CDP: All you need to know about customer data platforms
If you have been working in e-commerce and have not heard about Customer Data Platforms yet, then boy am I having a treat for you in this blog.
Customer Data platforms have been the new buzzword within e-commerce and marketing for a few years. And despite the technology being very new still, it has been a must-have for any successful e-commerce store.
In fact, 19% of businesses reported having one in 2020. And more than 40% said they were looking to implement a CDP in 2021.
But it can be a complex process to understand what it is and pick the right one. And you might be left with the question of what value you actually gain from having an e-commerce customer data platform when it comes down to it. So let’s simplify everything CDP and help you answer some of the most common questions we get from our customers about an e-commerce data platform.
What is a CDP?
CDP stands for Customer Data Platform, and to cut the chase short, the CDP is a platform that helps keep track of your customer data. That is the super short description. But there is much more to it. The data that a CDP can collect, consolidate, and analyze makes it so much easier to activate and create better, personalized experiences for your customers.
The different CDPs can vary to incredible extents in what they can do, their price, and their target customers. Some are made for enterprise businesses that can allocate millions to make sure their data infrastructure is crisp. Others, like Custimy.io, serve smaller and medium-sized e-commerce stores that want to be able to make decisions based on data instead of opinions.
What they do have in common, however, is the ability to take customer data from every source, standardize the data, and make the data available for any other system to act upon it.
Let me give you an example:
Data is collected from the physical POS system and from your webpage visitors. This data looks very different, but the CDP can make it fit the same format within a set of rules. From here, the data can be used to create unique profiles on every customer that interacts with you. We call it the Single Customer View and it gives you an overview of every customer on a 1-to-1 level. Having that allows you to understand how to create personalized, product-promoting emails for that particular customer.
The CDP can share all this information with your e-mail marketing tool. With that information, the tool can create much more enticing emails and offers for each customer. Cutting through the noise and delivering personalized emails. Talk about having a competitive advantage over all those boring, standard emails everyone receives normally.
So in short; the CDP takes the data, consolidates it, and creates segments and customer profiles based on it. And from here it can shoot it into the right tools so you can act based on insights and not opinions. No more data-silo with split information in all tools. Instead, you get a full overview of your business with the Customer Data Platform.
Benefits of using CDP in e-commerce
This example above might not fully give you an idea of why this tool is so incredibly talked about and the actual benefits of using it. So allow me to explain just exactly how you can gain value from using it.
Think of how many channels a modern e-commerce store actually has. Now imagine all of these being connected with a CDP. We are talking:
- Tracking of website
- Social media
- Customer service platform
- Google Ads
- Email system
- Point of sales
- And many many more
In order to collect all those data and create an all-around personalized experience for each customer it requires that those systems are not stuck in silos. If they are, it basically means the systems arent working together. And you will never gain a full overview of what is actually going on in the business.
A CDP can connect all those systems, so you don’t have to keep track of data in 30+ systems and spending hours upon hours analysing data. Often times, you probably even forget why you are doing it. Because, what is the end goal? How do you use that data for anything impactful?
The CDP allows you to work with your data strategically. It can give you that all-deciding overview of the full business, and a direction for your data-usage.
Collecting data with a strategic goal in mind allows you to work and activate your data insights to create personalized experiences for your customers. Something they demand from you today. They can have everything with just a few clicks. So if you can deliver experiences that fit what they want, you are far ahead of your competition. And that’s before we even dive into price, shipping, service, and all the other deciders in e-commerce.
The CDP is in many ways the key to working data-driven in e-commerce. It can be the difference between making sure the company rows in the same direction. If you don’t have one, you might just continue running in circles without the full data-insights needed in the market today.
However, a CDP might not be for every business. Some would argue that you can survive without. So let us have a look at what questions you can ask yourself in regards to a CDP.
Do I need a Customer Data Platform for my ecommerce?
Picking a CDP is one thing, and the options out there are many. But before you even get there there a few questions you need to ask yourself. This way you can determine if your e-commerce is ready for an e-commerce Customer Data Platform.
Some of the questions you ask yourself include:
What are your short-term and long-term goals for having a Customer Data Platform.
You need to understand your overall business goals and what you are hoping to achieve with a CDP. So make sure you know:
- How will you leverage the CDP?
- What features and capabilities are you looking forward to use
- Is your CDP only for data infrastructure reasons, or are you looking to empower the marketing department too?
- Are you trying to unify your data insights across the organisation to have a full overview of what is going on?
- How do you approach working with personalization today?
- What can you do for your customers if you have a single customer view, with a full overview of your customers?
- Are you looking to create smarter segmentation based on first-party data and increase profitability that way?
- Are you looking to be compliant with privacy regulations such as iOS14.5 and GDPR?
In order to get the most of a CDP, it is important to think not only of today and tomorrow, but also long-term. The short-term goals could be to be able to identify your most valuable customers. Or it could be to build a 360 segmentation strategy for your marketing teams to act on immediately.
A long-term goal could be able to align all departments across a single source of truth, so everyone works together towards the same goals with the most accurate data. It could also the ability to build a personalization strategy for your customer experiences and gain a competitive advantage there.
Other questions that you should consider include:
- How do you currently manage your customer data?
- How good is your marketing data processes right now?
- What systems do you want to integrate with your CDP?
- How do you align your marketing, product, sales, finance and management teams around data-driven decisions today?
Based on these questions and your needs and goals, it should be somewhat clear whether a CDP is the right tool for you.
However, the topic is just as complex as the software can be without the right guidance.
Data is a massive topic and something that takes up a justified important role in any discussion. But it can be incredibly heavy and hard to decifer so you can make sense of it and take actions. That is why we have started Custimy. We want to make the CDP technology accessible to everyone, regardless of budget, resources or data skills.
An e-commerce data platform for the 96% of the market.
Did you know that 96% of the e-commerce stores actually don’t have access to the data insights creating personalized experiences. Much less access to gaining a holistic overview of the business. Many cant even align all their data in one platform.
At Custimy, we have made it our goal to help SMBs be able to leverage their data. So they once again can compete against the biggest players with good data.
If you want to know how you can take your e-commerce to the next level hit up one of our CDP experts. Set up a free demo to learn more about CDPs and what you can do with it to beat the competition
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