By Kristina Lauren
Within the first 90 days of the COVID-19 pandemic, e-commerce experienced 10 years of growth. Of course, this isn’t too hard to believe with the amount of people all over the planet who became homebodies practically overnight and could only use online venues to shop. It’s certainly great news for e-commerce businesses, but as a result of this explosion, another (good) problem also arose. If the amount of digital customer interactions is increasing, that would mean that the amount of customer data increases as well. And as the amount of data increases, so does the need to collect it, store it, and use it effectively.
As technology becomes more and more advanced and businesses tap into that advancement to make themselves more competitive, customers are expecting more. Consumers want more personalized experiences, faster service, and accurate recommendations. 67% of customers want brands to automatically adjust content to fit their preferences and a decent-sized 42% “get annoyed” when this doesn’t happen.
Take services like Netflix or Spotify, which can give their users dozens of fairly accurate suggestions based on just one movie or song they watched or listened to. People are interacting with services like this on a daily basis and therefore becoming accustomed to being catered to. It’s no longer a leg up for marketing efforts to give their customers an intuitive experience—it’s a necessity. But it’s especially hard to do this when your customer data isn’t organized efficiently in the first place.
Most marketing teams use multiple tools, but it often takes too long to discover insights about potential customers and turn those insights into actionable data for campaign delivery. Even with the best CRM, the amount of manual labor that still needs to be done just wastes time that could be used for finding more leads and making more money for your business.
This is why a CDP can be valuable. But we should probably start by first defining what customer data is exactly.
What is customer data?
Customer data is essentially what consumers let us know, whether intentionally or unintentionally, when they interact with our company. This can be online—when a customer uses social media, visits a website, clicks on a product, skims through a blog, etc. But it can also be offline interactions, like when a customer goes shopping at a physical store. Although data privacy restrictions have changed how businesses are able to access and collect this information, customer data is and always will be extremely valuable for any marketing team.
What’s nice about a CDP is that it takes all of this data that can get easily confused when it’s not managed properly, and unifies it all into a single place. This means tying together data from your CRM as well as from other platforms that don’t typically share data, like your marketing cloud, lead generation sites, or service software.
But what is the difference between a CDP and a CRM?
While CDPs and CRMs both collect and organize customer data, they are quite different and it’s important not to get them confused.
One key difference is that CDPs gather information on anonymous visitors but CRMs only collect data on known/qualified or potential consumers.
Another difference is that CDPs are meant to handle data from a large amount of sources, so the chances of duplicated or lost data are small. CRMs, on the other hand, are at a higher-risk for lost or misinterpreted data because they rely more on individually-entered info.
Along those lines, while CDPs can track both online and offline data, CRMs can only access offline information if it’s entered manually.
What pain points does a CDP solve?
Bridging data silos
The more in-sync a business is from within, the better results it will see externally. But what often ends up happening within a company or organization is every department does its own thing. Marketing has their own way of bringing in leads and opportunities while Sales has their own way of qualifying them that Marketing isn’t completely aware of. Or your avenues for gathering data are so separate, it becomes a guessing game to manually consolidate that information and make sense of it. But a CDP can stitch all of these separate channels and give you a nice, unified perspective of the kind of customer you’d like to engage with.
Avoiding Redundancy
How many times have you had a product or service you’ve already purchased marketed to you again? While the average customer may just shrug at these ads and keep scrolling, unintentionally marketing the wrong ads to your customers is a ridiculous waste of money. And it’s completely avoidable. Data silos are responsible for businesses’ inability to stop these ads, but a CDP helps solve this problem. Instead of hitting customers over the head with redundant marketing, a CDP makes the most of your company’s dollars by suppressing customers who have already bought (or have showed no interest) and putting the focus on gaining new, interested consumers.
Personalizing the Experience
Wouldn’t it be amazing to give a customer a personalized offer for your product based off of all the information you’ve collected about them already? Let’s say they came to your website, browsed through your page for noise-canceling headphones, clicked on five pairs with a price-range of $50-$100, but left your site before they could come to a decision. With a CDP, you would be able to collect all of this information and hit that customer or any similar customers with a personalized offer. Sometimes this can be a little spooky as a consumer, but it’s a lot more satisfying to finally see an ad for something you actually want instead of the thousands of ads you usually see for things you couldn’t give two hoots about. In fact, customers are 80% more likely to make a purchase from a business that offers recommendations that align with their interests.
CDPs have much to offer today’s businesses in a world that is speeding towards digital marketing and has no intention of looking back—and companies are realizing this. Not only will these platforms continue to become more popular, but they will become necessary in order to provide the ideal customer experience and allow businesses to stay in the game.
