What are Customer Data Platforms | Birds Eye Blue Blog

March 14, 2023

WHAT ARE CUSTOMER DATA PLATFORMS

Customer Data Platforms enable businesses to collect and manage customer data from various sources and channels, consolidate it into a single, unified profile, housed in a secure and privacy-compliant environment, and activate it across multiple touchpoints.

The goal of Customer Data Platforms (CDP) is to provide businesses with a holistic view of their customers, facilitating delivery of personalized experiences to their customers, which in turn helps to improve customer engagement and retention. Customer Data Platforms (CDP) help businesses can gain insights into customer behavior, preferences, interests, and needs, which can also help them to optimize their lead generation, user subscription, and customer acquisition efforts.

In this article, we'll explore what Customer Data Platforms are, what are some sources of their data, how they work, their benefits, and some use cases.

What are Customer Data Platforms?

A Customer Data Platform (CDP) collects data from various sources such as customer interactions, purchase history, web activity, and social media, email marketing, among others. The data is then consolidated, unified, cleaned, and stored in a single, unified customer profile. This profile can be used to create customer persona(s) and contains a complete view of the customer, including their demographics, behaviors, preferences, interests, purchases, and other relevant information.

CDPs are designed to help businesses create a unified and comprehensive view of their customers, providing them with valuable insights into customer interests, behavior, and preferences. This, in turn, enables businesses to deliver personalized and relevant experiences to their customers across multiple channels, improving customer engagement and loyalty.

How Does a Customer Data Platform Work?

A Customer Data Platform is designed to collect and store customer data from various sources, including online and offline channels, such as websites, social media, mobile apps, and in-store interactions.

There are a Key Features that are typically included in all Customer Data Platforms. These include:

DATA COLLECTION:

CDPs are designed to collect data from a variety of sources, including website analytics, social media platforms, email campaigns, mobile apps, and more.

Customer Data Platforms can be also designed to collect data from various offline sources such as purchase receipts, customer interactions and surveys in stores, feedback from customers, and so much more. Any available customer touchpoint that is available to a business can be used to provide data into Customer Data Platforms, in order to benefit and create a win-win for both customers and businesses. This data is typically collected in real-time, and can be used to create a complete picture of each customer's interactions with a business.

DATA SOURCES FOR CUSTOMER DATA PLATFORMS

A Customer Data Platform can collect data from a wide range of sources, including the sources given below.

First-Party Data: First-party data refers to data that a business collects directly from its customers, such as customer profiles, transaction history, and customer feedback. This data is typically collected through the business’s own websites, mobile apps, and other owned media channels.

Second-Party Data: Second-party data refers to data that is collected by another business or organization, but is shared with the business using a CDP. For example, a business might partner with another business to collect customer data through joint marketing campaigns.

Third-Party Data: Third-party data refers to data that is collected by third-party data providers, such as data brokers, publishers, and social media platforms, and is shared with the business using a CDP. This data can include demographic data, behavioral data, and other types of data that can be used to enrich the customer profile.

It is critical to note here that being in compliance with all Regulatory, Security and Privacy Policies and Rules, Customer PII Data i.e. Personally Identifiable Information (PII) Data is never shared.

DATA INTEGRATION:

Once data is collected from multiple sources, it must be integrated into a single, unified view of the customer. This typically involves some level of data cleaning, normalization, and deduplication in order to ensure that the data is accurate and consistent.

Identity Resolution and Addressability Solutions can also be deployed in this process in order to ensure integrity and accuracy of the data.

DATA CLEANSING AND ENRICHMENT:

Customer Data Platforms use machine learning algorithms to cleanse and enrich customer data by removing duplicates, correcting errors, and filling in missing information. This ensures that the data is accurate and complete, enabling businesses to make more informed decisions.

DATA SEGMENTATION AND PERSONALIZATION:

Once data is integrated, it can be segmented into various categories based on customer behavior, preferences, demographics, interests, purchases, and other factors. This segmentation can be used to create more personalized outreach via brand advertising and marketing campaigns and improve customer engagement.

