A customer data platform (CDP), according to Straits Research, is defined as a tool that “collects, unifies, and creates a customer profile that can be activated on various platforms and media networks by marketing companies for the purpose of advertising.” A CDP enables access, analysis, and action on every single detail that an organization knows about a customer. This enables companies to market their products or services in a manner that is more personalized, expressive, and effective.
While the process of buying a CDP isn’t really different from buying any other software tool, there are a few factors that should be considered to ensure that the selection of one fulfills the requirements of the organization. The primary factor for consideration should be the alignment of the tool’s features and characteristics with the goals of the company.
To ensure the aligning with goals, companies must first introspect and find out their actual goals. This preliminary step must be followed in the purchasing of any tool, and not just for a customer data platform. Next up, brands need to define the system functions that would be required to support the goals that the organization has decided upon.
Customer data platforms are complex and come with a combination of various different functions, which leads to the availability of innumerable tools in the market. While freedom of choice is great, which tool do you pick? To unlock this answer, brands need to go through a stepwise journey that leads to the perfect customer data platform for them. Here are the steps involved in choosing the right CDP for you.
Define Use Cases
First and foremost, what do you plan to use your CDP for? Brands are better positioned to choose a product once their organizational use cases for a customer data platform are set in place. Keeping this in mind, the ideal place to start would be with the determination of CDP use cases. This provides companies with the necessary clarity they initially need during the purchasing decision.
Brands are required to identify whether they want it to get a complete view of their consumer behavior across multiple channels, or to generate lists for targeted marketing, or to deliver accurate consumer information to personalization systems. Each product varies in terms of the type of use case it works to serve or is better at serving.
One of the main features of a customer data platform is the collection of customer data. CDPs collect customer data from multiple sources, review this data and create 360-degree customer profiles. The collection of data from multiple sources, both internal and external, is a key factor influencing the CDP purchasing decision.
The customer data platform a brand selects must be able to gather individual and first-party data such as demographic information, names, and emails, among others, from multiple sources online as well as offline. Additionally, third-party data collection may also be required by some companies.
- 360-Degree Customer Profile Generation
The key characteristic of a ‘good’ CDP is to gather and store multichannel data of a consumer to create a 360-degree customer profile. These 360-degree profiles allow brands to know more about their customers. The creation of these customer profiles is required by brands in order to enhance personalization in their marketing efforts and communication.
Personalized marketing and advertisements that are relevant increase the chances of the prospective customer making a purchase. Personalization of communication also works to show customers that the brand values their contribution. Additionally, personalization of the complete process gives customers a brand experience that they are likely to remember for quite a while.
Detect Duplicate Profiles
Another key function of CDPs is the identification of duplicate entries of customer information. In the case of companies that have multiple sources of customer data entry, it is possible that more than one profile has been created of a single customer. This problem generally arises due to the use of more than one email ID or the interaction of the customer with different departments of the company, with each creating a separate record for the same customer.
Customer data platforms detect these duplicate profiles and efficiently delete them from the system to avoid confusion. This does not affect the company’s departments as the CDP now provides a single point of storage for customer data. Every department can access this customer data and any changes made to it will be saved for future use.
Customer data platforms also possess the ability to create niche consumer segments. For customers or target individuals with the same preferences, behavior, and dislikes, CDPs allow segmentation to ease the process of communicating with them and marketing to them.
Customer data platforms actively analyze data and work to facilitate easier methods of marketing for a company. The creation of niche customer segments allows brands to enhance their marketing efforts to each segment. This is made possible by the unification of customer data to create narrower segments that allow brands to provide data-driven, uber-personalized consumer experiences.
The pricing of the customer data platform is something that every company will take a look at some point in their process of purchasing. Some business owners may take a look at product pricing at the very beginning of this process as they may be more price-oriented due to budgetary constraints, whereas some may think of pricing as one of the last factors.
Nevertheless, for both kinds of business owners, pricing remains an important factor in their purchasing decision. It is important to note that the pricing of the product does not necessarily relate to its efficiency. In simpler terms, an expensive CDP does not guarantee great results, for each company has different demands and requirements from a CDP.
- Assess Vendors
This step is as important as the others, or maybe even more. Vendors are as important as the product they offer. Companies generally look for vendors that provide great after-sales service and support. Vendor support for a CDP can be required by companies at any point in time. While searching for suitable vendors, companies look at their track record in the market, their reviews, and recommendations from colleagues.
During the vendor selection process, brands are generally aware and select vendors who can meet their expectations. Vendors also provide at least one product demonstration of the CDP before the purchase is finalized. The brand attention should be equally shared in the demo by the tool and the vendor. Brands get a clearer idea of possible future response and situation handling by the vendor.
A customer data platform provides brands with the ability to create marketing experiences that leave a lasting impression in the minds of the customers. The hyper-personalized experience that customers receive is an effort that brands can only pull off with the help of a CDP that works best for them by providing efficient results. To get the best out of a CDP, implement a CDP that suits your brand best.