Customer Data Platforms – The ABCs About CDPs
Every few years it seems like there is a new customer data technology with a slightly different name using very similar acronyms: Marketing Customer Information Files (MCIFs), Customer Relationship Management (CRM), Campaign Management Systems (CMS), Data Management Platforms (DMP), Marketing Data Warehouses (MDW), to name some. No wonder it is confusing to those not initiated in customer data technology.
Now, along comes Customer Data Platforms (CDPs). Is this just a juggling of the same three words and a spin on the same technology we have been using for years? Or, is it something different that can impact your business?
Having witnessed the evolution of databases over the last 30+ years I can tell you CDPs are different and can have an impact. Here’s why: CDPs provide a Single Customer View.
- CRM systems are great at helping salespeople sell more to existing customers and cultivate prospects. Their primary use is for Sales and/or Customer Service.
- Data Management Platforms (DMPs) are more campaign specific, primarily online. DMPs help deliver relevant advertising to prospects or personalize website experiences to improve conversion. They work with limited amounts of data, often tied to anonymous, transient Web cookies.
- Data Warehouses collect and transform enterprise-wide data into Business Intelligence that enables data mining and decision-support systems. It primarily serves IT and enterprise management teams.
The Customer Data Platform is for marketers. It provides them with direct access to all customer data and allows them to create and manage campaigns quickly and effectively. In short, CDPs connect all the dots to create a single customer view that the aforementioned systems do not.
Why is this important?
For starters, in the offline world where we have names, addresses, and all forms of personal identification information (PII), and in the online world, data and identities are largely anonymized, they need to come together to achieve a holistic (single) view of the customer. CDPs deliver a ‘single customer view’ that takes business intelligence, analysis, segmentation, targeting, and performance measurement to all new levels.
Secondly, CDPs are designed and built for marketers. They do not require specialized IT training, large software and hardware investments, or extensive data processing. I find this to be one of the most attractive benefits.
Earlier in my career, I would hear complaints about having to work with IT to get marketing support. One colleague called it the ‘IT trilogy’: 1st response to a request was ‘it can’t be done,’ 2nd was, ‘we can do it but it will cost a lot of money’ and 3rd was, ‘it will take 6 to 12 months and is far down on the priority ladder’.
Finally, CDPs are meant to be shared and help others (people, systems, departments) outside of Marketing. David Raab, founder of the CDP Institute defines a CDP as a “packaged software that creates a persistent, unified customer database that is accessible to other systems”.
David Raab has a long and successful history as a database marketing consultant. He gave up his consulting practice to form the Customer Data Platform Institute which brings together a vast array of resources committed to improving and evolving customer data management.
Without a Single Customer View, it is difficult to see (and connect) all of the interactions an end-user or prospect has with you and what their total value potential is. It is also difficult to link one database with another. For example, you may have an individual (a contact) in your marketing database for any of a variety of reasons, but they are not linked to your Salesforce CRM database.
A Single Customer View also takes attribution and optimization tracking to all new levels. Customer purchase journeys can be long and complex. They may have multiple points of contact over that time (online activity, email, trade show, customer service, dealer handoffs). CDPs connect the dots to provide a more complete view of a buyers’ purchase journey.
For more information on Customer Data Platform you can go to the CDP Institute.