Consumer data can offer businesses invaluable insights and advantages over their competitors, but only if they collect and analyze it properly. Many companies find it challenging to organize their customer data in order to get the most out of it. That’s where CDP architecture comes into play.
What Does A Consumer Data Platform Do?
A customer data platform (CDP) is software that helps organizations collect first-party consumer data in a central, unified database. Furthermore, the software allows companies to combine their consumer data from multiple siloed systems to create complete profiles for each customer.
So what types of consumer data does a CDP handle? In general, you can use a consumer data platform to manage any first-party consumer data you collect about your customers. This may include:
- Demographic data: Your customer’s name, age, gender, or physical location
- Behavioral data: Actions your customer takes on your websites, social media sites, emails, apps, or other points of contact. This data will typically also include the time the customer spent on these interactions and how frequent they were.
- Purchasing data: Data about purchases your customer made from your business and any returns they may have made.
By using a consumer data platform, you choose the data that is relevant to your company and customers.
The Role of CDP in Data Management and Analysis
A key problem for companies looking to use data analysis for better decision-making is data silos. Siloed data is only accessible to specific departments or business units in your company. This data remains isolated from the rest of your organization, making it more difficult or even impossible to get the full picture of all the data you collect. Consumer data platform architecture breaks down many of those data silos for better data management and analysis.
Think of the major systems you use to gather first-party consumer data. These typically include your email marketing system, customer service software, customer relationship management (CRM) system, and website, to name a few examples. Many of these systems operate completely separately from each other, but CDP architecture bridges those gaps. The platform connects all these platforms and systems to accumulate all your first-party customer data in one place. With all this key data together, it’s much easier to find and act on valuable insights stored within it.
Benefits of Consumer Data Platform Architecture
If you’re still not sure whether using a consumer data platform would be useful for your organization, consider these important benefits of CDP architecture:
Gain a 360 View of Your Consumers
With a consumer data platform, you can consolidate all your first-party consumer data and create unified, meaningful customer profiles for each of your customers. The platform will collect data from all your customers’ touchpoints. These include your websites, digital ads, emails, customer support, etc. — and bring it together for you to use.
A CPD makes it easier to view and analyze your customer’s interests and behavior as seen in your first-party data. This comprehensive view of your consumers allows for much better segmentation efforts. You can use the 360 customer view to create personalized marketing campaigns and develop a deeper understanding of who your customers are.
Automate Customer Data Management
Data management can be a time-consuming, tedious task that quickly eats up valuable resources. If you have to manually try to combine or track data from different, entirely separate systems that collect consumer data, you’re losing money on labor and opportunity costs. CDP architecture can help you automate these processes and simplify your consumer data management — saving you time and money. Using a consumer data platform will allow you to quickly process and access consumer data like never before.
Improve Customer Data Security
Part of proper data security is knowing what types of data you’re collecting and where you’re storing all those different types of data. Without a customer data platform, you may have consumer data sets stored and isolated in different places where pieces can be easily overlooked.
By centralizing your consumer data, a consumer data platform will improve your business’ data security. Not only will better consumer data security be a positive for your customers, but it can also help your bottom line. The average cost of a data breach has reached over $9 million in the United States as of 2022. Helping you avoid damaging, costly consumer data breaches is just one more benefit of CDP architecture.
Meet Data Privacy Regulations
Any company collecting consumer data needs to stay in compliance with data privacy regulations in the jurisdictions where they operate. For example, some of these regulations include the California Consumer Privacy Act (CCPA) of 2018 and the European Union’s General Data Protection Regulation (GDPR). Experts predict that we’ll see more data privacy regulations emerge as privacy concerns and technology change.
Using a consumer data platform can help you meet these current and developing data privacy regulations. One component of the regulations is giving your customers the right to access the data you collect on them. They also have the right to require you to erase their data. If your consumer data is siloed across many systems, following through on those requirements can be a significant burden. That’s not the case when you use a consumer data platform. Because a CDP acts as a centralized hub of your consumer data, using one makes it much easier to meet these requirements.
Gain a Deeper Understanding of Your Customers with CDP Architecture
Consumer data is incredibly powerful, but businesses need the right tools and software to utilize the data to its full potential. Thus, using a consumer data platform is the ideal solution. As a result, you’ll enjoy benefits like a deeper, 360-degree view of your customers, better data security, and easier compliance with data privacy laws. Enter Live Earth. Live Earth is a real-time data streaming and analysis platform built to help you get more out of your data. To learn more about the ways aggregating your data can benefit your business, Contact Us today.