Is It Time for a CDP? 5 Definitive Signs You’re Ready
A Customer Data Platform (CDP) can be beneficial for businesses that need to consolidate customer data from various sources, such as CRM systems, social media, and email marketing platforms. If a business wants to personalize customer experiences by creating targeted marketing campaigns or recommending relevant products, a CDP can help by providing a unified view of their customer data. Generally, we see businesses with a large and complex customer base benefit the most from implementing a CDP, but anyone trying to personalize content and understand their customer journeys may also find great value in utilizing a CDP. If you need a refresher on what a CDP can do, take a hop over to our CDP Basics blog post.
The big question a lot of marketers ask is, “how do I know when my company is ready to invest in a CDP?” Luckily, there are 5 definitive signs it’s time for a CDP. If any of the following ring true, it may be time to consider adding a CDP to your martech stack.
5 Signs You’re Ready for a CDP
Sign #1: Data Silos
Does your business have multiple systems or departments with fragmented customer data? Are there inefficiencies or complete gaps in transferring data between systems/departments? Are you still spending time normalizing, de-duplicating, and manually loading lists to share or augment customer data into the systems that need to use it? Do you have difficulty in gaining a comprehensive view of your customers?
If you answered yes to any of the questions above, then your company is ready. A CDP specializes in centralizing customer data from all sources to make it available to other systems for marketing campaigns, customer service, decision making, and all customer experience initiatives. It gives you a 360-degree view of your customers, including conversion event information, behavioral information, geographic and psychographic data. With a CDP, you can paint an accurate picture of your customer base and how they behave so you can effectively communicate with them in the manner, frequency, and channel they prefer, and even predict their future behavior based on past interactions.
Sign #2: Lack of Personalization
Are you sending campaigns out to all of your customers with the same subject line and the same content? When you hear “personalization,” do you think that means simply putting the customer’s name as a field merge at the top of the email? Are you typically using predefined and manually-managed customer segments to identify your target audience for your campaigns? Do you know when a potential customer lands on your website so you can tailor their experience?
When customer interactions and marketing efforts lack personalization, or fail to provide tailored experiences because of limited or no access to unified customer data, both you and your customers lose. CDP’s are designed to help make sense of the huge volume of customer data so that you can create hyper-personalized communication that engages your customers, makes them feel “seen” and valued, and delivers a real-time, tailored interaction with your brand. Additionally, with a CDP, you can define segments at an individual customer level based on their behavior, allowing them to enter campaign segments dynamically, even ones that you never even considered adding them to manually!
Sign #3: Incomplete Customer Journey
Are there gaps in understanding customer behavior and preferences throughout their journey? Do you struggle to optimize marketing campaigns and deliver targeted messages? Can you identify your most loyal customers? Are you able to predict your customers’ next action?
One of the most fundamental capabilities of a CDP is the ability to make sense of all of the customer data from first-, second-, and third-party data sources to create a single customer view. Most CDPs also contain identity resolution capabilities powered by artificial intelligence (AI) and/or machine learning (ML) to help fill in the gaps to ensure that data is clean, accurate, and reliable for use in omnichannel campaigns. With the customer profile in place, marketers can automatically and consistently drive relevant, personalized, and targeted content across all channels at scale. Even more powerful, AI capabilities can help you build predictive models to determine the next-best action to promote to each individual customer and provide real-time, in-session recommendations to accelerate conversions.
Sign #4: Inefficient Marketing Operations
Does omnichannel simply mean simultaneous use of all your channels to your organization? Have you actually abandoned your omnichannel strategy due to it being too hard to determine the impact of your marketing spend and the right message/channel mix? Speaking of marketing spend, are you clearly able to report on the ROI of your marketing efforts?
When marketing teams face challenges in coordinating campaigns across channels, integrating data from various sources, and executing effective omnichannel strategies, it’s time to consider a CDP. With all of your customer data integrated across all channels into a central location, you get a single point of control and the visibility to be able to make better marketing decisions on your interactions with your customers.
Consider those loyalty, discount, and renewal programs that take a huge manual uplift to build and maintain because you have to download lists of contacts who qualify each month, de-dupe and normalize the data, and then re-upload it back into your marketing systems. Sound familiar? CDPs make it possible for those campaigns to become streamlined and self-sustaining, allowing you to easily identify those customers who meet your criteria or who represent your highest conversion targets. Now, delivering special offers, early access, discount codes, and more becomes automated and, dare I say, easy!
Additionally, we are well aware that we cannot manage what we cannot measure. Many CDPs have advanced analytics features powered by AI that give you the ability to analyze, visualize, and measure effectiveness of marketing activities in near-real-time. This allows you to better forecast which channels and messaging will provide the best ROI for your business. These powerful analytics also allow you to activate next-best action recommendations and real-time campaign activations based on customer behavior rather than spending marketing time and dollars creating potentially ineffective campaigns.
Sign #5: Compliance and Data Governance Issues
Is your business struggling with data privacy and compliance regulations, such as GDPR, CASL, or CCPA? Do you have a centralized system to ensure proper data governance and consent management? Do you ever hold your breath as you deploy a campaign and hope you are compliant with your customers’ privacy preferences?
Consumers today demand more control over their data than ever before, and they expect companies to give them the ability to manage consent. Additionally, every day, we hear of more US states and countries legislating stricter privacy regulations that make marketers’ jobs even more difficult to keep up with changing demands. CDPs give your organization more control over data management including the ability to manage access controls and permissions to meet the most stringent privacy regulations. They can also integrate with consent management platforms to ensure that data privacy preferences are simply another part of the unified customer view provided to all connected data sources. And because a CDP allows you to house all of your data in one secure place, your customer data is less likely to be exposed due to malicious hacks or data leaks. While a CDP will not solve all of your regulatory requirements, managing your customer data centrally is essential to enabling compliance.
How many of these 5 definitive signs it’s time for a CDP are true for your business? In today’s world, you need to work smarter, not harder. Investing in a CDP can help address many of your business challenges by consolidating customer data, enabling personalization, improving customer journey insights, streamlining marketing operations, and ensuring compliance with data regulations.
Need help or advice on how to get started? Relationship One is here to help!
