June 28, 2023
Do you need a Customer Data Platform alongside a robust Marketing Automation Platform?
Customer-centric businesses outperform competitors by a whopping 80%. Retailers who don’t prioritize this unstoppable force may struggle to maintain the loyalty of existing customers, let alone capture the minds and hearts of new ones.
This is widely understood in the MarTech landscape, with platforms continuously improving the tools that enable retailers to deliver on fast-evolving customer expectations. As such, the lines between Customer Data Platforms (CDPs) and related technologies are blurring – especially as Marketing Automation Platforms (MAPs) introduce additional data capabilities to their offering.
While there’s no doubt MAPs are powerful tools for automating and scaling marketing processes, for retailers wanting to provide top-tier personalization and customer experience, this might not be enough. Here are some key questions to consider to determine what’s best for you:
1. Do you trade across multiple channels and or regions?
MAPs have not been purpose built to handle diverse data sources, which can be a huge challenge for brands and retailers operating in multiple markets and channels. However, with a CDP, businesses can seamlessly integrate and consolidate data from all sources and currencies. By integrating data from online stores, mobile apps, physical stores, and social media platforms retailers can know the end-to-end relationship between a customer and their brand, helping to pinpoint the impact of each touchpoint, typical customer journeys and opportunities for cross-selling.
2. Do you want to enhance your data with additional sources?
MAPs lack robust capabilities for data enrichment, whereas CDP is purpose-built for this. With a CDP, retailers can transform raw customer data into structured and valuable information. For instance, retailers can further enrich the customer data they have collected, such as purchase history, by appending demographic information and engagement data to create a more detailed customer profile. This 360-degree view of the customer enables businesses to tailor experiences along the customer's purchase journey and enhance engagement to ultimately improve conversion rates.
3. Do you want customer data to inform your strategic decisions?
While MAPs offer segmentation capabilities, they do not provide insights into your customers to inform strategic decisions. A CDP goes beyond simple segmentation and offers advanced analytics and AI-powered tools to provide deep explorative customer insights. A key marketing tactic for many retailers is to analyze customer purchase history, browsing behavior, and demographic information to identify their best customers. Once identified, they dig deeper into the behavioral patterns, preferences, and motivations of these customers to discover what they have in common and how to cultivate more customers like this.
Beyond marketing strategy, a CDP will also seamlessly integrate with the organization's broader business strategy, aligning these initiatives with long-term goals. For example, an omnichannel retailer can leverage a CDP to identify new market opportunities, optimize product development, refine retail strategies, and drive strategic growth. By combining data from various sources and providing actionable insights, a CDP enables omnichannel retailers to make informed decisions and develop effective strategies. When these data-driven decisions pay off, a CDP is robust enough to accommodate expanding data sources, integrate with new systems, and support further complex data analysis.
4. Do you strive to provide consistent experiences across touchpoints?
MAPs are efficient in automating marketing messaging, but can overlook other customer-facing teams. Comparatively, a CDP enables retailers to integrate and utilize customer insights across all departments of the business, driving a seamless and consistent customer experience. For example, a CDP can provide the optimal recommendations to share with customers when they interact with customer service representatives, visit physical stores, or browse the online store. By breaking down data silos, a CDP fosters a holistic approach to the customer journey and enables consistent experiences across all touchpoints, ensuring that customers receive the same personalized treatment regardless of the channel they choose to interact with.
5. Do you want to foster inter-departmental collaboration?
Beyond creating unified experiences for the customer, CDPs also have a huge impact on internal team collaboration. Where MAPs often limit access to a subset of the marketing team, a CDP democratizes access to customer data for all teams, encouraging collaboration and customer centricity. An excellent use case is for Product & Merchandizing teams to go beyond pure sell-through and sales reports and understand which customers are buying certain products and the combinations of products they buy. Learnings from this data, plus the interactions between customers and sales associates, can optimize inventory management and identify gaps in your offering. By fostering a culture of data-driven decision-making and leveraging the power of customer data across the organization, everyone benefits from the interactions that others create.
Ultimately, MAPs and CDPs are not competing, standalone tools but complementary forces that, when combined, enable a powerhouse of best-practice personalization, seamless experiences and long-term growth.