Customer Data Platform (CDP): Why does Your Business Need CDP
A customer Data Platform (CDP) is software that helps organizations unify their customer data and create a single view of the customer.
We give marketers a 360-degree view of customers, which can be used for segmentation, personalization, and omnichannel marketing campaigns.
The customer data platform market is expected to grow from USD 1.27 billion in 2018 to USD 3.39 billion by 2023 at a Compound Annual Growth Rate (CAGR) of 22.1% during the forecast period.
The major drivers of the CDP market include the need for real-time customer insights, increasing complexity in customer data, and stringent government regulations surrounding data privacy.
What is a CDP, and Why Does Your Business need one?
A CDP, or customer data platform, is a system that collects data from multiple sources and consolidates it into a single database. This data can then create a 360-degree view of the customer.
CDPs benefit businesses by providing a complete picture of the customer, which can be used to create targeted marketing campaigns, improve customer service, and increase sales.
In addition, CDPs make it easy to track marketing campaigns’ ROI and measure the success of customer service initiatives.
There are many different types of CDPs on the market, so it’s important to choose one that meets your business’s unique needs.
For example, some CDPs are designed for small businesses, while others are better suited for enterprise-level companies. Do your research before selecting a CDP for your business.
However, the lack of technical expertise and high initial investment costs are some of the major factors restraining the growth of this market.
How does a Customer Data Platform work?
A customer data platform collects customer data from multiple sources and makes it available in real-time.
This allows businesses to have a complete view of their customers, which can be used to improve the customer experience.
A typical customer data platform will collect data from the following sources:
Online behavior (such as website interactions, online purchases, etc.)
Offline behavior (such as in-store purchases, phone calls, etc.)
Social media interactions
Third-party data (such as demographics, interests, etc.)
Once this data is collected, it is processed and made available in real time through an API or dashboard.
This processed data can then be used to improve the customer experience in several ways, such as:
By understanding a customer’s complete purchase history and journey, businesses can send more targeted and relevant marketing messages that are more likely to convert into a sale.
Businesses can provide better and more personalized customer service by having a complete view of the customer.
For example, suppose a customer calls with a problem. In that case, the agent can see the entire history of that customer’s interactions with the company and better solve the problem.
By understanding what customers want and need, businesses can upsell and cross-sell products and services that are more likely to be purchased.
For example, if a customer buys an effect on your website, you could offer them complementary products they may be interested in.
Customer Data Platform (CDP): what is it, and why do You need it?
In a world where data is collected at every turn, it can take time to keep track of everything. This is especially true for businesses that must manage customer data from various sources.
This is where a customer data platform comes in. A customer data platform is a single, unified system that collects customer data from multiple sources and makes it available in real-time.
This allows businesses to have a complete view of their customers, which can be used to improve the customer experience.
CDPs are built on a centralized database that collects customer data from various sources, such as website interactions, social media interactions, offline interactions, mobile interactions, and third-party data providers.
This collected data is then cleansed, normalized, and enriched before making it available to authorized users in real-time through an easy-to-use interface.
CDPs provide marketers with a complete 360-degree view of customers that can be used for segmentation, personalization, and omnichannel marketing campaigns.
CDPs are different from Data Management Platforms (DMPs)
Customer Relationship Management (CRM) systems and Data Warehouses (DWs).
A DMP is primarily used for audience segmentation and targeting, whereas a CRM system manages customer interactions and tracks sales pipeline progress.
DWs are used to store historical data for reporting and analysis purposes.
In contrast, CDPs are designed to provide real-time insights into customer behavior by unifying all customer data into a single platform.
Benefits of using a Customer Data Platform
There are many benefits of using a CPD for your business. The most important benefit is that CPDs make creating personalized experiences for your customers easier.
By unifying your customer data, you can gain valuable insights into who your customers are and what they want.
This allows you to create targeted campaigns likely to connect with your audience and drive conversions.
In addition, CPDs make it easier to track your marketing efforts and measure their ROI.
By unifying your customer data in one platform, you can see which marketing channels drive the most conversions and adjust your budget accordingly.
It also lets you track individual campaigns’ performance and make necessary changes.
CPDs allow you to scale your marketing efforts quickly and efficiently.
As your business improves, you can add more data sources to your CDP without rebuilding your system. This makes it easy to keep up with your competition as you grow.
Increased Customer Engagement
A customer data platform can help you increase customer engagement by giving you a better understanding of your customer base.
By agreeing on who your customers are, what they like and dislike, and their needs, you can create targeted marketing campaigns that are more likely to engage them.
A customer data platform can help you segment your customers into different groups to tailor your marketing messages to each group.
Improved Customer Retention
A customer data platform can also help you to improve customer retention. By understanding why customers leave, you can take steps to prevent them from going in the future.
A customer data platform can help you identify at-risk customers so that you can keep them from leaving.
Increased Sales and Revenue
A customer data platform can also help you to increase sales and revenue.
By understanding your customer’s buying habits, you can create targeted marketing campaigns that encourage them to buy more from you.
A customer data platform can help you to upsell and cross-sell products and services to your customers.
Improved Customer Service
A customer data platform can also help you to improve customer service.
By understanding your customers’ needs and wants, you can provide them with the type of service they are looking for.
A customer data platform can help you to resolve issues more quickly and efficiently.
Reduced Marketing Costs
A customer data platform can also help you to reduce marketing costs.
By understanding which marketing channels are most effective for reaching your target audience, you can focus your marketing efforts on those channels.
A customer data platform can help you automate your marketing tasks, saving you time and money.
More Significant Insights into Your Business
A customer data platform can also give you more significant insights into your business.
By understanding how your customers communicate with your business, you can make changes that improve their overall experience.
A customer data platform can help you identify new growth and expansion opportunities.
Conclusion
In today’s digital world, it’s more important than ever for businesses to understand their customers thoroughly.
That’s where Customer Data Platforms (CDPs) come in. CDPs provide firms with a 360-degree view of their customers that can be used for segmentation, personalization, and omnichannel marketing campaigns.
If you want a competitive edge in today’s marketplace, investing in a CDP should be at the top of your list.
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