Nowadays customers assume that brands know and understand who they are, what they have purchased, and their preferences across every channel. This is possible only by collecting, sorting, and logically interpreting customer data. However, the amount of data generated is enormous due to the millions of customers who interact with the brand through various channels (app, website, physical stores, marketplaces, etc.).

Companies know how difficult it is to integrate customer data from multiple sources. Only a few companies have successfully achieved customer data integration, while others are battling with technology, strategy, budget, and other success obstacles.

The problem is that customers don't care about or understand your barriers; they just leave when dissatisfied. For businesses, acquiring new customers is difficult, and keeping them happy is even harder. That's why it has become essential for businesses to incorporate customer data touchpoints to improve customer experience.

Companies must keep a keen eye on every critical moment in a consumer journey and communicate effectively to offer a great consumer experience. It urges the need to sync your marketing, analytics, UX/UI, and IT teams to use consumer data and implement proper data analytics tools efficiently. Cultivating and identifying customer preferences will amplify your data and analytics strategy, driving new and better customer experiences.

It is impossible to offer a unified customer experience without unified customer data. The term commonly used today is Customer Data Platform or CDP, which gives a brand 360-view of consumers and helps segment them into detail. It allows brands to pull customer data from multiple sources and touchpoints, aggregate and organize them, and optimize marketing efforts.

This comprehensive guide will help businesses understand a customer data platform and its benefits in the modern market.

What is a customer data platform?

A Customer Data Platform (CDP) is a packaged software that helps create a persistent and unified customer database accessible by other systems and marketing efforts. It builds consumer profiles by integrating data from multiple sources or touchpoints, including your CRM and DMP, web forms, emails, social media activities, website visits, and more.

For instance, if you purchased a smartphone online the research process would look something like this:

Searched on Google for "Best Smartphone to purchase in 2023"

Visited some of the review websites

Clicked on multiple retailer websites

Checked a few videos to learn about the features and technical details of different smartphone

When you are finally satisfied with one product, you look for the best place to purchase it. Then, you compare prices, shipping charges, return policies, etc.

From the moment you start actively searching for a product to the moment you complete the purchase, you interacted with brands multiple times through the website, live chats, emails, etc. You might also check their social media accounts and to get more information about their products and ask questions to the brand.

What makes a difference in these interactions is the level of personalization that brands can offer to users. Companies must effectively collect, store, and use data to accomplish this. A customer data platform is ideal for enabling you to provide a more tailored customer experience, thereby increasing customer attraction and retention.

Why is collecting consumer data important?

Today, customers expect always more from companies. To fulfill their increasing demands, brands need to collect consumer data to boost their customer experience. When you have consumer data, you can understand who your consumers are, what they expect from you, and their preferences. These insights are crucial to delivering personalized services.

To develop a consistent customer experience across channels, and provide appropriate recommendations and tailored communications, brands need a customer data platform to get a unified view of each customer.

To stand out from the competition and be a market leader, brands increasingly deploy CDP in their business processes. The revenue of the customer data platform (CDP) sector reached $2 billion in 2022, up 25% from the $1.6 billion projected a year ago.

CDPs work with,

Identity data: It allows you to identify customers, including their names, demographics, geographical location, contact details, social media profiles, and professional information.

Descriptive data: It includes data beyond the customer's identity information that gives businesses a clear image of their customer. The descriptive data category varies depending on your business and provides career information, lifestyle information, family details, hobbies, and interest.

Digital customer experience data: It's the data collected during the digital customer experience or behavioral data. It allows brands to understand how their customers are engaged with the brand through actions, reactions, or transactions.

Qualitative data: It contains information about your customer profiles, including their motivations, opinions, and attitudes towards your brand.

Benefits of customer data platforms

So far we have highlighted the necessity for a CDP to better acquire and retain digital-native customers. We will now dive deep into the incredible advantages that CDP provides to businesses.

CDP installations in consumer businesses (both B2C and B2B2C) are increasing. In 2017, 10% of these companies used a CDP, but by 2021, 24% used one.

The Global Customer Data Platform Market is anticipated to be worth $20.5 billion by 2027, with a 34% CAGR during the forecast period.

If you are not sure whether your business needs CDP or not, keep reading about the benefits and you will change your mind!

1. Organized customer data management

Brands use customer data management programs to acquire, organize, and use consumer data. CDPs are used to simplify that process by managing customer data systems.

The omnichannel marketing approach is on the trend and looks simple when you have fewer channels to connect with clients. It starts getting complicated with the increase in the number of touchpoints and channels. Consistently collecting customer data across all touchpoints is difficult. A customer data platform unifies data all in one place.

The CDP eliminates data silos and turns a fragmented collection of customer data into useful and actionable information that is dynamically updated in real-time.

It also helps in removing duplicate profiles that harm the data relevancy. CDP creates a 360° customer view by conducting precise data analysis, segmentation, and sound decision-making to offer the best-personalized customer experiences and turn them into brand advocates.

2. A comprehensive view of customers and the use of AI-powered personalization

CDP offers a comprehensive view to brands helping them identify every moment of the customer journey, including all the transactions. It enables you to understand consumers and their behavior. This data is further used by the sales, marketing, and service team to promote brand products to the right people at the right time.

Thanks to the use of customer data platforms, customers can easily be recognized whenever they interact with a brand. The brand collects all relevant information about a consumer through every interaction , not just when a purchase is completed. This means that, with knowledge about potential customers, brands can significantly market their products and increase their conversion rates. All these lead to increased revenue for an organization.

With the aid of CDP and AI tools, brands can see real-time data and make decisions about how to engage customers in a personalized way. This effective marketing tool helps businesses find new customers and opportunities for upselling their goods and services.