DATA ANALYSIS - ANALYTICS AND REPORTING:

Customer Data Platforms typically include tools for Data Analysis, including Data Visualization, Modeling and Reporting, and Predictive Analytics. These tools can be used to gain insights into customer behavior, identify patterns and trends, and create more effective marketing campaigns.

DATA ACTIVATION:

The Data Activation process in Customer Data Platforms is a key component of realizing potential benefits of CDPs. It is the process of using the insights gained from the data analysis, data modeling and analytics to deliver personalized experiences to customers across various channels, such as email, social media, websites, and mobile apps. This involves creating targeted and focused marketing campaigns, product recommendations, and many other personalized experiences based on the customer’s individual needs, interests and preferences.

Some common Data Activation techniques used by CDPs include:

Audience Segmentation:

Audience segmentation involves dividing the customer base into groups based on common attributes, such as demographics, psychographics, and behavioral data. Businesses can then target specific groups of customers with personalized messaging and offers.

Cross-Channel Campaigns:

Cross-channel campaigns involve delivering consistent messaging and offers across multiple channels, such as email, social media, and websites. This helps to increase brand recognition, brand awareness, and customer engagement.

Predictive Analytics:

Predictive analytics involves using machine learning algorithms to predict future customer behavior based on historical data. This allows businesses to anticipate customer needs and preferences, and deliver personalized experiences. In this way, businesses can add so much more value to their visitors and customers.

Real-Time Personalization:

Real-time personalization involves delivering personalized experiences to customers in real-time based on their current behavior and context. For example, a customer who is browsing a particular product category on a website might be shown personalized product recommendations based on their browsing history and other customer data.

Benefits of Customer Data Platforms

There are many benefits to businesses using a Customer Data Platform (CDP) and customers as well. Some of the most significant benefits are given below.

IMPROVED CUSTOMER ENGAGEMENT:

By creating a unified view of the customer, businesses can gain a better understanding of customer behavior and preferences, which can be used to create more personalized and effective marketing campaigns. This can lead to higher levels of customer engagement and increased customer loyalty.

INCREASED REVENUE:

By using data to create more targeted marketing campaigns, businesses can increase the effectiveness of their marketing efforts, which can lead to higher levels of sales and revenue.

IMPROVED CUSTOMER EXPERIENCE:

By using customer data to create a more personalized experience for customers, businesses can improve the overall customer experience, which can lead to higher levels of customer satisfaction and loyalty.

BETTER DATA GOVERNANCE:

By using a single platform to manage customer data, businesses can ensure that data is accurate, consistent, and up-to-date, which can improve data governance and reduce the risk of data breaches.

Use Cases for Customer Data Platforms

Customer Data Platforms can be used in a multitude of different ways, depending on the needs of the business. Some of the most common Use Cases are give below.

CUSTOMER SEGMENTATION AND ADVERTISING:

By segmenting customers based on behavior, preferences, demographics, and other factors, businesses can create more targeted marketing campaigns that are more likely to resonate with customers.

PERSONALIZATION:

By using customer data to create personalized experiences for customers, businesses can improve the overall customer experience and increase customer loyalty.

CUSTOMER RETENTION

A CDP can help businesses to identify the most valuable customers based on their lifetime value, purchase history, and other factors. By using this data, businesses can create targeted and specific marketing campaigns and incentives that are designed to attract and retain these high-value customers.

USE CASES FOR BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM

See below.

BIRDS EYE BLUE - BIG DATA CUSTOMER DATA PLATFORM offers unique capabilities and advantages of a Customer Data Platform combined with our proprietary Big Data Platform.

Accordingly, while the below are specific Use Cases and Benefits of BIRDS EYE BLUE - BIG DATA CDP, they can also be found in Customer Data Platforms in general that offer such capability.

NEW BRAND MESSAGING AND BRAND AWARENESS:

Customer Data Platforms can be a valuable resource for identifying matching customer interests to communicate your brand messaging. This works well in various scenarios for Brand Management including brand recognition, brand awareness, as well as outreach for a new product or brand.