What Marketers Should Look for When Choosing a Customer Data Platform Vendor?
The most sought-after tool for a Chief Marketing Officer (CMO) is Customer Data Platform (CDP). According to Gartner’s research, $1.8 billion in venture capital investments were made into CDPs in 2019. Increasingly, vendors are offering or acquiring their CDP solutions, which will grow the CDP market from $2.4 billion in 2020 to $10.3 billion in 2025. There are plenty of reasons why the hype is so great. But first, let’s understand what a CDP is and why do companies need it?
What is CDP, and Why do you need one?
Founded in 2016, the CDP Institute describes Customer Data Platform as a package of software that provides a persistent and unified customer database that is accessible by other systems. In simple words, the CDP acts as the brain that manages all your customer experience across various channels. Using this technologically advanced solution, you can collect data from online and offline sources and connect them to a single customer profile.
CDPs operate differently from traditional database management systems or other components of your marketing stack; they keep track of customer data in real-time. Using CDPs, you can maximize customer interactions within seconds of their first interaction with your brand, providing tailored experiences for large audiences or individuals.
What can you experience from a CDP?
You’d be surprised how hard it is to decide between CDPs. Make sure that you do your research before choosing a CDP suited to your specific requirements and needs. Your data will be more valuable to you if you conduct proper research and better understand your customers. The below points serve to recommend what your CDP should do to improve your engagement and experience.
* Single View of Customer Across All Channels: CDP collects and organizes inconsistent data from multiple online and offline sources into one to create a unified view of the customer. Due to the centralization of customer information, one can get a 360-degree view of individual profiles available for immediate use.
* Customer Segmentation & Personalization: Deliver omnichannel experiences throughout the entire customer lifecycle by segmenting your customers based on their behaviour (RFM, LTV prediction).
* Predictive Customer Scoring: Predict proper customer behaviour (visit, email open, purchase probability, churn) and take proactive actions.
* Smart Behavioral Retargeting & Lookalike Advertising: The integration of Facebook Ads, Google Ads and other channels creates opportunities to run acquisition and retention campaigns beyond your website.
* Product Recommendations: Use different recommendation models, including “similar products” and “customers also bought”, to sell, up-sell, or cross-sell your products and increase brand loyalty while driving engagement.
* Conversion Rate Optimization & A/B Testing: Create a stunning look for your website. Optimize your ROI by adding intelligent overlays (pop-ups) to your website or by sending abandoned cart emails. Use A/B testing to create different designs and discover which model works best.
* Omni-Channel Automation: Enhance your chances of acquiring and retaining customers by sending them personalized and timely messages via complex workflows and engaging them on all channels during the lead generation, nurturing, and buying processes.
* Email Deliverability Enhancement: Achieve higher open rates for emails. The amount of time each user spends opening his or her emails should be determined by the CDP, allowing you to send your email at the optimal time to each recipient.
* Reviews Optimization: Improve your customer satisfaction ratings through personalized omnichannel communications and analyze your Net Promoter Score (NPS) scores.
What marketers should look for when choosing a CDP?
While choosing a CDP, marketers should always focus on the following points:
* Is Real-Time Data supported?: Within a few seconds of your CDP receiving data, it should update your customer segments and profiles. It should include both known and anonymous customer profiles. It is essential to personalize an experience for both known and unknown users in real-time across multiple platforms.
* Compliance and Security Features: With all available first-party data collected in one system, a CDP should enable your organization’s ability to respond to General Data Protection Regulation (GDPR) and meet the strictest security standards, including on-premise and private cloud solutions.
* Stitching and Resolving Visitor Identities: As a CDP, its best feature is creating a customer profile based on user behaviour across devices. It can also bind anonymous user behaviour to identified users (reverse stitching). Quite simply, this is what sets a customer data platform apart from any other master data management system.
* Attribute and Segmentation Approach: The CDP you choose should enable you to segment customers based on fixed as well as dynamic attributes. Users must move between segments in real-time so that the experiences they receive are relevant to their needs.
* Affordability and Technology Integration: It would be best if you chose the tool that integrates most readily with your technology stack. Find an agency that offers both web-hooks and bi-directional connectivity. As a result, you will be able to add more integrations. You will incur high costs and resources if the tool does not match your business needs.
* Full-Service Agency: CDP is a complex software which integrates multiple channels. The Brand would require an expert marketing agency to implement, integrate, and optimize the customer experience. By leveraging a marketing agency’s expertise in customer data and identity management, marketing channels, ethical data use, creative content and other data service offerings, a brand can align its business strategy with its technology ecosystem and achieve success.
* Is there a Roadmap?: Inquire about a vendor’s roadmap when evaluating tools. It’s crucial to know what features and integrations they have planned out for the following year. Buying an out-of-date tool is a bad idea. It’s also a good sign when a vendor’s roadmap includes updates and support for the customer.
Using a CDP can improve customer engagement and increase digital conversions for your business. Every year, more and more customer data platforms are being introduced to the market. It is essential to carefully evaluate vendors to select the CDP platform to deliver the capabilities you need.
CDPs should offer more than just what you need now. In addition, it should fulfil your long-term needs too. Ensure you choose a solution that covers more than your initial requirements because you will outgrow them shortly.
Keep an eye out on our blog for more CDP posts.