Companies today collect massive amounts of customer data. Business leaders hope to use this data to find valuable insights and drive smart decision-making, but there’s a problem.
Often, companies use many different systems to collect their customer data, without an effective way of bringing that data together. As a result, they end up with isolated data that only some departments can access. While it’s better than nothing, that approach to customer data is nowhere near the most useful.
Luckily, there’s a solution to this problem — using a customer data platform (CDP). So what is CDP, and why should companies use it? Let’s get into it.
What is CDP?
A customer data platform (CDP) is a software solution that creates a centralized database for customer data from many different sources. Within the CDP, you can view all data related to all the interactions and interactions with your company’s products. Companies use customer data platforms to unify their data and create complete, 360-degree profiles of each of their consumers.
These platforms generally integrate not only with your company’s data sources, but also with other systems like analytics and marketing software. CDPs are particularly useful for segmenting consumers into seemingly infinite groups and creating more personalized customer experiences.
Why businesses need customer data platforms to thrive
Data is arguably a modern company’s most important asset, yet so many use it sub-optimally. Customer data platforms help companies better use that data to understand their customers and, more broadly, their businesses.
Without CDPs, customer data often gets stuck in data silos. The systems that collect this data are generally incapable of directly integrating with other data sources. A customer data platform acts as a bridge that connects them.
In other words, businesses that don’t use customer data platforms will struggle to get the most out of their data. They’ll never be able to see the full picture of their customer data simultaneously — only little pieces at a time. So how can you develop a strong, data-driven strategy if you can’t even access all the relevant data together?
Customer data platforms allow you to easily pull all that data into one central location. From there, you can get the whole picture of your customer data. Use this gathered data to fully understand your customers — who they are, how they behave, and what they like and dislike. All the information together makes it possible to derive unprecedented data-driven insights. As a result, your company’s decision-making will be more informed and much more effective.
Benefits of using CDPs
Customer data platforms are critical, but if you’re not convinced, consider these specific benefits of using CDPs:
Improving customer lifetime value (CLV)
Increasing customer lifetime value (CLV) — the total amount a customer will spend on your business’s products or services during their relationship with your brand — is an incredible way to drive revenue. After all, acquiring new customers is much more expensive than retaining the customers you have. Anything you can do to boost CLV will help your bottom line.
Your CDP will help you identify high-value customers. Once identified, you can use the data in the CDP to create specific marketing campaigns and personalized experiences for those customers. You’ll increase their loyalty to your business and improve CLV in the process.
Enhancing data protection and compliance
Companies today must comply with many data privacy and protection regulations. They also need to ensure they build and maintain trust with their customers — no easy feat. Data privacy issues will ruin that trust immediately.
Many of these regulations address concerns about transparency and control over data. Using a CDP helps companies quickly identify what data they have for each customer, including the most recent changes or additions. They can then relay that information to the customer and change permissions from a centralized location if requested. Customer data platforms give companies more control over their data, making it easier to comply with data regulations like the General Data Protection Regulation (GDPR) and FedRamp.
Creating personalized customer experiences
It’s not enough anymore to simply provide great customer experiences. Companies must create personalized experiences for them to stand out and please customers. A whopping 87% of customers don’t mind the tracking of their customer journey for personalized rewards and brand experiences. And customer data platforms help companies do exactly that.
CDPs give companies a unified view of all of their customers. Thanks to the customer data platform, decision-makers can see what products customers look at, what they buy, which marketing campaigns they engage with, and more. With that information, businesses can create experiences tailored to each specific customer. So even as preferences change, you’ll always have the information you need to understand your customers and personalize their experiences.
Taking advantage of AI and machine learning
Customer data platforms offer better access to the data companies already collect about customers, but that’s not all they do. Many customer data platforms also include AI and machine learning tools. With these tools, companies can analyze their customer data more efficiently.
Even though using AI to help with data analysis is nothing new, combining AI with the complete customer profiles in CDPs is a game changer. You’ll be able to find intelligent insights in your data that your team might have missed otherwise. Depending on your customer data platform, it may even offer predictive recommendations to help you find the most valuable information in your data.
Ready to implement a CDP in your enterprise?
If you aren’t already using a CDP in your enterprise, there’s no better time to get started. Implementing a customer data platform will help your business get more out of your data, find new insights, and stay ahead of the competition.
There are many different data platforms out there, but Live Earth stands out from the rest. Live Earth offers enterprises unprecedented insights from diversified live data streams. You’ll be able to make business decisions confidently, knowing those decisions are backed by the most in-depth, current data available. Contact our team to learn more about breaking down data silos and improving business performance with data.