Customer data, like their email addresses, physical addresses, and phone numbers are essential marketing tools. To keep track of this data, businesses are turning to Customer Data Platforms (CDPs) as an information management solution. CDPs collect, manage and utilize customer data. 
Table of Contents
What is a Customer Data Platform?
Customer Data Platforms are designed to aggregate, organize, and analyze customer data. This data comes from a variety of places – sometimes they customers knowingly give it to you, like when they willingly hand over their emails or phone numbers in the hopes they’ll get promo comes or just updates about your sales. Other times, you can match information about that customer with what they do – like what they buy, put in their carts, what they post on social media and more. These platforms serve as a centralized database for customer information.
What Are the Parts of a CDP?
- Data Collection: CDPs have the technology to collect data from various sources, including social media, customer and potential customer contact information, past purchases and near purchases and more.
- Data Synergy: A CDP makes sure that the customer’s data is correct, and fixes inconsistencies to create a unified customer profile.
- Customer Segmentation: CDPs enable businesses to segment their customer base based on various criteria like location, the last time they made a purchase, following up with customers who have left items in their carts and more. CDPs allow for targeted marketing and personalized communication messages that include using a customer’s name, location and more.
- Real-time Data Updates: Some CDPs operate in real-time, ensuring that businesses have access to the most up-to-date customer information, even when they’re at the register or digital checkout. For example, if a customer enters their birthdate the morning of their birthday, to receive a special birthday gift, certain CDPs can process that information instantly, so when a customer comes in, they get a little reward. Other CDPs need 48 hours to update.
What Should I Look For in A CDP?
The Ability to Holistically See a Single Customer
Top-tier CDPs allow you to zero in on a single customer. Imagine having a close-up personal photo of each customer (indeed, some CDPs allow for photos). This unified picture includes demographic information including:
- Age
- Location
- Marital status
- Income level (in some cases)
The Best CDPs also include purchase history, interactions you’ve had over email or in person, preferences, and more.
Advanced Analytics and Insights
Top CDPs can use predictive analytics, machine learning algorithms, and data visualization tools to predict what a customer might do next. Don’t worry – it’s not like the Truman Show. When we say “do next,” we mean when they might have the money to make a purchase, when they might be running low on a regularly stocked item and if promo codes compel them to make a purchase. 
Integration Capabilities
A good CDP means you don’t need to press a lot of buttons, go to new websites or enter a lot of logins to work with your CRM system, marketing tools, and e-commerce platforms. These tools are designed to make things easier for yourself, not make you waste more time.
Scalability:
The best CDPs are designed to grow alongside the business. The more customers you add, the more tools your CDP should be able to offer.
What are the Pros of a Customer Data Platform? Do I Really Need One?
You really should invest in a CDP if you want to grow your business in an organized way that includes digital marketing strategies.
CDPs offer personalization. That means next level marketing so you can offer customers discounts on birthdays and anniversaries, recommend products and even send customized messages related to their demographics.
For example, it’s very obvious when a company sends out a mass text or mass email newsletter to quite simply – everyone they have contact info for. There’s little ROI on messages like that. Customers can spot mass-produced texts and emails miles away.
CDPs allow for organizations to craft targeted emails and texts, reducing irrelevant communications. When a customer feels like you’re writing to him/her/them, and not to EVERYONE, there’s a better chance you’ll get some sort of interaction with that person.
And let’s not forget security. The best CDPs prioritize security and compliance with data protection regulations and law.
Are There Any Downsides to a Customer Data Platform?
Like everything in life, when there are pros, you’ll find cons. Here are some issues that even top CDP’s wrestle with.
Laws and Regulation
Remaining compliant with laws on data, which vary by country, can be challenging for both the people who own CDPs and the businesses that use them. You must be sure you take the time to update your CDP whenever an upgrade is available.
Integration
Merging a CDP with existing business management systems, like Shopify or WooCommerce, requires careful planning and execution. If you handle the migration on your own, but you don’t fully understand what you’re doing, there’s a chance you’ll lose all of the customer data you’ve already acquired. That’s why so many businesses who don’t have robust IT departments turn to third party vendors, like SEO Design Chicago, to start you up with or switch your CDP.
Money
CDPs are worth it, but they’re not always cheap. There’s an initial cost, and then ongoing costs related to maintenance, updates, and potentially, additional features. Expect to pay a minimum of $5000 per year for a top quality CDP.
Best Customer Data Platforms
CDPs vary in the tools they offer, and their price points. Here are some we recommend.
Start with the free plan. , once you’ve gotten used to it, you can upgrade to the $500/month level. The free plan offers:
- 15+ SDK sources
- 180+ cloud destinations
- Warehouse destinations
Their next plan offers nearly perfect real time updates, more customer accounts and increased IT support.
Segment is widely considered to to be the best CDP out there. There free plan allows you to collect customer data from 1000 people, and send this information to your analytics tools. Their next plan, at $120 per month, offers:
- Includes 10,000 visitors/mo
- 1,000,000 Reverse ETL Records
- Unlimited Sources
- Public API Access
At this level, you can send customized messages to your customers.
A leader in how AI can improve customer relationships, SalesForce also offers tools for data visualizations and communication platforms like Slack. Because they offer so many products, you need to contact them for pricing. They’re website doesn’t have the most user friendly language, so if you’re interested in SalesForce, we can explain how they differ from others in the field in a conversational way.
Adobe Real Time offers hundreds of prebuilt and customizable templates to build profiles around customers and activate certain segments of your audience for certain promotions. You need to contact them for pricing.
Should You Wait?
If you aren’t ready for a CDP, that’s Ok. But keep up to date with trends in CDPs. As technology evolves, prices often drop. And advances in AI may make CDPs more powerful as time goes on. For example, as AI improves, predictive analytics capabilities of CDPs will get better.
Future CDPs will likely have better and easier ways to address laws and ethical issues around data privacy and security. These may include better encryption, authentication protocols, and multichannel authentication for anyone who has access to a CDP. This last step will keep hackers away from customer’s private data.
The process for setting up a CDP isn’t easy and shouldn’t be rushed. It will take time to implement correctly. Patience is key, and with all of your other tasks, you may not have the time and energy to maximize the use of a CDP.
At SEO Design Chicago, we the tools needed to help maximize the information in your CDP.
Whether you are ready now, or want to wait, reach out to us to discuss the pros and cons of CDPs, how we can help you and budget issues.
Contact Us Today!