How to Accelerate Your Marketing Results with a Customer Data Platform
You may have heard the term customer data platform or CDP. CDPs are quickly gaining momentum as the most promising new marketing technology to streamline data-driven processes for marketers.
While you may have heard of the term, many marketers are still confused on exactly what a Customer Data Platform (CDP) can deliver.
Wikipedia describes it as:
Customer Data Platform (CDP) is a marketer-based management system. It creates a persistent, unified customer database that is accessible to other systems. Data is pulled from multiple sources, cleaned and combined to create a single customer profile.
A report by Martech Advisor offered the following definition:
A CDP as an evolution of something all modern marketers (should be) familiar with – a marketing database. In this case, a CDP is a marketing database purpose-built for the API-driven world and ‘pick and mix’ marketing technology stacks in mind, while also allowing for the integration of offline sources and legacy database and infrastructure.
At their core, CDPs have three primary functions:
- They pull in customer data from the disparate data systems of your choice
- They match, merge and cleanse this data into a unified record for each customer
- They make these records visible to your other marketing tools to ensure the consistent treatment of customers
And according to the CDP Institute:
A Customer Data Platform is a marketer-managed system that creates a persistent, unified customer database that is accessible to other systems.
This definition has three critical elements:
- “marketer-managed system”: the CDP is built and controlled by the marketing department, not the corporate Information Technology department. Some technical resources will be required to set up and maintain the CDP, but it does not require the level of technical skill of a typical data warehouse project. What really matters is that marketing is in charge of deciding what goes into the system and what it exposes to other systems. In particular, it means marketing can make changes without asking anyone’s permission, although it may still need outside help.
- “creates a persistent, unified customer database”: the CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results.
- “accessible to other systems”: data stored in the CDP can be used by other systems for analysis and to manage customer interactions.
The common thread between all these definitions is data. Customer data is pulled together from multiple systems and transformed to create a single customer view. Just as importantly, a CDP is controlled by marketing, not the IT department. Using a CDP, a marketer can link multiple data sets to create a single customer view and seamlessly activate these insights across channels through any number of connectors to other systems.
Adoption of Customer Data Platforms
The Customer Data Platform Institute (CDPI) recently surveyed its members about their customer-facing systems and CDP deployment plans. One-third reported they had many disconnected systems, just over one-third reported (37%) they had many systems connected to a central platform of some sort (9% unified customer database, 9% unified database and orchestration system, or 19% marketing automation or CRM platform), 6% said one system does almost everything, and the remaining 23% said they had some other configuration or didn’t know.
The CDPI Member survey also asked about plans regarding Customer Data Platforms. 19% had a CDP already deployed, 18% had deployment in progress, and 26% planned to start deployment within the next 12 months.
Many marketers see the value in customer data platforms and predictions are that the CDP market will reach $1 billion by 2019. According to the CDP Institute, Its latest CDP industry update reported employment in the industry grew by 76 percent over the past year, with $114 million in new funding in the first half of 2018, an increase of 26 percent over the $90 million added during the same period in 2017.
As the CDP market experiences this flurry of growth, many vendors are trying to differentiate themselves. Many CDPS may solve the same use case but with different capabilities. Some CDP vendors will offer predictive model building while others simply provide data to external predictive modeling tools. It’s important that buyers understand these differences and what each CDP system offers.
The ROI-Driving CDP – V12 Velocity Customer Data Platform
With a long history of first party data management blended with third party offerings, the V12 Velocity CDP links 1st party data management, intent-indicating 3rd party data assets and data science to deliver industry-specific solutions that drive measurable ROI. Unlike other CDPs in the market, V12 has integrated third party data into our CDP platform.
V12’s CEO, Andy Frawley recently published an article in which he discusses the importance of third party data to create an omnichannel customer view.
“There are several gaps in the accepted definition of what a CDP can do. While data is at the core of a Customer Data Platform, most only address first party data. Customer data is the foundation of a singular customer view, but to gain a truly data-driven, omnichannel view of consumers today, marketers must build upon the foundation with rich third party data such as demographics, behavioral data, and in-market indicators. Also lacking in most CDPs is a way to orchestrate complex customer journeys and tools to understand key KPIs and outcomes in order to continually optimize strategies.”
A report from Royal Mail Data Services and DataIQ highlighted that companies lose an average of 20.7% of their customers each year, making third party data critical in helping companies gain a better understanding of their customers.
In another report by Winterberry (2017), companies in the U.S. invested a total of $20.2BB in third‐party audience data and data activation solutions supporting their advertising, marketing, media sales and associated efforts. In addition, companies spent $10.1BB on services and technology offered by third‐party providers to support the activation of audience data (rather than on data itself).
With spend increasing on third-party data solutions, marketers are clearly in need of a platform that offers a seamless way to integrate this data into their current marketing system.
The V12 Velocity CDP identifies and unifies data around each customer so you can see, understand and act on their behavior. Through a range of system connectors, we continuously collect data from around your ecosystem and consolidate it into a 360 single customer view by merging identities from multiple devices into one, deduping customer records and without the need for significant IT resources.
Our third data products seamlessly integrate into the CDP and deliver both depth and breadth covering consumer and business audiences.
The V12 CDP provides real time integrations with over 500 digital technologies to make it easy to unify, manage and schedule data flows for any channel. In addition, our data-processing capabilities capture, integrate and standardize consumer data in real time before the opportunity is lost.
The V12 CDP also helps marketers manage automated Customer Journeys that engage uniquely at every stage, based on each individual’s behavior. Marketers can create campaigns that recognize if customers have visited their website, browsed certain product categories, or opened emails.
Consumers today demand personalized experiences and expect brands to understand them across channels. Real-time, actionable insights are critical so brands can understand their customers and respond quickly with the right engagement through the right channel. Using a CDP, a brand can quickly optimize their marketing strategies and deliver personalized experiences with a solution that delivers proven ROI.