What is a Customer Data Platform (CDP) and how does it improve your marketing strategy?

If you don't have a CDP yet but your company already has customers, please keep reading.

CDP or Customer Data Platform is a set of tools that facilitate the task of generating a customer segment for a specific campaign that marketing or business area wants to carry out.

Whether it's a specific niche (a group of prospective buyers who meet certain characteristics or a loyalty campaign), your company's CDP should provide you with a list of emails (or phone numbers), which will have a high probability of clicking on the specific offer or campaign you're offering them.

If you were a customer, you could say: “I hope to receive a PERSONALIZED offer for ME, according to my purchasing profile, my personal characteristics (sex, age, type of work, where I live, etc.) that will naturally lead me to ACCEPT IT and eventually purchase a product or service”.

An example. I am a 40-year-old adult who uses his credit card every Thursday to pay for dinner for two, the offer I expect from my bank/card issuer is something along these lines, for a THURSDAY, whether it's a new restaurant, special menu, or similar scenario.

What I don't expect is an offer for another day of the week or for a restaurant 200 km from my home and unless it's for lunch.

What is a CDP?

The CDP is the set of customer segments.

Technically, a Customer Data Platform (CDP) is a parcel of standalone software that enables a unified persistent base From customers, and reachable by other systems.

The CDP is a pre-built software package customized to the needs and characteristics of the business of each client.

While technical resources are required to enable and maintain CDP, it must be simple, it must take data from different sources, and focus on its main role: delivering segments for campaigns. Its complexity must be low and not be at the level of a corporate datawarehouse.

It is a persistent database and unifies individualized customer data.

It allows you to have a clear view of each one of them, taking information from different sources, persisting and crossing data to understand the behavior of that particular customer, over time. From open transactions or emails, to abandoned shopping carts in an e-commerce. This unified information allows you to improve customer targeting.

Your data is accessible by multiple systems

The different systems used by the company must be able to access CDP data. Thus, you can carry out analysis, create segments and manage campaigns in a simple way by business users, without the need to involve the IT area to generate the segments.

What is not a CDP?

The CDP is not the Data Warehouse.
It's much simpler and more specific, focused on knowing customers and being able to generate segments quickly, in a simple way, by business and marketing people.

CDP is not CRM (Customer Relationship Management).

While there is data that can be in both, CRM tracks business opportunities from conception to term (hopefully successful!). For the Sales team, the focus is on managing the Business Opportunity.

CDP is not a series of integrations that only the IT area knows about.

The CDP is able to support every time you need to create a segment for a campaign. While common, this form is far from optimal and can be dangerous. The (little) knowledge of customers is NOT where it should be: in Marketing and in Business.

Data Types for a CDP

What is Customer Data?

Customer Data is any and all information that customers leave behind when they use the internet and interact with companies both online and in person.

Visits to websites, clicks on emails, readings and comments on a blog, tweets and comments on social networks. There are 4 main categories of Customer Data:

#1. Personal - Customer Identity.

Name, age, gender, ID, tax number, address, commune, country, telephone contact, email, social media accounts, professional title and company, current account and other unique customer data.

#2. Details - Additional personal information that allows us to better characterize customers.

Professional history, industry, job level, lifestyle, type of household, car you drive, socioeconomic group, family information, hobbies and others.

#3. Behavior - Relationship data with this customer.

Completed transactions, purchases, monetary value, returns, dates, abandoned carts. Clicks on emails, online visits, completed forms, frequency, frequency, technical service visits, product changes, usage problems, calls to a contact center and many others that you can take from internal systems.

Some companies take data from parking and WiFi systems to enrich customer behavior information.

#4. Qualitative - additional information to the customer profile

Motivations observed in surveys and evaluations, how the customer arrived at your company, how happy they are with the product or service, general feeling towards the company.

The Data varies according to the type of business of the company. In general, all the data that allows you to know the customer better should be in the CDP.

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How to build a CDP?

CDP can be as simple as creating a repository in a cloud environment (AWS S3, Google Cloud Storage or Azure Blob Storage) where we define the CDP data model.

