Using Data Effectively Has Become a Top Challenge for Marketers
Originally posted on Attentive.com
You’ve heard the buzz phrases “mountains of data” and “information overload.” And it’s true—most organizations have more data at their fingertips than ever before. But the question surrounding data has shifted.
While brands used to ask how to collect data, the million dollar question now is how can we unlock the data we have in a way to fully enable the customer journey across all channels and touchpoints?
Recent research shows that data management has become a key marketing challenge. Knowing how and when to use the data that you’ve collected from all your different touchpoints—your website, marketing tools, systems, and programs—to deliver an optimal customer journey is where a CDP comes in.
If you’re in charge of your brand’s SMS marketing channel, a CDP can help you combine and use data from different interactions subscribers have had with your brand—both online and offline.
What is a customer data platform?
A customer data platform (CDP) manages customer data from multiple sources and combines it into a robust, centralized view. Think of it like this: A customer journey involves many touchpoints—social media, websites, chatbots, email, SMS, in-store, transactional interactions both online and off, customer support and more. A customer data platform manages all of these interactions to create a comprehensive and accurate customer profile.
By having a full picture of each customer, you’re able to make data-informed decisions, and you can design more personalized and effective campaigns across all your marketing channels.
CDPs and the customer journey
Let’s say you’re in the market for a new TV. You start with an online search for “best TVs in 2022.” Next, you look at reviews of the TVs listed. You might do further research like, is QLED or LED better? What are the different HDMIs? You may even watch a TV-buying video guide.
After your initial research is done, you’ll likely visit several retailers—online and offline—to compare pricing, shipping availability, and more. And that’s where customer data platforms fit in.
A consumer often interacts with the brand they end up purchasing from several times across a variety of channels—whether that’s their website, social media, email marketing, store location, paid ads, and more. And with each visit, the experience should become more personalized.
Every customer-brand interaction creates data that’ll help you personalize the customer journey—and this is data that your CDP can help you unlock and access.
What’s the difference between a CDP and CRM?
CDPs and CRMs (customer relationship management systems) are easily mistaken for each other, but each has a distinct purpose. Understanding the differences can help you get more out of both tools.
CRMs collect data to improve customer relationships. CDPs collect data to help understand your customers and their behavior. But let’s dig deeper.
CRMs help brands organize and manage customer-facing interactions, and are typically designed to support customer-facing roles. Both Customer Service and Sales teams use CRMs. But marketers do, too. The goal of a CRM is to help you acquire and retain customers and improve person-to-person interactions. CRMs collect data from:
- Support tickets
- Website form fills
- Customer interactions with your team, which include calls or emails, follow-up communications, a customer’s past purchases, or a customer’s number of inquiries and support requests
A CRM tracks what happens between customers and your team. For example, let’s say a customer has submitted two support tickets; one is still open and one is closed. The CRM can send automated emails to the customer to let them know the status of their ticket and can generate a report that’ll let your brand know the type of ticket, response time, and more. All of the information gathered by the CRM helps inform what steps to take to retain the customer.
CDPs work more behind the scenes, as tools to help marketers activate their data in cross-channel campaigns. A CDP takes the data from centralized sources like a cloud data warehouse or other data repository, and augments it with data from a customer’s behavior and interactions to make it useful to brands. They transform data into easy-to-digest segments that you don’t need advanced data mining skills to work with.
In other words, CDPs manage and store data, unify it, and unlock the value in it so you’re able to turn insights into action. CDPs manage data from every potential touchpoint a customer might have with your brand, including:
- Your website
- Social media
- Loyalty programs
- And more
When integrated with your entire marketing tech stack, CRMs and CDPs provide a consistent, personalized customer experience.
What are CDPs used for?
If you have data you’re struggling to make sense of and use, an orchestration CDP that can manage, segment, and activate your data may be for you. There are four main types of customer data a CDP can use:
- Identity data: name, age, location, contact information
- Behavioral/transactional data: what devices a customer uses, website visits, social media engagement
- Qualitative data: how the customer heard about your brand, product ratings, attitude information such as favorite color
- Descriptive data: hobbies, career, anything lifestyle related
For example, a CDP can use transactional data (such as a page they visited on your website) and qualitative data (such as a five-star rating on a past purchase) to help you recommend products that reflect the customer’s interests and preferences.
CDPs give you a complete view of each customer
CDPs track all interactions your customer has with your brand. Imagine that a customer comes into your store and enters their phone number to join your loyalty program. They make a purchase that’s added to their profile. Your brand can use this data, along with seasonal trend data, to inform what offers to send them.
CDPs bring data together from different channels
Unifying separate channels across your tech stack is hard—data is often siloed. A CDP can help you make sense of how your customers are experiencing your brand over time, and across channels.
CDPs can help you further segment your audience
CDPs create real-time profiles based on touchpoints and events. Every time an action takes place—such as purchase history, cart abandonment, loyalty, app usage—the customer’s profile is updated, so you can deliver the most relevant experience to individuals across a variety of channels.
You can use a CDP to build segments, manage segments, and review their performance. Ultimately, a CDP is a powerful tool that helps you manage and activate customer data to provide a more targeted, personalized customer experience.
CDPS can help orchestrate the customer journey
Some CDPs can help you fully orchestrate and automate the customer journey across all your tools and end channels. Sending the right message at the right time and on the right channel based on your customers’ specific actions, history, and profile means more impactful experiences.
Using a CDP to amplify your SMS strategy
An orchestration CDP is a great partner for your SMS marketing platform, and can extend the impact of SMS to work even more effectively in a cross-channel strategy. Together, they improve the overall customer experience. Given that our phone numbers are powerful identity markers, SMS is already an effective tool to collect zero- and first-party data, and to use that data to deliver highly personalized customer experiences.
A CDP improves subscriber profiles with key data from other sources. This lets you broaden your dataset and deliver even better experiences via SMS and across your other marketing channels.
Let’s say a customer has recently bought a dress on your website. The same customer has also engaged with your social posts that showcase gold jewelry. Your CDP can combine those two touchpoints and update the customer’s profile, to trigger a text message send recommending a gold necklace that goes with their new dress.
The data works both ways. For example, your CDP can use data from your SMS campaigns (such as what types of messages or offers subscribers click-through on and go on to purchase) to fine-tune your audience targeting on paid ads.
If you have customers who frequently repurchase a product, like vitamins or shampoo, you can use data from your CDP to find out how often they’re reordering. Then, automatically send a helpful text message reminder a week or two before to remind them to replenish.
Using a CDP to build out your zero- and first-party data strategy
CDPs are becoming more important as marketers rely less on third-party cookies due to privacy changes, and focus more on zero- and first-party data. When building out your strategy, here are some best practices to follow:
- Integrate your CDP with channels and data management platforms you’re using to collect different data points.
- Progressively profile by collecting the right information at the right time rather than asking for everything upfront.
- Interpret the data in a way that helps you best understand customer intentions (for example, look at where the customer is, what they are trying to do, and what it looks like when they have a good experience).
- Don’t over-collect data without knowing how to use it—understand what you want to measure first, and create goals beforehand.
- Create a feedback loop—turning your results and insights into customer experience improvements—and make informed decisions that help with customer retention.
Choosing a CDP that helps harness and activate your data from any source can extend your marketing investments into a data-driven, cross-channel strategy. This allows you to drive hyper-segmented messages that coordinate seamlessly to inspire more meaningful customer experiences.