In today’s fast-paced digital landscape, the quest for meaningful engagement, conversions and growth places immense pressure on marketers to craft tailored experiences for each lead, prospect and client. But this level of personalization hinges on one thing: data.
To create a seamless (and more importantly, effective) customer journey, marketers leverage a variety of tools — and customer data platforms (CDPs) are undeniably the cornerstone. But what is a CDP, and how can you use it for your next digital marketing campaign?
What Is a Customer Data Platform?
A CDP is a unified platform for collecting, managing, analyzing and activating customer data in real-time. This software aggregates and stores your customers’ information from a variety of data sources to create individualized profiles of their unique interactions and behavior in a process known as identity resolution.
With this “single customer view” of unified attributes, you can:
- Analyze customer behavioral data.
- Segment audiences based on various attributes.
- Deliver superior, personalized customer service.
Of course, there’s a lot more a marketer can do with a CDP, but before we dive into use cases, it’s important to understand how it works.
How Does a Customer Data Platform Work?
A CDP functions in 4 basic steps that make up a cycle:
1. First-Party Data Collection
First, CDPs require data integration to connect with your organization’s existing sources and bring them together in a single location. Then, the platform collects all kinds of customer insights, including:
- Personal data: The customer’s name, location, contact information, demographics, etc.
- Behavioral data: Their website history, social media interactions, usage habits, etc.
- Qualitative data: Career information, interests and hobbies, pain points, preferences, etc.
- Quantitative data: Order history, purchase volume, number of items, etc.
While a CDP might house second and third-party data, acquiring customer information first-party is ideal as it can help you comply with data privacy laws. A CDP also provides governance to address quality and user consent concerns at the point of collection. But CDPs don’t stop at aggregating — they also unify the disparate data formats to make it easier to analyze.
2. Customer Data Management
As your CDP continuously collects data, it builds a customer profile for each user by attributing information to their matching identifiers — whether that’s an email address or a cookie ID. All of this logged information can be accessed in the user’s single customer view.
These profiles allow you to keep track of touch points across the customer journey while gaining continuous insights into users’ interests, buying habits and other behaviors.
3. Audience Segmentation
Based on the data collected and organized above, you can group these customer profiles by matching attributes to narrow in on different target audiences. With this segmentation built into your CDP, you can save time in downstream operations and centralize market segments across your organization’s systems.
4. Data Activation
Finally, data activation is when you leverage all of the customer insights you’ve gained to make actionable improvements in systems and processes. What does this look like?
Say you just published a gated whitepaper that focuses on a niche area of your industry and it gains a ton of traction (congrats!). You can now target the list of prospects and customers it generates with an email campaign highlighting your company’s various offerings in this area.
If you have a list of repeat customers, you could place display ads on websites they frequent to showcase products based on their order history.
With a CDP, the possibilities are endless. So how do you best leverage this software?
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Top 10 CDP Use Cases You Should Implement
Here are 10 of the most essential use cases marketers should adopt to make the most of their CDP:
1. Personalize the Customer Experience
Over 70% of customers expect a personalized experience that’s unique to their job, interests and pain points, per McKinsey. The data CDPs collect allows you to see where they move across your site and which funnels they fall into. Using these insights, you can tailor content recommendations, messages and promotional offers to their past and predicted behavior. That way, they have an easier time finding relevant information, pushing them further down the sales funnel.
2. Create a Seamless Customer Journey
As you collect more data, your CDP keeps track of each visitor’s movements to piece together a cohesive customer journey. Seeing how they interact with your site, where they go, and where they drop off can inform your strategy and overall campaign. By understanding which stage of the pipeline an individual user is in, you also enable your sales team to reach out at the right time with the right message to drive conversions.
3. Support Your Customer Support Team
In addition to supporting your sales team, a CDP can also help your customer service team succeed. While they’re on the front lines, interacting with customers daily, your CDP provides immediate access to intel from customer profiles. That way, your agents don’t need to go searching for details and customers won’t be left waiting on hold. This boosts satisfaction in the short term, but it also builds the foundation for long-lasting, loyal customer relationships.
4. Improve Customer Retention
Acquisitions are expensive — after all, that’s a large part of why marketers have turned to CDPs. But these platforms aren’t only for securing new customers — they can also help retain your existing ones. By analyzing customer engagement data and identifying those who may be close to dropping off, you can focus your efforts on them by reaching out for support or with a drip campaign that highlights your company’s unique value propositions.
5. Automate Marketing Tasks
A CDP makes it effortless to streamline your marketing operations. The platform seamlessly gathers data to construct personalized, segmented customer profiles, eliminating the need for manual data entry. Not only does this save time, but it also minimizes the risk of human error. By embracing the power of automation to accelerate tedious, repetitive tasks like this, your marketing team can redirect its focus and resources toward higher-value, more strategic initiatives.
8. Spot and Segment High-Value Clients
With all of your data accessible from a single platform, it’s much easier to identify your organization’s most valuable customers. These will be the people who spend a lot and/or make frequent purchases, so they’re obviously a priority. A CDP lets you create groups for these specific customers, enabling you to target them more effectively with tailored campaigns. That way, they stay your loyal customers.
7. Predict Customer Behavior
Traditionally, CDPs have only had the capacity to track activities that already happened, but more modern platforms come equipped with AI and machine learning (ML) capabilities. These powerful solutions leverage predictive analytics to forecast user behavior based on past decisions. With this insight, you can better determine the next steps or recommendations for a particular lead or customer, and you can also predict the probability of conversions, churn or even click-through rates.
8. Boost Cross- and Upselling Opportunities
As you use your CDP to analyze your customer behavior, you’ll also unlock new opportunities to cross-sell or upsell to your existing customers. Gather data about specific transactions to determine what information an individual might need next. For instance, if you notice a customer browsing a specific category of products or visiting related customer success stories, you could target them with a free demo or promo code.
9. Improve Marketing Efforts Across Multiple Channels
CDPs help marketers solve a few crucial problems: namely, a lack of quality, real-time data (often hidden behind silos). Because these solutions seamlessly merge customer data into a single platform, you can view critical information and track customer journeys across multiple channels. Not only does this make it easy to understand where and how to reach your target audience, but it also helps you ensure a consistent omnichannel experience.
10. Optimize Your Return on Investment (ROI)
Last, but not least, a CDP is perfect for optimizing your marketing campaign’s ROI. By tracking the performance of specific marketing channels and strategies, this solution helps you identify gaps in your sales funnel that could be causing drop-offs. As you make tweaks and improvements, a CDP makes it simple to track progress and gather feedback for continuous optimization.
The Bottom Line
A customer data platform is an invaluable tool in any marketer’s utility belt. From gathering compliant data to analyzing, segmenting and activating it, these solutions offer unified access to a breadth of insights that can inform your marketing efforts. As the digital marketing landscape continues to evolve, implementing these CDP use cases can ensure your strategy stays agile, adaptable and aligned with customer needs and expectations.
