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Blog — Lead generationZero-party data

Why you need a customer data platform: Mastering personalization and customer loyalty

Discover how customer data platforms (CDPs) can make your marketing smarter and your customers happier.

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Customer loyalty is in flux right now. Customers are researching which brands to support—and many are jumping ship. 

Why? 

Because they expect unparalleled personalization (think Netflix and Amazon) on cue. 56% of customers expect personalization from brands in exchange for re-ordering. 

But for brands, high levels of personalization mean mining key customer details across data sources and customer touchpoints and turning them into experiences. To add fuel to fire, departments often work in silos, creating patchy customer journeys. In fact, 66% of teams view other departments as competitors—not colleagues. 

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Enter Customer Data Platforms (CDPs). In this article, we'll look at how they can enhance customer insights and elevate your marketing strategy. 

What is a Customer Data Platform?

Customer data platforms (CDPs) are software solutions that consolidate customer data from different systems into a single unified database. 

They create 360-degree customer profiles, enabling brands to understand their customers’ journeys, segment their audiences, and power their marketing initiatives with reliable data. 

CDPs work by connecting to various sources and aggregating their customer data in one place. Typical sources include analytics tools, customer relationship management systems (CRMs), content management systems (CMSs), point-of-sale (POS) devices, APIs, customer service solutions, and email marketing platforms.

People sometimes confuse Customer Data Platforms (CDPs) with Customer Relationship Management Platforms (CRMs) and Data Management Platforms (DMPs). Here are some key differences:

Feature Customer Data Platform (CDP) Customer Relationship Management (CRM) Customer Data Management (CDM)
Primary purpose Unifying customer data across the organization Managing customer relationships and sales processes Collecting and managing audience data for advertising
Data sources Integrates data from multiple sources (online/offline) Primarily collects and manages customer interaction data Collects anonymous data from various sources
Data type Both identified and anonymous data Identified data (customer profiles and interactions) Anonymous data (cookies, device IDs)
Data storage Centralized and persistent database Customer profiles and transactional data Segmented audience data stored temporarily
Personalization support High (enables personalized marketing campaigns) Moderate (based on customer interaction history) Low (focuses on segmentation for ads)
Integrations Extensive (marketing automation, analytics, CRM, etc.) Integrated with sales and support tools Integrated with ad networks and DSPs
Customer view 360-degree view (holistic customer profiles) Detailed view of customer interactions and history Aggregated and segmented audience view
User base Marketing, customer success, and business intelligence teams Sales, customer service, and marketing teams Advertisers and digital marketers
Use cases Personalization, customer journey mapping, segmentation Sales tracking, customer support, relationship management Audience targeting, programmatic advertising

How CDPs enhance customer insights

When it comes to understanding your audience, Customer Data Platforms (CDPs) are transformative. Here’s why:

  • 360-degree view: CDPs knit together every shred of customer data across social media channels, email interactions, and your CRM. This overview can help you go beyond your ideal customer persona (ICP) and into details such as the customer’s journey, lifestyle, and preferences.

  • Actionable insights: How do customer details translate into sales? These details help marketing teams anticipate needs and craft campaigns that resonate on a deeply personal level. 

Say you’re a DTC brand selling apparel, and you notice a trend where a significant segment of your audience browses fitness-related products in January—likely due to New Year's resolutions. A CDP can help you craft targeted campaigns offering special deals on your sportswear line right after the holidays. 

Integrating CDPs into your marketing strategy

While deploying a CDP is the first step, integrating it with marketing is how you move the needle.

Three things you should keep in mind:

  • Start with well-defined goals, like increasing customer lifetime value, reducing churn, or enhancing personalization

  • Aggregate and analyze the data in your CDP to build segments and customer profiles for more effective targeting 

  • Create collaboration between marketing, sales, and customer service to make sure every team contributes to and uses the data 

Once you’ve consolidated customer data from different departments, it's time to build customer journeys.

To start: 

  • Map out key interaction points across different channels 

  • Identify behaviors that lead to conversions 

  • Use insights to predict future interactions and touchpoints

In a recent survey, respondents who reported having a stronger understanding of the customer journey (79%) also believed that their department and company goals were significantly more aligned.

Implementing a CDP: Considerations and what the future holds

Choosing the right CDP isn't about locating the most advanced tool on the market—it's about finding the one that fits your business needs like a glove. 

Start by nailing down the must-have features that align with your strategic goals, such as integration capabilities, real-time data processing, and scalability.

Once you’ve made a note of the features you need, think about how and whether these tools can keep up with as you scale. 

As we peer into the future, the connection between deep data insights and real-world applications will deepen. 

  • Predictive marketing: CDPs will increasingly predict customer needs and marketing trends, allowing businesses to be proactive rather than reactive. For example, a travel company may use CDP insights to predict off-season lulls and offer targeted discounts to prospective travelers.

  • Innovation in customer engagement: CDPs will continually transform how businesses understand and interact with customers. For example, a healthcare provider may use a CDP to track patient interactions and notify them of prescription refills or interlinked symptoms. 

  • Promoting a common understanding of the customer across the organization: Right now, sales and customer success teams report a better understanding of the customer than other departments. CDPs can help bridge this knowledge gap by centralizing customer data. A shared understanding means more cohesive strategies, operational efficiency, and a cooperative culture.

Prepare to see CDPs take the lead in driving forward-thinking marketing strategies.

Want to learn more about how CDPs can help you build more customer-centric teams? Head over to Typeform for Growth. 

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