDP around your current data warehouse, which limits any additional exposure to security or privacy risks.

In addition, creating a composable CDP lets you build a scalable data architecture that adapts to the growth of your business. Establishing a composable CDP within your organization enables you to create a unified customer service analytics platform to help drive digital traffic and revenue.

Your organization can reduce the manual work required to build and maintain new data pipelines. A CDP also opens up opportunities to use data to set up targeted experiences for different audience segments. Other capabilities you inherit from a composable CDP include the ability to:

• Securely collect data on user engagements from different customer journey touchpoints
• Format data to use in other connected business applications
• Set up consent and privacy requirements in one space
• Activate data within specific channels to help individualize customer experiences
• Create views of customers using data from other business systems

The role of machine learning and AI in a composable CDP

CDP solutions with AI and machine learning (ML) capabilities help organizations collect, clean, and standardize customer data from different outlets. That way, finance areas understand where the value is in marketing spending. In addition, AI helps organizations gain unique insights from customer data to help transform the customer experience.

Organizations can leverage AI and ML-enabled CDPs in the following ways to improve customer data quality:

• Set up pipelines to ingest raw data from any source without requiring complex data prep
• Arrange data in ways that separate raw data from that already set up with established business definitions
• Alert users to changes in the data
• Automatically organize data by data types like customer attributes that define customer attributes and behavior.

After establishing a data warehouse using a composable CDP, organizations can use that information to set up actions to bring about tangible results. For example, a company could institute algorithms that review customer information to calculate which ones are most at risk for churn. That gives marketers the information necessary to craft campaigns targeted at those consumers.

Without composable CDP, organizations can get bogged down in spreadsheets containing thousands of customers. That makes it harder for the finance department to quantify the value of dollars in the marketing budget.

CDPs handle the manual work that goes into setting up churn scores for different audience profiles, then make the data available to marketing professionals. As a result, they have the information necessary to justify any additional investment in targeting audience segments within specific channels.

Enable the Full Power of Data With a Composable CDP

The Lytics customer data platform lets marketers use real-time data to create customer journeys reflective of the consumer experience. Learn more about Lytics can help your brand thrive in today’s digital marketplace.