Customer Data Platforms (CDPs) are becoming increasingly essential for business success. After all, customer experience is the most critical factor distinguishing whether a company will thrive and grow in any industry, and excellent customer experiences are built on data.
Today’s consumers expect every interaction with a business to be convenient, impactful, and tailored to their needs. A customer data platform goes beyond the basics of a standard “Customer Relationship Management” tool to help businesses build comprehensive customer profiles they can use to personalize every interaction.
With these tools, companies can take a unique, data-driven approach to optimize every stage of the customer journey, increasing loyalty, retention, and conversions. Here’s why you should be investing in a CDP to turbocharge your customer experience strategy this year.
1. More Comprehensive, Unified Customer Profiles
CDPs don’t just “store” data about your customers. These tools collect and combine information from countless different environments, unifying it into in-depth customer profiles (or single customer views). That’s crucial when customer journeys are becoming more complex and multifaceted.
Companies can’t rely on analyzing just one or two customer interactions and touchpoints to get a complete view of their target audience anymore. They must bridge the gaps between hundreds of “data footprints” left across numerous applications. CDP solutions wrangle all the data you need to truly understand your customers, their needs, pain points, and even areas of “friction” in their journey.
This leads to the creation of profiles that give you a more comprehensive view of customer behavior, thoughts, feelings, and actions. With a CDP, you can see everything that impacts your customers’ experience with your brand, from the point when they first encounter your company to the stage when they renew subscriptions or make additional purchases.
2. Customer Data Platforms Break Down Data Silos
The responsibility to deliver great customer experiences doesn’t lie only with traditional contact center agents anymore. For companies to compete in an experience-driven landscape, they must unify every customer-facing employee with the same data and insights.
Everyone, from traditional agents to “informal contact center employees”, like sales teams and product developers, must be on the same page. Unfortunately, without customer data platforms, it’s easy for data silos to emerge. One team might have information on a customer’s purchasing history, while another knows about their previous issues and support requests.
When all of that data is fragmented, it’s difficult for teams to collaborate on delivering a consistent user experience. Plus, it’s much harder to understand the customer journey fully. CDPs bring teams and data together, enhancing collaboration and customer service decisions.
3. Unlock Valuable Insights for Growth
The only way to deliver the highly personalized experiences 71% of customers say they expect from brands today, is to gather as much data as you can about your audience. Unfortunately, collecting data today is much more complicated than it seems. Google is terminating third-party cookies that marketers previously relied on to understand customer journeys.
Additionally, buyers are becoming more discerning about the type of information they share. Customer Data Platforms help companies to overcome data shortages. They ensure you can collect larger volumes of the data your customers willingly share through different channels and platforms.
This means you can unify more “first-party” data, to adhere to evolving privacy laws, and you can maintain more control over that data too (which improves the accuracy of your insights). On top of that, you can use the data you collect to develop more in-depth insights. For instance, many CDP solutions allow companies to use their historical data for “predictive analytics” tasks, allowing them to predict changes in behavior, buyer trends, and preferences in advance.
4. Customer Data Platforms Improve CX
The biggest benefit of investing in customer data platforms is that they actively improve the customer experience. Your customers want to feel like you truly understand them and are ready to put their needs first and deliver a consistent experience across every channel.
CDP technology helps companies to enhance the customer experience in various ways. It ensures your team can:
- Personalize interactions: With access to in-depth customer profiles and insights into previous customer behaviors, it’s much easier for employees to personalize customer interactions. They can triage support requests based on customer concerns and preferences, suggest relevant products to buyers based on previous purchases, and even share relevant content with customers based on their interests.
- Enhance omnichannel interactions: When customer data lives in multiple places, it’s hard for sales, service, and marketing teams to deliver a consistent experience. Alternatively, if everyone on your team has access to the same data when they interact with customers on different channels or create content for different platforms, this leads to a higher level of consistency.
- Accelerate problem solving: When support agents can instantly access everything they need to know about a customer, they can solve problems much faster. CDP platforms can help accelerate resolution rates in the contact center. Some tools even have AI solutions to generate “custom” responses to customer concerns in seconds.
5. Improve Data Privacy and Compliance
Companies need customer data to deliver personalized experiences. Unfortunately, the more data they collect (particularly across different channels), the more they expose themselves to security and compliance issues. It’s much harder to track sensitive data when distributed across multiple apps and tools.
Customer data platforms ensure you can access a secure, central location for housing data from various sources. This means you only have one environment to monitor for signs of threats and risks (rather than dozens). Plus, it ensures that whenever a customer asks for their information to be “removed” from a system, you can easily find and eliminate that data.
Most CDP platforms have robust data protection tools, such as end-to-end encryption options, multi-factor authentication, and protected data vaults. These can all help to protect you from breaches, damage to your reputation, and regulatory fines.
6. Customer Data Platforms Can Boost Revenue
Customer Data Platforms allow companies to use the data they gather about their customers more effectively and thoughtfully. When you understand everything there is to know about your audience, it’s much easier to create the personalized experiences that McKinsey says can boost revenues by up to 15%. The more personalized your interactions with customers are, the more likely you will earn their loyalty and trust.
Plus, you can discover new ways to reduce churn and increase conversions by understanding the customer journey and the triggers that influence buying behavior. You’ll be able to identify which factors might cause a customer to abandon your business (like long wait times for service). Plus, you can use AI to detect opportunities to upsell and cross-sell customers at different times.
You can even leverage AI tools to proactively reach customers with offers, deals, and product suggestions relevant to their needs, further increasing conversion rates. This means customer data platforms give you new opportunities to increase profits, and retention.
7. Increase Efficiency and Productivity
Finally, customer data platforms can significantly improve efficiency and productivity. CDPs can automatically import data from your contact center, CRM, survey tools, and more. This reduces the repetitive “data entry” processes your team needs to commit to.
Plus, when employees only have to use one platform to access all the information they need for marketing, sales, and customer service, they spend less time jumping between tools. This means staff members can complete all kinds of tasks much faster and more efficiently.
Thanks to AI, CDPs will become more advanced, giving employees even more ways to save time and energy. For instance, tools already exist that can instantly transcribe and summarize conversations in the contact center, making it easier to update profiles in real-time.
Discover the Benefits of Customer Data Platforms
Investing in customer data platforms isn’t just a good way of making managing customer data easier for your company. These platforms give you the tools to design stronger customer journeys and build deeper customer relationships.
Through in-depth insights and unified views of your customer’s journey, CDPs can empower you to personalize, optimize, and enhance every interaction with a customer. This leads to greater customer lifetime value, higher revenue, increased retention, and better workplace efficiency.
