Mastermind Steve Jobs’ 2010s aphorism hasn’t aged at all. Having information about one’s customers’ needs is not only helping in providing them with a ‘good’ experience, but it also helps in connecting with them with the right opportunities, at the right moment of time. According to a 2018 PwC study, 32% of all customers would stop doing business with a brand they loved after one bad experience. A drastic figure showcasing the need for companies of knowing customers better than ever before.
Unsurprisingly, becoming customer-centric has become a cross-industry theme: Loyalty programs, marketing campaigns and product recommendations are getting more and more personalized based on customers’ behavior. Marketing teams identify and capture information from different digital touchpoints to help them understand – and act according to – customers’ behavior and expectations before, during and after a purchase.
At least, that’s how it’s supposed to work.
In the real world, data flows in all forms, structured (data in databases), semi-structured (text information) and unstructured. With the data coming in all formats, marketing teams face the challenge of finding a single source of truth (SSOT) that could be used as a reference to generate consistent and personalized engagement with the customer across different channels. Without a single source of truth, data sets only exist in siloes and each department operates as a black box.
Customer data collection has been around for decades. Most of the customer-driven organizations have been collecting data in various platforms. Be it in the form of direct interaction with the customer, captured through transactional databases stored in Customer Relationship Management (CRM) systems or anonymized data collected from various marketing tools or websites stored in Data Management Platform (DMP) or Audience Data Platform (ADP).
With the fast-paced digitization of all industries, the data points available that could be linked to a customer are not just limited to transactional data or cookie-based interaction data. The Marketing teams now require a simple consistent playground capturing customer information and providing a 360° view of the customer. They also require a solution capable enough to handle, process and convert the data of a customer into value.
The starting point for this solution is capturing and collecting all the data, be in historical or real time into a single source of truth. The data ingestion can be divided into two segments, batch ingestion for historical data and stream ingestion for real time data.
Moving to the naming convention of this modern solution, after CRM, then DMP, a new name was coined for the platform that provided a single view of the customer called the Customer Data Platform, or CDP.
Going by the textbook definition, a Customer Data Platform is an environment which creates a persistent, unified customer database that is accessible to other systems. In terms of data collection, CDP moves a step further from previous solutions and is capable of handling 1st, 2nd and 3rd party data – which might come in as particularly handy as regards Google’s decision to stop all 3rd party cookies by 2022… Data is pulled from multiple sources, cleaned, and combined to create a single customer profile. This structured data is then made available to marketing automation tools and all other systems across multiple channels.
Once the data is unified, deduplicated and segmented, the data becomes available for reporting, analytics, and machine learning to generate insights and predictions on customer behavior to unlock hidden patterns that can enrich customer journey analytics, content or offer personalization, next best recommendations and many more. These insights can then be leveraged to drive marketing strategies and data can be activated across multiple channels, whether at a specific time – “triggered moments”, or in real time – “real-time moments.”
In a nutshell, a Customer Data Platform solution must:
With such promises, no wonder Customer Data Platforms have been the hot topic of every discussion relating to digital transformation or marketing for some years now, right?
With marketing teams looking to get the right set of tools and solutions for their playground, they quickly find themselves overwhelmed by the CDP decision-making process: the market is flooded with vendors proposing their own customized solution. Most CDP vendors provide Software-as-a-Service (SaaS) solutions – user-friendly applications without the complexity in setting up the solution, which are mainly marketing focused and native to one major cloud provider. Some CDP vendors can even set up their SaaS solution on top of your existing cloud solutions if you already have a single source of truth or a data lake. The customer data platform can also be set up internally by your existing data teams in the cloud solution that already exists. Meanwhile, at the organization level, pressure is building: why can’t the existing tech stack cater to the needs?
Now, whether you’re considering leveraging your own infrastructure / tools or purchasing an external solution, beware the trap of making the “I want a single customer view” ambition your only North Star. Companies spend huge amount of money on infrastructure, solutions, and tools, without sufficient planning of resources and business needs. Some end up forever in debt of technology choices. Purposeful tech should be your main concern. Whatever their undeniable potential, technological solutions must always be understood as capabilities, acting as enablers to the company’s strategy.
So the smartest move is in fact… to start at the end: what do you want to be able to do? Technology IS an important enabler but it must always be the result of a thorough strategic thinking on how – and why – to make the company more customer centric.
What you need is to define a strategy to cater to your business needs. Plan the next 5-year goals for your business. Imagine you already have a CDP or all the customer data your marketing team needs at their disposal, how will they use it? and how will they engage with the customer after that? What you need is to define what data you want, and once you have it what you want to do with it.
Map out the strategy into 1/short term goals, 2/midterm goals, and 3/long-term goals. Short term goals to achieve quick wins and showcase the benefit of your investment are crucial. Quick wins can always be achieved by leveraging the existing infrastructure with some add on capabilities; Identify the key use cases that you would like to start with, keeping in mind the long-term vision to drive your business using customer data. Only then you can develop your roadmap while deploying required technological assets on the way, delivering business value at each step. “Sustainable” in this case also means “flexible”, as the chosen solution must be flexible enough to
Meanwhile, bridging technology, data and business impact is the key to solve short term challenges while keeping a long term, more sustainable vision.
Customer Data Platform: the 12 questions that will put you on the right track
Thought Leadership
Thought Leadership
