As customers interact with brands across more channels and touchpoints than ever, businesses are searching for ways to harness the full potential of that customer data. Enter the customer data platform (CDP). This innovative tool gives businesses the power to make data-driven decisions. Customer data platforms help brands improve customer experience, retention, conversions, and revenue.
The benefits of a customer data platform are hard to ignore. Businesses that have this technology already enjoy better data than their competitors. From creating a database of unified customer profiles to integrations with martech software and AI, customer data platforms enable businesses to scale their marketing and customer experience. Below are just some of the ways a CDP gives companies a competitive edge.
10 reasons why businesses need a customer data platform (CDP)
1. Less dependency on declining third-party data
The death of third-party data has been anticipated for years in the industry. In 2024, the end is finally here. Google will gradually disable all third-party cookies by the end of 2024. Without access to third-party customer data, businesses and digital advertisers will need to figure out new ways to develop marketing personalization – and fast. Companies can get ahead of the curve (and the competition) by collecting first-party data through a customer data platform.
2. Real-time data collection and implementation
Customer data platforms provide real-time data collection and organization from every channel. This allows brands to create more targeted campaigns based on the most current customer behaviors. Faster data collection, analysis, and implementation also creates agile campaigns that can pivot in response to real-time triggers.
3. 360-customer views through unified customer profiles
With a more comprehensive understanding of customer behavior across an entire journey, businesses can better target marketing efforts and other customer initiatives.
Customer data platforms improve data integrity by collecting first-party data across all channels – and then turning it into unified customer profiles. This 360-customer view encompasses data from previously disparate information. Email addresses, in-store purchases, SMS engagement, and more are all ingested through a CDP. The customer data platform also removes errors commonly found in third-party data, like duplicate profiles. More accurate data yields more accurate analysis and predictive insights – both necessary tools for the success of any marketer or brand.
4. Less data silos within an organization
A customer data platform allows all parts of an organization to access the same high-quality customer data in real-time. This eliminates data silos, streamlines operations, and provides a more unified customer profile across an entire brand. Teams also have endless opportunities to segment and analyze the data to meet their specific, targeted campaigns – all without compromising the original shared data set.
5. Truly personalized customer experience (CX) at scale
Personalization is a major part of profits today, lifting revenues by 5-15% on average, according to McKinsey. Customer data platforms help businesses implement the high level of personalization that generates results.
A CDP ingests data from every channel where a customer has interacted with a brand. This data can then be shared across the organization and further analyzed by marketers, designers, customer professionals, and more. This allows for a brand to personalize the entire customer experience at a nearly granular level. The platform can update CX across multiple channels in response to changes in customer preferences.
6. Omnichannel customer experiences
It’s important that a customer experiences the same high level of personalization and customer experience throughout their entire journey. Today that can mean a brand has to coordinate CX across digital platforms, SMS messaging, in-person sales, offline channels, and more.
Customer data platforms help businesses create that omnichannel experience across every interaction of a customer’s journey. Its ability to showcase customer needs across all channels means a brand can implement a unified CX across those same channels. Brands can create personalized experiences that match a customer’s behavior at every touchpoint – and customers enjoy a continuous, branded experience across every platform.
7. Intuitive design with minimal reliance on IT professionals
Customer data platforms democratize customer data by reducing the reliance on IT professionals, startup costs, and more. A CDP’s intuitive interface allows marketers and other teams to handle the information without waiting for a tech professional. Teams can segment the data, analyze it with tools in their martech stacks, and more – all without depending on the technical know-how of an IT specialist.
8. CDP marketing boosts operational efficiency
Customer data platforms help businesses streamline operations, reduce costs, and improve efficiency without compromising marketing and customer experience. With data-driven CDP marketing, a company’s precious (and sometimes limited) resources go to the right customer at the right time, saving money and improving marketing results. The centralized nature of a customer data platform allows for more agile campaign implementations, updates, and customizations.
9. Increased revenue through sales, retention, and customer lifetime value (CLV)
Acquiring a new customer can cost a business 5-25 times more than retaining a current one. Customer data platforms allow businesses to develop personalized, data-driven customer experiences that drive higher rates of brand loyalty, customer retention, and ultimately… repeat sales.
10. Better compliance with data privacy & protection laws
From collecting first-party data to hosting it in a centralized, internal database, customer data platforms give companies more control over their data. This control means businesses can easily update their data practices brand-wide to meet international, state, and even local privacy laws. Most customer data platform vendors are also certified in accordance with data privacy laws across the United States, Canada, and Europe.
Helping businesses make data-driven decisions that drive results
Today, roughly 50% of businesses currently use any kind of CDP – with more investing every year as they realize the benefits of a customer data platform.
As the world of advertising and digital sales continues to evolve, companies who invest in CDPs and harness the potential of their customer data will enjoy a distinct advantage over those who do not. From CDP marketing to improved customer experience through agile personalization at scale, customer data platforms provide businesses with the data they need to move their companies forward.