A customer data platform provides many possibilities to businesses of all sizes.
All gathered and combined client information helps marketing teams save their time, scale up advertising resources, and lead to consistent customer communication across various channels.
For that reason, small, medium-sized, and large companies would have the opportunity to engage target clients in different ways, creating long-term and worthwhile rapport between parties.
But what is a customer data platform?
What are the different kinds of CDP? Why do you need a CDP? What are the factors to consider when selecting for the CDP that suits all your unique needs?
In this guide, you will know everything about the customer data platform. Keep reading for more information! Enjoy!
What is a Customer Data Platform?
A customer data platform (CDP) refers to the packaged software developed for creating a database highly accessible to other important systems, according to the CDP Institute.
Popular as packaged software, CDPs are prebuilt systems to meet every client’s unique needs and requirements.
Marketer-managed, CDPs are available with a user interface that’s easy to navigate. Suitable for less tech-savvy, CDPs don’t require any programming skills.
This enables your business not to depend on Information Technology, avoiding unnecessary expenses heavily.
CPDs gather data from different sources, which allows you to create a complete and accurate customer profile. Every client’s information is well-detailed, updated, and secure for future references.
CPDs also provides a great business access to needed customer data, improving employee’s efficiency and productivity at the end of the day.
Kinds of CDP
With the increasing demand from the public, CDPs are now available in different options. While the number of choices can be an advantage, it’s complicated to select the right CDP for some of your business needs.
Here a few of the customer data platforms you might take into consideration:
Commonly known as Data CDPs, Access CDPs are ideal for those who need to combine information and make it accessible to other systems.
Another second most popular option is the Analytics CDP. What sets it apart from the rest is that it has the functionalities of Data CDPs
Its capacity to provide experts-recommended and proven analytical applications has also been a favorite for many.
Usually, these analytical applications consist of revenue attribution, customer segmentation, and predictive modeling.
Engagement CDPs, on the other hand, is packed with the functionalities of analytics and access CDPs, making it a one-stop solution you deserve.
But wait, there’s more! Engagement CDPs also come with campaign management capabilities, including message customization and real-time interactions.
Which is the best option? Engagement CDPs are recommended and effective. But before you make a decision, identify what you extremely need.
Why Should You Invest in CDP?
You have exerted great efforts in increasing profits from your customer’s first purchase.
Why is the ROI lower than you’ve expected? Probably, you’re trying your best to find what caused the problem.
While there are various things to remember, focus on how to boost customer retention.
Generally, prospective clients are retained thru switching costs. Recent studies also show that switching costs can effectively lead to customer loyalty.
There are three switching pillars, according to experts. These are procedural, relational, and financial.
In procedural switching costs, the possibility of retaining customers is higher than ever. Usually incurred when switching providers, these might include explicit and less explicit financial costs.
In relational, it is also called as the emotional relationship every customer develops with a company.
Then, it becomes better with the creation of moments that clients can associate with a specific brand.
In financial, you can also retain customers. Compared to other switching costs, finances are monetary losses. They can also be product benefits.
Factors to Consider When Looking for the Right CPD
Have you ever tried searching for a CDP before? How’s the experience? It’s exhausting.
But knowing what to do can avoid any hassle along the way. Also, you can make decisions without regrets.
Some of the selection pointers are discussed below:
Prepare Your Business
It’s normal to feel excited to search for a CDP vendor. But pause and think. It is advisable to prepare your business to adapt a new and modern technology effectively.
Searching for a CDP is quite tempting, and it is imperative to establish an organizational structure. It is also a bright idea to use an effective strategy that would help you throughout the process.
Create a Strategy
After preparing an organizational structure, don’t forget to plan and think of a strategy. Just like increasing the pool of your customers, developing a strategy does not happen overnight. It is a long process that requires a lot of patience, time, and effort.
The trick here is to decide which audience you want to target. Next, determine which channels you will use. After that, identify the needed data points for all your cross-channel campaigns.
Experts say that your strategy will reflect on what kind of team you have. To handle the process like a pro, it’s wise to break down team silos and create roles to promote teamwork.
Direct Your Attention to the Most Suitable CDP Vendor
Instead of working with the best vendor, deal with the most suitable CDP provider.
To narrow down the number of available choices, you can create a list of vendors. Then, measure the quality of their services. A CDP that gives you an edge over the competition will be your best shot.
Use an RFP Template
Aside from obtaining a list of vendors, an RFP template can help scale up the process of finding CPDs that exceed your requirements.
If you haven’t tried an RFP template before, it’s about time to try one today.
Consider the Vendor Comparison Chart from the CDP Institute
You can also consider the vendor comparison chart developed by the CDP Institute. It is relatively detailed, well-explained, and comprehensive.
The Forrester Research and Gartner market research institute are other excellent platforms you can rely on. Unlike the CDP Institute, they are committed to providing overviews of different CDP vendors.