If the world of digital marketing was an ocean, and pro-level brand marketers were treasure hunters – customer data platforms would be iron-bound treasure chests filled with diamonds and other valuable objects. We say this because CDPs are full of precious data about the customers that those brands want to reach. This data is crucial to business operations and markets today. It helps create data monetization strategies as well. But CDPs have many nuances that one must consider. Let’s dive into these.
What Are Customer Data Platforms?
Customer data platforms are tools used to collect data on different kinds of customers. CDPs act as a single platform that provides a unified customer record from all the touchpoints associated with a business. The software gathers valuable information from multiple sources (first, second, and third) to create a well-rounded consumer profile and their needs. According to the CDP Institute, it’s “software that creates a persistent, unified customer database that is accessible to other parties.”
This data is frequently separated into different categories, including identification, description, denoting behavioral patterns, and opinions. Together, this information helps marketers craft personas – separate profiles of different kinds of ideal customers for their products or brand. People are then matched to these personas, and suitable advertisements and other marketing material are targeted to them.
Data for Identification
Basic information such as the consumer’s name, gender, age, address, and contact information is collected. There’s other information, such as the consumer’s professional titles, social media and bank accounts, and more. This data covers each platform to identify these essential details.
Data for Description
This information puts a spotlight on the social aspects of the consumer. That includes both their professional and personal lives. Is your consumer the Vice President of a top company? Or is she the attendant at a beauty salon? Perhaps he’s a stay-at-home dad. Do they have children? How about pets? Do they own a vehicle, or a home, or both? What about interests in fashion and sports? This set of data contains all this information.
Data Describing Behavioural Patterns
Consumer behavior reveals a lot about a consumer. It tells you how often they’ve made purchases, how they respond to certain emails, and their online activities, and more. Interestingly, you can even tell what kind of interactions they’re having on social media. The higher the engagement, the higher the chance of a consumer purchasing your product.
Data Denoting Opinions
This information is related to the consumer’s personal preferences, such as their likes and interests. Would they want a purple ceramic pot? Chances are, they’d ask their friend where they could get one from. Perhaps you own a shelter for rescued animals, and your friends share a post about it. Their friends would then know where they could get a furry companion for themselves. All the information in these scenarios comes into qualitative data. This is highly personalized information.
What Are Its Benefits?
Let’s You Truly Understand Your Consumer
All the information above allows you to understand your customer better. From their basic information, what they do for a living, their likes and dislikes, how they view themselves, how they shop, what they need, and more. It can even go further to illustrate their goals and aspirations. It gives you a clearer idea of who your customers are. All this data is crucial if you’re trying to discover the people who need your products in their lives.
Gives You Accuracy
Rather than making a whole batch of ads and sending them out to people at random, data-driven efforts help you accurately direct your ad efforts. You’ll be able to create different sets of buyer personas, group people into these types, and make ads specifically tailored for each group. That makes a lot more sense and gives you more accuracy. That’s more cost-effective in the long run and will help you analyze the results faster as well.
Helps Segment Your Audience
As discussed, this data helps you segment your audiences according to their basic information, jobs, lifestyles, social media behavior, and more. That enables you to understand your customers more intimately. You’ll also be able to create marketing material that reaches out to them specifically. That gives you better ROI, and it also opens up a way to get better feedback from different types of customers.
Allows You to Leverage AI and ML
Collecting data isn’t always easy. A lot of it is tough to attain. CDPs use artificial intelligence and machine learning to process the influx of vast amounts of data efficiently. ML and AI merge to increase the complexity of consumer data and simplify it significantly. Then they create innovative datasets and evaluate them. Based on this, marketers can make recommendations and craft strategies. This feature will grow in importance over the years, as the number of customers and the ratio of consumer data will keep multiplying.
Boosts Your Marketing Strategy
This helps boost your marketing strategy manifold. You’ll collect relevant data that are useful, accurate, and recent. This information will power every aspect of your marketing strategy. From crafting ads and creating audiences – you’ll be able to make your marketing strategy as sharp as a knife. You’ll also be able to collect and analyze data on the success of different marketing campaigns, so you’ll know what to continue and what to leave out.
Provides First-Hand Data about Your Customers
First-hand information is usually the most accurate. It’s also reflective of the current mindset of the person whose you’re collecting data. This is helpful if your brand has a seasonal use or creating a time-bound event, and you need to know who your customers are ASAP. It’s useful in general since you can use this data for many marketing strategies to boost your sales in the long run.
Gives You the Option to Be Privacy-First
Recently, there was a hue and cry over third-party cookies. That’s because many felt they breached the customer’s privacy. That way, first-party data is lauded for its privacy-centric nature. It allows customers to be mindful of the information they’re giving out to marketers.
Forecasts Future Behaviour
All this information can be used to forecast future customer behavior. Patterns tend to repeat themselves, and it’s not a longshot to assume that a brand could rely on slightly older data to assess the patterns of their customers in the current times.Honestly, there’s a lot more brand owners can learn about customer data, but this is its gist. If you want to learn more, do reach out to us.