What Is a Customer Data Platform?

Delve into the fundamentals of customer data platforms

What Is a Customer Data Platform
Data & AnalyticsInsights

Published: April 20, 2022

CX Today Team

Customer data platforms (CDPs) develop customer profiles by combining information from various first-, second-, and third-party sources.

Such data sources may include transactional systems, web forms, behavioral data, website and e-commerce, email and social media activity, etc.

In doing so, the platform unifies customer data from various sources and touchpoints while cleansing and standardizing it, making it available for use by other systems – including the CRM.

Finally, a CDP provides a 360-degree view of the customer, supporting omnichannel customer service and marketing efforts, informing product development, and enabling personalized customer experiences.

5 Features of a Customer Data Platform

Various vendors – including Accenture, IBM, and SAP offer different capabilities. Nevertheless, all notable CDP providers will deliver the following features.

1. Identity Resolution

CDPs develop unified consumer profiles based on the concept of a digital identity. Data acquired across multiple sources channels into the same individual customer profile at various customer journey stages.

The solution may also utilize cookies to collect and store data from anonymous users, allowing companies to understand their prospects better and provide more information regarding the pre-purchase stages of customer journeys.

2. Ingestion of Data

APIs with the data integration library of a CDP enables the software to ingest data from offline and online sources such as marketing automation, web tracking tools, and data warehouses.

3. Data Synchronization and Syndication

CDPs absorb data and convey it to other applications. Furthermore, it gives users complete control over data flows by allowing them to designate what should and should not be synced. Such a feature saves storage space and sometimes money.

4. Data Centralization and Segmentation

The goal of CDPs is data centralization. They usually leverage an API for this task, allowing users to look at user attributes, data sources, and individual customers.

With the centralization of data, both personalization and A/B testing become possible. Meanwhile, some CDPs provide a feature that allows users to divide their audience into distinct control groups and tests, enabling customer segmentation-based marketing.

Further, CDPs can create and save dynamic segments. Users can then generate customer groups based on a specific attribute or event, allowing them to target their consumers more precisely.

5. Data Processing

It is possible to perform data processes such as conversion, cleansing, and enrichment via a user interface of a CDP or programmable code. Typical actions include standardizing characteristics, minimizing duplication, and data analysis.

3 Best Practices to Remember

Here are three best practices to remember when using a customer data platform.

1. Prepare for a Future Technical Landscape

Based on the complexity of the chosen CDP and the surrounding technical landscape, complete implementation typically takes three to nine months. In this time, digital and customer trends may shift.

Fortunately, users can create use cases for reacting to recent events, new paid media channels, and platforms introduced to the IT stack during the implementation timeline.

2. Create a Data Governance and Quality Strategy

It is critical to provide the customer data platform with excellent data streams for effective outcomes. Organizations can take a macro view after determining the types of data required to satisfy CX goals, ensuring completeness and correctness.

Every data quality and governance strategy should include establishing standard definitions across all departments, implementing uniform business processes and reducing redundancy. Before users start implementing their CDP, companies will ideally set these in stone.

3. Create a List of High-Priority Requirements

Before beginning talks with potential vendors, users should ensure they have assessed future demands, engaging with stakeholders such as digital, marketing, sales, data privacy, IT, and customer support.

The first step for identifying high-priority CDP requirements is to isolate crucial customer touchpoints. With data at these “moments of truth”, CX teams can make journey improvements at the best possible opportunities.

Uncover some of the leading CDP providers by checking out our rundown of the Gartner Magic Quadrant for Data and Analytics Service Providers 2022


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