Deep in rural Wisconsin in 1962, there was a marketing organization that was decades ahead of its time. It operated a data processing center with an IBM 650 computer and a direct-mail program. It even had an early version of customer prediction, showing how often its audience responded to messages.
Their marketing response rate? A whopping 80%.
This organization was the communications department for a small Catholic sect known as the Society of the Divine Savior. Almost six decades later, their style of centering data around human behavior is still exactly what marketers need — and that 80% response rate shows what’s possible when data is used the right way.
In the decades since the time of that data processing center, we’ve seen innovations transform the marketing landscape. And as companies reimagine what digital transformation means for their business, it’s no question that data remains at the center of success. That’s why marketing leaders are all about customer data platforms (CDPs).
Despite the fact that CDPs are ubiquitous in marketing, many people continue to be a bit mystified by them.
Yet despite the fact that CDPs are ubiquitous in marketing, many people continue to be a bit mystified by them. What are they, and are they only unique to marketing? How does a customer data platform work? In this blog, I’ll unpack what you need to know about how CDPs manage customer data and the importance of their impact on marketing — and the enterprise.
What is a customer data platform?
A CDP is software that aggregates data to create a centralized profile of a customer. CDPs usually include a customer database, marketing automation, multichannel campaign management, data analytics, and real-time interaction management. Essentially, CDPs create a marketing database with data of all the interactions with your brand. The thing is, having a platform filled with rich customer data is great — but it needs to be integrated to be actionable.
There are more than 100 CDP vendors out there with varying integration capabilities. For example, Salesforce extended the capabilities of Customer 360 to include a data management and activation platform that builds a unified profile of each customer.
As a result, it delivers hyper-personalized engagement across marketing, commerce, service, and beyond. By combining our CDP enterprise-wide capabilities across a multi-cloud platform, with integrations like MuleSoft, Tableau and the AppExchange, Salesforce’s Customer Data Platform helps companies create a single source of truth to build better relationships with their customers.
Creating personalized experiences across a customer journey has shifted beyond the responsibility of marketing.
But today, CDPs aren’t just top of mind for marketing executives. Creating personalized experiences across a customer journey has shifted beyond the responsibility of marketing, according to a recent IDC white paper1. Companies need to involve other departments in this effort, including customer service and sales. Plus, customer concerns about data privacy and consent require the whole enterprise to safeguard data with a shared understanding.
A core strength of CDPs is the ability to consolidate and segment customer data into a unified customer profile. So for organizations on a course for modern transformation looking to elevate their customer experiences, CDPs are the answer.
How does a customer data platform work?
There are four key ways to use CDPs to their full potential: data unification, human-centric marketing, identity resolution, and real-time engagement across channels.
1. Data unification
The number of data sources used by marketing departments is growing each year, and it’s growing fast. Research shows that marketers expect a significant 40% increase in the number of data sources they use in the next year. For a unified view of customers, these disparate data sources need to be connected, and CDPs can help. For example, Salesforce Customer Data Platform is integrated with MuleSoft, which allows you to connect many different enterprise systems together, while its integration with AppExchange enables you to share customer data with an open ecosystem.
Ultimately, CDPs help organizations create meaningful moments and infuse empathy at every touchpoint.
2. Human-centric marketing
Digital transformation is more than just technology. It’s about people. “Human-centric marketing” essentially means that you’re respecting your audience as individuals with an emphasis on authenticity. CDPs make it easier to personalize the product experience and engage customers based on traits like persona, preferences, affinity, and demographics. Through audience analytics and models, marketers can activate highly personalized marketing campaigns and experiences through email, mobile, social, and web. Ultimately, CDPs help organizations create meaningful moments and infuse empathy at every touchpoint.
3. Identity resolution
To understand audiences as individuals, marketers need sophisticated identity resolution technology. Drawing all the different channels of customer identity together in a way that is privacy compliant (where your audience knows what you’re doing and is OK with it) is as complex as it is essential. That’s why a huge benefit of CDPs include privacy tools that protect data through several methods, while also managing customer consent using embedded capabilities and alliances with identity and consent software providers.
4. Real-time engagement across channels
Engaging customers in real time is enterprise marketers’ top priority, but it’s also their top challenge. Part of this challenge comes from a misunderstanding of what “real time” actually means.
Marketers need to pick what can be done in real time and what can’t. For example, you can’t build an artificial intelligence (AI) model in real time — that takes a long time. However, you can do a lookup, impose a rule, ping a database, or ask questions based on past models.
It takes a data-driven strategy for brands to reinvent customer experiences.
It’s much easier for marketers to create and activate segments using customer engagement or AI-based tools within a CDP. Optimizing your data infrastructure can help determine your audience’s profile and deliver the most appropriate content. Ultimately, helping you win your audience’s loyalty and trust faster.
The changing role of marketing in digital transformation
It takes a data-driven strategy for brands to reinvent customer experiences. CDPs can provide actionable insights to motivate customer action and build value. The result? Reducing costs, shortening time to purchase, and increasing customer loyalty. That’s why improving customer experiences in a digital-first world requires a full (and single) enterprise view of your customer’s touch points, interactions, and behaviors that go beyond marketing.
CDPs are an essential part of taking an enterprise’s customer data ecosystem to the next level — where brands can transform the role of “marketing” to compete in a digital world. The days of working in siloed systems are over and blending powerful data insights across the business are key. Marketers can lead the way, but it’s clear that every customer-facing function is better united within a CDP.
1IDC White Paper, sponsored by Salesforce, Customer Data Platforms: Delivering Real-Time CX and Personalization at Scale for Global Brands, Doc #US48805422, Published February 2022
Customer Data Platforms: Delivering Real-Time CX and Personalization for Global Brands
Read this IDC white paper to learn more about CDPs and how they can deliver customer experiences that win in the digital-first era.