The Value of a Customer Data Platform
Your business runs on data. For marketers, data is king, even a differentiator, which is why a customer data platform is proving to be so valuable. The more you know about your customers, the better and more consistently you can target them with relevant products, services and messaging.
Finding this data is a never-ending endeavor, mostly because there is so much of it. Much to a marketer’s burden, the data is spread out all over the place, making it challenging to pull it together in a meaningful way. Typically, companies have different systems that house this data, siloed in different areas of the business. There are also external systems to consider, but those are often even more difficult to access.
Long gone are the days when a consumer realized they needed a product and then went to a store and purchased it outright. Today, the buyer’s journey is complex. The majority of people search multiple websites to compare products and pricing before they make a purchase, leaving behind copious amounts of data from every touchpoint. Ninety-percent of consumers read reviews before they make a purchase, and 63 percent of shopping begins online. That was before COVID-19.
Thanks to the pandemic, consumers are going online to purchase more products than ever before, spending $211.5 billion during the second quarter of 2020 on e-commerce, up 31.8 percent quarter-over-quarter and accounting for 16 percent of all U.S. sales – a nearly 5 percent jump from the first quarter.
While COVID-19 forced this digital shopping revolution, most experts agree the trend is likely here to stay, at least to some degree. Online purchasing is convenient and fast, and it offers consumers a wider variety of products with fewer unavailable items than brick-and-mortar stores that can hold only a limited supply of products.
All of this digital shopping presents even greater amounts of valuable consumer data, all of which marketers want to get their hands on to drive more successful campaigns. The data helps paint a detailed picture of the consumer, a ‘360-degree customer profile’ to help marketers develop more accurate consumer segments and personas. So, how can you leverage this data to its fullest potential in your marketing strategies and campaigns? Enter the consumer data platform.
Customer Data Platform vs. CRM
Most businesses today have a customer relationship management (CRM) system, but increasingly more are finding value in adding in a customer data platform to their technology stack. A customer data platform is defined as “a packaged software that creates a persistent, unified customer database that is accessible to other systems.” What is the difference between a customer data platform and a CRM?
A CRM, such as Salesforce, is a powerful, centralized database that stores general customer and prospect data that was manually inputted, making it available to different business units that can utilize the data for their own purposes. It helps with contact management, sales management, and user productivity.
For instance, the CRM shows how and when existing or potential customers have been communicated with by someone in your company. It keeps a record of what products they have purchased or ordered from your company and when, as well as what they paid for them. You can see any service issues they have experienced, when and through what channel they reached out to customer support, and the outcome of that service request.
By collecting this data and storing it in one place, customer service, sales, and marketing can more easily track the customer experience and interactions – but only with their company. When it comes to customer interactions with other brands or offline sources, or collecting data on anonymous visitors, the CRM falls short.
A customer data platform goes a step further, connecting all types and sources of customer data from internal and external sources. Whether the data is structured or unstructured, batched or streaming, historical or real-time, the customer data platform can ingest it and present an even more comprehensive view of the customer along the entire buyer lifecycle.
You can continually add or change data sources in your customer data platform as well to continually tap into the most valuable supply of consumer information. Econsultancy places data sources into five different categories: transactional and order data; behavioral, web and mobile data; profile data; product data; and CRM and offline data sources, such as web forms and surveys.
The customer data platform integrates with Data Management Platforms (DMPs) and delivery platforms as well, such as email marketing and marketing automation software, and social media management platforms. These integrations make planning marketing campaigns and sending out marketing messages directly from your customer data platform simple.
Do You Need a Customer Data Platform?
If you are only interested in tracking your customer’s intentional interactions with your company and are satisfied with this data being manually entered by various people across different business units, the CRM alone will suffice. But manual entry always creates opportunities for errors, misses and lost data. CRM data is useful still, but it serves a singular purpose and is short-sided when it comes to understanding lifetime customer behavior and customer journeys.
A customer data platform can co-exist with a CRM and DMP to fill the gap between general customer data and robust customer profiles. The customer data platform autonomously and automatically creates unified customer profiles with data gathered from a variety of online and offline channels. Using a customer data platform, you can better understand known consumers, as well as anonymous entities, such as cookies, devices and IP addresses.
When you can merge your customer data and make it available to all interested business units, you are able to operationalize the data consistently across your company in different, albeit equally valuable ways. Everyone is working from the same data, even as that data is collected from a wide variety of data sources. Instead of parsing together bits of data manually, users have a single, reliable data source to pull from to drive strategy and inform decisions.
As a marketer, your primary goals are to be able to accurately and consistently identify the right audience segments, user journeys, messaging, communication channels, and timing for your marketing efforts. The more you can understand about your customer, the more you can improve the effectiveness of your campaigns, boosting customer lifetime value and preventing customer churn.