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A modernized guide to learning the customer data platform basics

  • March 24, 2021
  • By Gigi Griffis

I keep a birdfeeder in my backyard in hopes to see my favorite bird – the cardinal. I love attracting all types of birds, but get disappointed because I rarely see cardinals.

Hoping to change my luck, I researched which type of seed cardinals prefer. Turns out I was using a generic seed that would attract a wide variety of birds. Instead, I needed a specific seed that cardinals enjoyed.

Sure enough, I began to see beautiful red cardinals throughout the entire winter.

Marketers have run into a similar problem when interpreting data to identify and convert specific customers. They’re able to reach a wide range of people, but need a more personalized approach in order to reach the right ones.

A man surrounded by specific customer data.

Fortunately, customer data platforms have solved this issue by giving marketers the information they need to communicate correctly with the right potential customers.

So what is a customer data platform? This article will lay it all out for you as simply as possible. Let’s make sure that you’re attracting cardinals from now on.

What is customer data?

To understand customer data, it helps to look at the different subsections of this important information.

Demographic data

Demographic data includes indicators such as age, ethnicity, education levels and employment status. This type of data is a general yet important part of creating effective customer profiles within a customer data platform system.

The number fifty-two etched into a wall.

Behavioral data

Behavioral data is one of the most prevalent and available sources of data collected about customers. Furthermore, it gives in-depth insight that other forms of information does not. The complex, revealing data comes from the ways a user interacts when navigating the web on different mobile devices. Behavioral data details which sites a user visits and what types of applications they prefer.

Identity data

Identity data is in the same general information category as demographic data, but there are a few minor differences. It handles elements such as personal identifiers (name, titles), social media presence and geographic information.

A woman stands in front of a data screen.

It’s important to note that data, including customer data, available to marketers is growing dramatically. Without the right software to handle it, the data gets stored in silos, which don’t offer harmonious experiences to customers throughout different business touchpoints. Fortunately, a customer data platform solves this problem.

What is a customer data platform?

A customer data platform (CDP) is a software system that simplifies the marketing process using in-depth analysis and personalized data. The key feature of a CDP lies in its ability to collect and interpret data in order to create an accurate customer profile.

Who needs a customer data platform system?

A customer data platform has the potential to help a wide range of company teams, but some will benefit from its impact more directly. This tends to be marketers, since their aim is to boost customer relationships and provide superior user experience throughout different steps of a customer journey.

Marketers working with large amounts of customer data will greatly benefit from the superior data collection processes of a CDP, and also the personalized customer profiles the technology creates. Essentially, anyone who has experienced a lacking performance in marketing using customer data in the past needs to take the next step by using a CDP.

A spiral of data.

Lastly, companies subject to different rights privacy laws need a CDP if they’d like to automate their protections against potential errors that result in lawsuits. A CDP unifies data and simplifies the entire process, ensuring that administrators have full control.

Now you may be thinking that a customer data platform sounds similar to a CRM or DMP. Let’s make sure you understand the key differences.

Difference between CDP and CRM

A customer relationship management system (CRM) handles customer data in order to help businesses improve their relationship with customers. This technology is effective in handling a large amount of information and customers, but it does so in a manner much differently than a customer data platform.

Two people reviewing a laptop.

The customer data platform acts in the same vein, but with a much more specific and complex focus. A CDP uses similar data, but with much different purpose and in a unique way. The customer profile built within a CDP provides valuable insight into each customer, and informs marketers of important factors pulled from the data.

Before we breakdown some of the unique CDP benefits, let’s take a look at the key differences between CDP and DMP.

Difference between CDP and DMP

A data management platform helps businesses sort, access and gather valuable information. It gathers data from a wide variety of sources, including from different connections and mobile devices.

Even though they both are marketing-based data systems, there are some big differences between a CDP and DMP, mainly in the way the information is utilized by each system. A DMP, in fact, only can handle a small portion of the entire CDP process. Whereas a DMP collects data and moves it to the desired departments and tech platforms, CDP interprets this data and gives a unified solution to marketers.

Two laptops next to each other.

Now that you understand why a customer data platform stands out among its peers, let’s dive into the different benefits that come with using this modern technology.

Major customer data platform benefits

There are too many customer data platform benefits to list, but here are some crucial ones you need to know about.

Supercharged data processes

A CDP overhauls data processes from so many different angles that it’s a wonder how anyone goes without. The first thing it offers is data collection that shines above other data systems. This is because it centralizes data, making it easier to access and utilize for future projects. It’s clear that both the collection and organization of valuable information is superior when using a CDP.

Next, it makes this collected data more accessible, available and useful to a wider variety of company departments, ensuring everyone is pushing forward effectively and without error.

A fast-moving blur of cars.

Finally, what really stands out is how customer data platforms remove the dreaded data silos many have unfortunately grown so accustomed to. This has many benefits, but the main one is for customers, who receive much stronger experiences as a result.

Hyper-focused customer experiences

The most oft-referenced benefit of better customer experiences resulting from using a CDP are the personalized customer profiles. What pushes them beyond basic profiles of other systems are the in-depth, single customer view profiles that detail someone based on data pulled from all different areas of a database.

A cup of coffee on a paper that reads 'customer experience'.

These profiles not only serve as a way for marketers to provide that customer with a better experience, but also gives them insight into potential future behavior of the customer. The more focused the profiles built, the better the data is utilized. Because a CDP unifies collected data from a variety of sources, users are able to construct a detailed view of specific customers across more channels. This ties into an improved omnichannel marketing experience as well.

A CDP delivers better marketing and customer experiences across the right devices, in the right places and in the right manner. It offers marketers a chance to take a comprehensive approach to the process without making costly errors that turn the customer off.

Improved customer lifetime value

One of the best ways to improve customer lifetime value is to boost and maintain customer loyalty. Fortunately, a customer data platform goes a long way when it comes to keeping customers around.

A person holding a star in front of a window.

This starts with removing the guesswork that often comes from older tech sorting and utilizing customer data. The CDP delivers the most on-point, personalized experience to your customers, giving them plenty of reasons to stay loyal.

Lastly, it’s important to note that many elements of a CDP improve customer lifetime value, though often indirectly.

Seamless operations

The final benefit we’ll discuss is the level of effective company-wide operations resulting from the use of a CDP. This is one of the most overlooked benefits. By having software capable of connecting numerous tools, organizations are able to accomplish important tasks and projects much faster.

An illustration of how CDP works.

A CDP also minimizes potential time-consuming integration implementation and maintenance. The system then manages all information from a single location and applies it to different company technology and tools.

Choosing a customer data platform

Even though everyone’s needs are different, that doesn’t necessarily mean that one CDP system will work for one user and not the next. In fact, there are some clear standout technology features to consider when selecting your CDP.

In order to stay ahead of the curve, you’ll need a customer data platform that uses the latest tech and has innovative features.

Plenty CDP systems are able to do the basics, but that just won’t cut it any longer. Make sure that when you select your customer data platform system, it focuses on data science, seamless integrations and other customer-driven factors.

Lytics data interface.

This is why marketers overwhelmingly prefer the intangibles Lytics offers over the competition – their features are designed to push the envelope of what modern tech can offer. With things like artificial intelligence, the Lytics CDP system has given marketers the most precise versions of customer profiles.

Closing thoughts

Just as I couldn’t please the cardinals without the right birdseed, marketers won’t please customers without the right customer data platform system. Make sure that whichever CDP you choose breaks free from convention and moves you forward.

For more information about this powerful marketing tool, check out our customer data platforms marketer’s guide.

Gigi Griffis

Gigi Griffis

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