Let us look at an electronics shop. You are in the market for a brand new laptop! It will be top of the line with all the necessary applications that will make it the right choice for you. However, you find yourself taking a detour from the website displaying all the different makes and models. As you are shopping online, you may not just be going to click buy on any one of those laptops unless you have done your fair share of research.
This journey will take you to platforms outside of the company’s original webpage, ranging from social media posts, review sites, another electronics e-commerce website, YouTube videos and finally the site to make a purchase. Companies, such as the aforementioned electronic stores, can use this information to improve their customer interaction. The subsequent gathering and eventual combining of this information is the basis of CDP meaning the customer data platform.
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What Is a CDP?
To better understand what a CDP is, you must understand the meaning behind four words that you are bound to come across upon building a successful business: first-party customer data. First-party customer data is pivotal in your extensive adventure in fully understanding the behavioral, transactional, and demographic information in regard to marketing. It is one thing to use this information separately. Together, it is what makes up the foundation of first-party customer data or 1P data.
Consider the actions a customer will make as they traverse across your website as digital bread crumbs. Once given permission to collect said “crumbs,” that data can be used in search retargeting ads or even visual content through means such as social media posts. 1P data is that very information whose existence can overall strengthen or even lessen the use of data variations. Well, CDP takes that process a step further for your company to reach a diverse audience.
CDP is a data management system of pre-packaged software that gathers first-party customer data from places customers might click on. It then further consolidates and compartmentalizes that information into personalized ads catering to the customer and their needs. It is then through data segmentation that allows the software to categorize each customer’s unique preferences for future marketing mixes. By segmenting the information you retrieve, you can properly distribute it through your company and its channels to the people who need to see it.
What Is the Purpose For a CDP in Business?
There is no single function by which a CDP operates. A CDP takes customers’ needs, immediate or prolonged, as the driving force for your company and its improved ad distribution. Customers expect high-quality service if they plan on using your products or services. You want to make sure that your customer’s experience or CX is as smooth sailing as possible. Any deterrence from that experience will lead to negative reviews for something that could have been avoided. A CDP can help make sure there are far less negative experiences for your customers.
Using a CDP is actually a great tool for developing an optimization strategy for your company. Why? As it can cover a myriad of bases that can direct a company towards stronger optimization. Through utilizing CDP, a company must gather and integrate data, organize and place the gathered data in secured storage and prepare for analysis. The process itself is rather stringent, however, once implemented the pros may outweigh the cons.
It Starts With Gathering Data
Within your company, there may be an abundance of information from each of your channels that can still be unified. Now will be the time to do it. If one is not careful, your information can veer off the tracks from what the original goal of your company is. This is the perfect feeding ground for data silos to develop in that one channel’s information is not being properly leveraged from other channels.
Think of CDP as being closely tied to customer satisfaction. The best way to improve customer satisfaction is observing your customer analytical data. This data can be further observed across the channels through attribution modeling. What attribution modeling does by giving credit to the appropriate touchpoints a customer interacts with, a CDP is a business’s answer to integrating data for later use.
Actually, it is an action called data integration that consolidates customer information. Data integration organizes and combines data from multiple sources. With integrating your data, your CDP relieves you of the several sources you originally started with. A CDP makes your marketing efforts all the more easier to bear.
Organize Your Data Then Secure It!
Data after integration may seem all over the place. CDP is effective in that it provides a reservoir of information that a company can use in order to tell where a consumer has landed on through their channels and based on what they click. Although, you may need to properly vet that reservoir. A CDP makes it easier for your business to better understand your customers’ buying behaviors. However, if the data you have acquired is ‘bad data’ then sorting through the data that would be harmful to your business is of great importance to furthering your development of a CDP.
In the confines of CDP, it unites customer touchpoints to be accessible at any time. The company can then effectively streamline the appropriate information needed for an optimized data platform. As your company grows, there is a multitude of information that you can obtain directly from your customers once you obtain permission to retrieve it. CDP is a powerful tool that requires that a customer is aware that their information will be retrieved. As such, there are now regulations regarding the use of data.
Data Regulations
With the General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act, customers have the ability to access their information that a company holds and delete the data. In this regard, in order to build trust between your business and its customers is to make sure your customer is assured their information is protected. This is done not only by making sure their information is not leaked, but also limits the amount of information you can take from them. This is a good thing as being mindful of what information you consume will show customers you value their privacy. Which in turn, brings in new customers while keeping your loyalists.
Storing data in encrypted caches improves the relationship with the customer and allows readily available information to be easily accessed. To be able to make data-driven decisions on the fly without the need of having to go through any outside parties is worth its weight in gold. Through a CDP, you can make well-thought-out decisions based on the unique statistics tied to each individual customer which you can freely access.
Finally, Analyze your Data!
You are now in a position where you can define what it is you are looking to accomplish after securing the data. You have to answer the questions, why are my customers happy, why are they unhappy? If so, what can we do to improve our system? Whatever the question may be, make sure that you tailor it to a specific problem. The answers to your questions are to be reasonable and attainable. Essentially, make sure that it is grounded in reality.
How long should you expect to finally reach your goals? Through your previous specific problems, what would a reasonable span of time be? Many times, companies have made promises to release a product or service, only for it to be shipped with problems that could have been dealt with during analysis. The end result is an unfinished product and a disappointed consumer base. Set appropriate times for release so as to not have any unforeseen delays.
Then to visualize and interpret your results through spreadsheets, pie charts, any data visualization tools to have a stronger grasp on perceived outcomes. Having a visual or physical representation of your company’s trajectory can be the aid you need to properly plan ahead.
This may just be the “final” step, though it is anything but. This is a process that you can’t succeed at unless you have figured out exactly what it is you are looking for. It is a process in and of itself with many milestones towards a well-structured CDP.
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The process for setting up a CDP is no laughing matter. It will take time to implement correctly. No new marketing strategy does not come well oiled out the box. Patience would be the deciding factor if you want your CDP to be as effective as it can be. The experts at SEO Design Chicago have the tools needed to help push your CDP ventures to new heights. Many companies can benefit from using a CDP, meaning the sooner you can establish yours, the more proficient your business can be.
FAQ:
- What is a CDP?
- How does data integration work?
- What regulations on data have been put in place?
- How do you organize data?
- What are the benefits of using a CDP?
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