There are also more complex enterprise solutions.

The data model is specific to each type of business, the main variants being Customer Experience CDPs, Lifetime Value and Journey Mapping.

Once the CDP and the defined model are created, the data is injected.

The central idea is to ingest data from different systems: ERP, Transactional, CRM, Google Analytics, Databases, External Services, and any other source structured or not. In this intake process, we have 3 steps fundamentals:

#1 - Data Cleaning

Eliminate duplicates, discard faulty, unreadable data and ensure the quality of the data entering the CDP

#2 - Data Enrichments

If in any way you can enrich a data with more information that allows us to know the customer better and generate a better segment for a campaign, do it! Starting with low cost/complexity opportunities. For example, from the license plate of a vehicle, obtain information about the owner, and from the identification number, obtain the commune/neighborhood in which the customer lives. And many other ways to improve the data, simple or complex.

#3 - Process Orchestration

Finally, and where many CDP projects fail: the consistency in feeding the CDP with clean and enriched data.

We must ensure that the defined data update frequency is respected and operated in a consistent and automated manner, in addition to monitoring and alerting with recovery rules in case of failures.

How is CDP used to generate segments?

Although it is not an integral part of the CDP, business and marketing users interact with the CDP through data management tools, such as Microsoft Excel, Power-BI, Tableau, Qlik, AWS QuickSight, Google Data Studio or others that they already use today.

If the CDP has been well defined and is receiving data from different sources continuously, then the objective is met: to generate a customer segment for a specific marketing campaign.

It is very important to respect the legislation on the protection of data and personal information of individuals. Please inform yourself of current legislation in your country and corporate data security regulations to ensure good use of your customer data.

Benefits of having a CDP

Having the CDP opens up new possibilities, but above all it gives us the ability to learn about and from our clients: what they want (and what they don't!) , how they like to interact with the company, what they respond to, what inspires them and leads them to prefer your company.

#1. Segmentation

Generate appropriate, hyper-personalized offers, with a greater probability of purchase or conversion. Even better if this analysis activity, both business and marketing, doesn't require IT to be involved in generating the data.

#2. Understanding customer behavior

By tracking customer interactions with the business (purchases, returns, clicks on emails), we gain knowledge of their behavior, which will allow you to improve the way you serve that customer. If several customers behave in a similar way, then you have a new segment.

#3. Adjust bids based on what performs best

With greater knowledge of customers, you have data to develop a better offer, either for products and services or via a communication channel preferred by the customer. If a customer buys the same product every month, you can offer that same product in a better condition, or propose to try another one with a higher value but without risk, or a discount if they buy a larger quantity.

The possibilities are endless.

#4. Test and Develop New Products and Services with Customer Feedback

With customer data, we can quickly identify problems: why are so many shopping carts abandoned in a specific customer group? Will the process be very complex? What are the characteristics of this group that is having difficulties?

A survey can be sent to that segment to let us know what problems they are having. Once we have the corresponding results, we can grow a solution. For example, a simpler checkout with fewer clicks, Test this new check-out with that specific segment that was having problems. If it works out well, you use that checkout going forward for the other segments.

It is key to iterate this process as many times as necessary to create and improve products and services, and also to simplify the lives of customers.

Where to start?

For an organization that is just starting out, creating the CDP must be a quick and focused effort, born in marketing and business areas, with the participation of IT.

You can start with something basic but functional. To improve and add more data sources, enrichment processes and more segmentation attributes. Step by step.

It is essential to have greater knowledge of your customers, in such a competitive market in all industries, you must avoid making segmentation errors and know your customer as best as possible, if you don't, someone will do it for you.

At Kranio, we help our customers create and improve their CDP.

From establishing with initial data, orchestrating cleaning and enrichment processes until maturity is achieved in the use of CDP by Marketing and Business to see more advanced topics, such as more complex data sources, integrations and predictive analysis with machine learning.

Ready to transform your data into strategic decisions?

At Kranio, we help you implement Customer Data Platform solutions adapted to the needs of your business, allowing you to unify and make the most of your customer information. Contact us and discover how we can boost your strategy.