Furthermore, AI-powered personalization allows you to predict and identify customers who are unlikely to convert. You don't need to focus on such customers and look out for higher-value customers. They save time and resources and prevent you from sending irrelevant messages to uninterested customers.

3. Increased revenue

CDP offers a personalized customer experience and ensures your clients are happy, valued, and satisfied with the brand. Implementing a smart targeting approach to increase customer satisfaction will improve your business revenue.

With CDP, the brand receives real-time insight into its consumer data from multiple sources, allowing them to create a well-targeted marketing approach and send the right message to potential customers. It increases brand recognition, customer engagement, and conversion rates.

The customer data platform helps you make sound strategies and improve company revenue. But, for a better business outcome, you need something beyond a unified customer view, like:

Identifying, defining, observing, and updating real-time customer journeys

Identify high-value consumers before the acquisition

Creation and management of attributes

Segmenting audience

Measurement of attributes

Smart targeting

From customer acquisition to offering personalized omnichannel experience, and customer retention, CDP is a powerful tool to drive revenue.

4. Finding new audience segments

When you have all the information in one place, it becomes easy to segment your customers and audiences by applying basic and advanced analytics. CDP identifies new audience segments in three steps.

Capturing intent attributes: Data is collected and integrated from multiple sources and then specified by their characteristics like personal information, location, purchase patterns, etc.

CDP Analytics: The system analyzes to respond to different queries while collecting data sources. It helps create a particular audience of individual customers by offering hyper-personalized and one-to-one marketing outreaches.

Execution: Once the customer data platform identifies a customized profile, it performs different workflows like real-time CRM updates, campaign automation, website or mobile app personalization, and more.

5. Building omnichannel customer experiences

To build an exceptional customer experience, you need a thorough understanding of online and offline customer behavior. CDP gives companies a deep understanding of their potential customers by integrating data from offline and online sources and creating a single dashboard.

With the help of the latest technologies like machine learning and AI, customer data platforms can segment audiences depending on specific criteria like demographics, location, behavior, etc. They create relevant campaigns through multiple channels, including email, web, and social media. As your customers' channel preference evolves, the CDP can adapt to these changes and react accordingly.

6. Ensure data protection and security

With GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act), ensuring data protection and maintaining user trust has become essential for global brands. CDPs allow companies to follow existing and emerging data protection and privacy legislation. They centralize data, pull together data sources, and create a comprehensive and up-to-date centralized dataset to keep consumers safe from potential threats.

Customer data platforms can protect your consumer data by restricting the amount of data you're collecting in the first place. It ensures that consumer data is compliant with regulations for restrictions and data usage policies.

CDP (customer data platform) vs. CRM (customer relationship management)

Brands have adopted two types of technologies to collect consumer data required for their marketing commercials and product management team. These include Customer Relationship Management Systems (CRMs) and Customer Data Platforms (CDPs). However, they may sound similar but serve different purposes. 

Let us learn the difference between CRMs and CDPs:

CRM

CRMs are used for execution purposes. They are suitable for creating customer support dashboards or email automation systems. CRM facilitates direct consumer interaction and is designed preliminary for optimizing customer interaction.

CDP

CDPs gather, consolidate, organize and use customer data for the execution of different marketing systems and personalization engines. It can integrate with CRM and other systems to integrate data about customers for further segmentation and modeling.

The below table summarises the distinction between CRM and CDP

CDPs collect data on any visitor, whereas CRMs only collect data for known or potential customers.

CDPs analyze lifetime behavior and consumer journeys, but CRMs examine the sales pipeline and forecasting.

Customer data platforms track both offline and online consumer data, but customer relationship management platforms pick up only offline data unless manually entered.

The CDPs are built to manage different data points from a vast number of sources, whereas CRMs collect data that are individually entered and can get lost if not handled properly.

Layerise as your new customer data platform

Layerise collects customer data and incorporate it into a single system. This data allows for the creation of comprehensive customer profiles, helping brands in enhancing their marketing approach and customer experience.

Layerise provides an in-depth view of all your customers with their geographical demographic and behavioral patterns. This gives businesses a clear understanding of what their customers do and creates strategies to satisfy them. Every company must focus on retaining its existing consumers while building new ones.

Layerise builds automated marketing campaigns depending on your audience. We send out personal and relevant messages to customers, making them feel like they are crafted for them. This helps increase conversion rates. Plus, when your clients are happy with the brand, they come up with positive reviews on different public forums. We collect these reviews from multiple channels and share them publicly to drive more leads. With Layerise, you will never lose track of your customer's feedback.

Layerise helps companies to create content for educational purposes. In addition to helping customers learn how to use your products, this content also acts as a new self-service channel that lessens the workload on your customer service representatives. How do we do that? Customers can scan a QR code product to learn about product functionality, explore different contents, and find guides on how to use the product.

We also send out story-like instructions through video highlights, maintenance reminders, FAQs, and troubleshooting. All of this contributes to enhancing the customer experience while also increasing sales opportunities and lowering customer support expenses. It's a win-win!

We understand how difficult it is to collect comprehensive data about customers and effectively use them to offer an exceptional and personalized customer experience. Therefore, we create the best platform where all your client's data are easily gathered from different sources, analyzed, and used to create a wonderful journey for your customers.

If you want to learn more about how Layerise can help your brand, book a demo now!

Conclusion

Making a business successful without customers is impossible. They are the center of everything we do, from marketing to driving sales and revenue. To satisfy your customers, you need accurate and raw customer data. CDPs make sure that consumer data is gathered from various channels and stored in one place, providing businesses with a clear picture of their customers.