What is a customer data platform (CDP)?
A customer data platform (CDP) is software that combines data from multiple tools to create a single customer database. Having a unified customer database of all the data collected across various ecommerce platforms and tools will help you to create more personalized experiences for each customer.
How does a customer data platform work?
Customer data platforms collect data from whatever digital channels a brand is using to connect with customers and make sales. These can include your website, social networking platforms like Facebook, email, and any other place a customer might interact with your brand.
A good customer data platform will tie together databases that aren’t set up to share data with each other.
For example, a cloud data management platform typically won’t be set up to share data with customer service software or ecommerce platforms. Therefore, you need to consolidate all your first-party data and third-party data into a unified customer profile.
Once that’s accomplished, you can send all the data you’ve collected to other systems like Facebook ads or email marketing software so you can deliver personalized experiences.
The benefits of customer data platforms
1. Help to avoid data silos
Data silos happen when different parts of an organization don’t share all the data they have with one another. For example, a marketing team might not be able to access the customer data that the customer service team collects.
Customer data is both valuable and hard to come by, so you want your ecommerce business to take full advantage of every bit of it. That means that your customer profiles should include as much purchase data, behavioral data, and transactional data as possible.
Data silos prevent the creation of an accurate customer profile, and customer data platforms prevent data silos.
2. Collect data directly from your audience
A customer data platform can also collect customer data that you wouldn’t otherwise have access to. That’s because many CDPs collect data directly through tracking software that observes customer interactions in real time using pixels and other mouse tracking technology.
Some customer data platforms will even allow you to see all the mouse movements a visitor makes during an entire visit.
Even better, this is first-party customer data that you know is accurate (because it comes directly from customer behavior that you can observe).
3. Help to get more customer insights
The more customer data you’re able to collect in one place, the better you can get to know your customers. Unified customer profiles are a necessity for personalizing the customer experience.
Each data point you have is a potential differentiator between customer segments, and each can be the basis for different personalized marketing campaigns. For instance, you can show regionally-specific shipping information to customers based on where they’re located.
The more data you have about each customer, the better you can tailor your messaging.
4. Help to unify multi- and cross-channel marketing efforts
If you use multiple channels to run personalized marketing campaigns, then a customer data platform can help you create a consistent customer experience across all of them.
That’s because you aren’t limited to using only the data that each platform has access to—you can optimize the customer experience using all the data you have.