What Are the Advantages of a Customer Data Platform?
B2B companies that can handle customer data have a clear market advantage. But for most companies, customer data languishes in isolated data silos. The secret weapon to breaking down data silos and redefining customer relationships is called the Customer Data Platform (CDP).
What Are Data Silos and Why Do They Occur?
A data silo is an isolated group of data that remains under the control of one department and is isolated from the rest of the organization. Comparable to grain in an agricultural silo that is isolated from outside influences.
Data silos occur for a variety of reasons. However, a common denominator is organizational structure. Once a company has reached a certain size, specialized teams are created to speed up work processes. This slows down the flow of information between the teams.
As soon as data is collected without a clear strategy on how to make it available to other departments, data silos inevitably arise.
Data silos occur when raw data is not processed consistently or is stored in a way that is unreadable by other applications. While data silos may seem harmless on the surface, there is an increased risk that the company will become incapable of action as a result.
The Customer Data Platform provides the key to comprehensive data-driven marketing.
Through the central management and orchestration of customer data, sophisticated marketing concepts can be implemented.
What is a Customer Data Platform?
Until now, there was no type of platform that had the potential to bring together all the data of the customer journey and make it accessible to the marketer at the same time. While a CRM provides a comprehensive view of individual customers, the data is often only as good as the person operating the CRM. It is therefore not uncommon to find outdated data sets in many CRMs.
A Customer Data Platform is a customer data platform that aggregates all interactions and activities along the customer journey into unified customer profiles.
The customer data is easily accessible and usable for the marketer. The software serves as a hub and central contact point for customer data. The Single Customer View or the 360-degree customer profile thus become reality.
Source: Customer Profile from Pedalix Software
How is a Customer Data Platform different from a CRM?
CRM systems are designed to work with customers. The data sets are composed of historical and often manual customer data to create a persistent customer profile. CRM systems are not designed to ingest large amounts of data from other sources.
A Customer Data Platform, on the other hand, is able to connect all types and sources of customer data, whether internal or external, structured or unstructured, batch or streaming. This allows you to get a much more comprehensive view and better understand and respond to your customers in real time.
CDP's data sources
Transaction and order data: E-commerce, administrative and service systems, and thus data on orders, customer and product value, and service requests.
Behavioral data: Products and categories, clicks, interaction data, newsletter click-through rates, and pages visited.
Profile data: Contact data, opt-ins, psychographic data points context, and preferences. This data can be enriched by the customer.
ERP and PIM data: Inventory and pricing. More transactional data than customer data but necessary for collaboration. Typically this data comes from PIM or ERP systems. Larger companies have standardized exchange formats (EDI) with their suppliers to increase efficiency.
The above examples are just the tip of the iceberg - CDP is designed for every type and category of data (currently known).
Source: Customer profiles from Pedalix Software
Specific Features of a Customer Data Platform
The ability to flexibly add and change new types of sources makes the Customer Data Platform more future-proof in its function as a central repository (managed directory for storing and describing digital objects).
CDPs are not only databases, they also standardize and bundle modules.
These modules contain pre-configured plugs or connectors to marketing databases and other tools, making it easier to integrate the external databases into the operation. Other modules help standardize data processing and cleanse data.
Some CDPs have additional functionalities such as forms manager, business intelligence, analytics, reporting, personalization, marketing automation or artificial intelligence.
The Customer Data Platform can not only obtain data from a CRM system. Other external systems, so-called channels, can also be connected to the CDP. These are applications such as social media channels, websites or email marketing.
These systems interact with the Customer Data Platform to display messages and in turn share engagement and campaign data with the Customer Data Platform to keep up to date data.
These applications are not part of the Customer Data Platform, but some CDPs have tight integration with the delivery platforms, allowing campaigns to be scheduled and even messages to be sent directly from a CDP.
A Customer Data Platform convinces with the following features:
360° customer profiles: Integration of all touchpoints, autonomous orchestration of customer and interaction data. Customer behavior is managed in one place.
Segmentation & Personalization: Merging of customers and matching content.
Agility and future-proof infrastructure: centralized hub developed to connect data sources and rapidly deliver data to third-party systems.
Democratization of Data: Simplified access to customer data for marketing, customer service and business intelligence.