When Should You Start Caring About Having a CDP?

A Customer Data Platform (CDP) is a packaged software that creates a persistent and unified customer database that is accessible to other systems.

Customer Data Platforms usually contain a customer database, marketing automation, management tools for multi-channel campaigns, and real-time customer interactions to provide insights necessary to form personalized connections with customers.

To better understand the concept of a CDP and its relevance in the modern digital marketing space, let’s break down the aforementioned definition into smaller parts.

1. Packaged software

A CDP is a prebuilt system that is configured to meet the needs of each client. Certain technical resources are often required to set up and maintain a CDP.

However, one need not possess the level of technical expertise that is usually associated with a typical data warehouse project.

Comparatively, a CDP is a much easier tool to manage. Its ease of use leads to a significant reduction in time, costs, and risks associated while giving business owners more control over the system.

2. Creates a persistent, unified customer database

A CDP develops a holistic and comprehensive view of each customer by capturing data from multiple systems, and linking information associated with the same customer.

And storing that information to track their behavior over time. The CDP contains personal identifiers that target marketing messages and also track results.

3. Accessible to other systems

Data stored in the CDP can be used by other systems for meaningful analysis and managing customer interactions.

Why Sitecore CDP is the Need of the Hour?

Features of CDP

• Marketers can manage the day-to-day running of the CDP with minimalistic support from IT departments or tech teams.
• A CDP is capable of collecting data from multiple sources such as servers, CRM, and emails and unifying such data to create individual profiles.
• A CDP contains a web-based UI for marketers to classify, cluster, and segment various customer groups.
• A CDP is accessible to external systems where data can be shared through emails, apps, social media, web, and mobile.

Data Management in CDP

According to Gartner, data collection is “the ability to ingest first-party as well as individual-level customer data from multiple sources, both online and offline, in real-time and without limits on storage. Data is necessary and relevant as long as it is needed for processing. This includes first-party identifiers, behaviors, and attributes.

Typical Types of Data collected by the CDP

• Vital information including the preferred channels, active days, personal contact information, and insights on spending
• Types of sessions on channels
• Propensity toward ancillary services
• Data showcasing loyalty trends
• Service history

Backbone of CDP

Profile unification: One of the most important functions of the CDP is its ability to consolidate profiles and connect specific attributes to specific customer identities. This includes identifying individuals, cleaning data, and linking multiple devices to that single individual.

Segmentation: Once data is collected, it is assigned to a segment within the CDP. Each segment contains a subset of users that share common attributes, behaviors, or transactions. Marketers can use segments in the following ways:

Personalization: For example, a marketer within the retail industry could run a social media campaign aimed at members aged 35 and under who have purchased within the past year thereby enabling them to carve out a personalized experience for this specific target market.

• Decisioning: Filter out segments so you’re only showing truly relevant campaigns to the target audiences at the right time.
• Activation: The final step is the activation process which involves sending segments (with instructions on how to activate them) to engagement tools to trigger email campaigns, mobile messaging, and social media campaigns.

Potentiality of CDP

The CDP capability: This is responsible for owning customer profiles (both anonymous and customer profiles), as well as identity resolution. It uses that blend of data (engagement, behavior, customer history, transactions), to segment and build audiences.

The Smart capability: This manages digital decision-making. It collects data on individuals who are interacting with a product or site to identify the next best course of action, experience, or offer to push toward this person or segment depending on their scenario.

Often, you’ll see experimentation and optimization built into Smart CDPs to enable marketing teams, e-commerce teams, and digital teams to experiment with conversion rate optimization or a new feature rollout.

You’ll also see predictive insights—AI that’s built into the platform, as well as activating AI that sits outside of the Smart Hub CDP.

The Hub capability: It drives personalization, engagement, and orchestration—deciding how to use the data and intelligence ingested by the platform to surprise and delight customers at the right time with meaningful offers and experiences via the website, mobile app, social media, or email.

Marketing and CDP

The pandemic led a majority of companies to begin investing heavily in their digital marketing strategies to adapt and survive in the competitive digital market.

In a recent webinar with Boxever (recently acquired by Sitecore), Scott Brinker, editor of chiefmartec.com, discussed the transformative effects of the pandemic and its impact on the traditional rules of marketing.

He mentioned that to scale their digital businesses, companies would now need to focus their attention on centralizing and automating while still humanizing their actions during this adaptive transition.

While this may seem complex, it is exactly where a CDP comes into the picture. CDPs are designed to sift through data, mold it into personalized campaigns, and offer customers experiences that truly resonate with them.

With digital marketing and personalization processes accelerating at an unprecedented pace, it is now the ideal time to embrace the benefits of integrating a CDP.

Why Sitecore CDP?

• The obvious and possibly most important, of course, is to put the customer first and deliver consistent digital customer experiences that stand out and drive conversions.
• Another is about third-party cookies. Because they're being replaced by the first-party variety, having Sitecore CDP is effectively future-proofing your business. Why? Because Sitecore CDP supports first-party cookies.
• Since it can use first-party cookies, it can develop a consistent customer profile to create a concentric and holistic view of a customer.
• The data can also be shared with other tools in your business to create customer-first experiences. This promotes better relationships and a deeper understanding of your customers.
• As Sitecore CDP captures data using APIs and a feature called 'Audience sync', Sitecore Personalise uses its models (experimentation and decisioning) to trigger customer-focused involvement.
• It intelligently targets audience segments for personalization across whichever channels your business uses. Whether a website, mobile app, emails, or even inbound and outbound call centers, Sitecore Personalise has it covered.
• The whole personalization process is underpinned by the data held in CDP and the powerful toolset in Personalise. This allows for a seamless presentation of personalized content.

Wrapping Up

Managing the large amounts of complicated data is often very challenging and because of this, marketers today need efficient data management solutions. This is where CDPs become fundamental to modern digital marketing.

With CDPs providing the ability to extract relevant insights from large and diverse sets of customer data, personalized digital experiences have now become the norm for almost all businesses with a digital presence.

If you too are curious about how CDPs can enhance your consumer experience and thereby transform your business dynamics for higher returns, reach out to us.

Our Sitecore experts are sure to guide you with how Sitecore’s very own CDP can integrate seamlessly within your system and serve all your business requirements.