The Customer Data Platform market is expected to grow rapidly over the next five years or so, from USD 2.4 billion in 2020 to USD 10.3 billion by 2025 (Markets and Markets). Investments are already on the rise. CDP investments have grown sharply in 2020, perhaps as a way to get ahead of the uncertainty caused by COVID-19. In 2017, deployments were at 19% with a decline in 2019 at 17%. In 2020, this number jumped to a 29% deployment.
Brands are increasingly turning to customer data platforms as a way to get ahead in such a volatile economic climate. So why is this and what are some of the benefits CDPs offer?
Let’s dive into the stats to get a better understanding.
The CDP Institute defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems.”
A persistent, unified customer view is what marketers strive for and which provides the foundation for many marketing initiatives such as better customer experiences, stronger engagement, richer customer journeys, and even an understanding of what consumers may be in market for.
Data Quality & Integration
With so much data being generated on a daily basis, many challenges exist around data quality and integration:
- The average business already has 17 unique technology applications housing customer data. (Deloitte Digital)
- On average, businesses receive data and metrics from 28 unique sources. (Deloitte Digital)
- 62% of US retailers have over 50 systems housing customer data. (Deloitte Digital)
- On average 20% of database records contain contact data with data quality issues. (Data Services, Inc.)
- Employee turnover causes approximately 3% of business records to become outdated every month. (Data Services, Inc.)
- On average, 65% of contact data generated from online web forms is invalid. (Data Services, Inc.)
- The amount of data created by consumers doubles every two years, but 99% of new data is never used, analyzed or transformed. (MIT Technology Review)
- In terms of how business leaders interact with data, 70% of time is spent finding data with only 30% analyzing it. (IBM)
- 54% of businesses cite data quality and completeness as their largest marketing data management challenge. (Invespcro)
- 57% of marketers are getting diminished results as a result of misinterpreting data. (Wharton)
- Approximately 47% of new data collected by businesses has one or more critical errors. (HBR)
- Only 3% of business leaders think their department has an acceptable level of data quality. (HBR)
- Companies with a Data Governance program in place increase data analysis time by 2% and register a 31% improvement in data quality confidence. (Observepoint)
- Businesses with a designated Data Governance or Data Management leader show 42% greater confidence in data quality than those without. (Observepoint)
- 33% of elite marketers say having the right technologies for data collection and analysis is the most useful in understanding customers. (Econsultancy & IBM)
Customer data platforms on the other hand were developed to do just this – this is a basic core principle of a CDP – rapid data integration from both offline and online sources, including fast, real-time behavioral insights.
Personalized, Customer Experiences
With a consistent, customer view in place, marketers can provide better experiences and personalization to consumers.
Look at all the benefits of what happens when brands focus on CX and personalization:
- There is an 80% increase in revenue for businesses that focus on improving customer experience. (Forbes)
- Two-thirds of companies compete based on customer experience. (Forbes)
- 73% of customers agree that customer experience helps to drive their buying decision. (PWC)
- 86% of customers say that they are ready to pay more if it means getting a better customer experience. (Super Office)
- 49% of customers agree that they have made impulse purchases after an excellent customized personal experience with a brand. (Dot Digital)
- Customer satisfaction and retention, plus improved up-selling and cross-selling, are the main reasons businesses are trying to improve their customer experience. (Super Office)
- Businesses that prioritize customer experience have a revenue increase of 4-8% higher than their competitor. (Forbes)
- 89% of consumers have moved to a competitor following a poor customer experience with a brand. (Lumoa)
- Customer-focused companies increase their revenue 1.4x faster than non-customer-focused companies. (Forrester)
Using a CDP, omnichannel marketing cn often be performed with ease and speed. The data stored in a CDP connects to multiple to other systems. Real time integrations with other digital technologies you may already have in your martech stack make it easy to unify, manage and schedule data flows for any channel.
In addition, some CDPs also offer built in journey management. Today’s empowered customers, choose their path and view the entirety of the experience with your brand across all touchpoints as one connected experience. Your customers interact with you across multiple touchpoints, across channels, and at the time of their choosing. However, an effective customer journey management program helps you eliminate any disruption in the customer purchase process to keep them seamlessly moving to conversion.
A customer journey map is a visual representation of every experience your customers have with you. It helps to tell the story of a customer’s experience with your brand from original engagement to final purchase and beyond. Type of journeys include:
- Engagement/Brand Awareness: Welcome, Birthday, Re-Engagement, Engaged Non-Buyers, Profile Updates
- Cross-sell/Upsell: Abandoned Cart, Abandoned Browser, Next Best Offer, First Order
- Acquisition: Signals intenders, Competition Conquests, Top Tier Look-alikes, Life Event
- Nurture/Purchase Oriented: Nurture, Renewal Reminder, Loyalty, VIP, Thanks for Purchase
As we’ve already established, CDPs integrated data and when a journey is performed, the results can be fed back into the system for further action.
High performing organizations are more effective at managing and actioning cross-channel journey data. (Pointillist) In fact, high performers are 9.5 more likely than underperformers to have accessible data that is unified and an integral driver of CX inititaives.
CDPs deliver speed and timely insights so marketers can continually engage with their customers and prospects with the right messages and through the appropriate channels. To learn more about the V12 Customer Data Platform and to see if it’s a fit for your organization, complete the form for additional information.