How retail data platforms are redesigning the customer experience
Customer Data Platform Software
What is a customer data platform?
Before delving into the specifics of customer data platform, or CDP, one common question that retailers may have is: “What is a customer data platform?” Generally speaking, a customer data platform software is a web-based interface that combines three essential elements: a database, the capacity to connect to multiple channels, and a user-friendly interface for marketers. A CDP software can assist marketers in managing and using customer data more efficiently to help drive their marketing and sales campaigns.
A CDP can create a unified, persistent customer database that can be accessed and shared by different systems within an organization. This means that various teams can be on the same page in terms of what they present to customers, as opposed to each system having its own customer view which might be inaccurate and inconsistent and could result in redundancies.
A unified data means that the data collected from fragmented sources is merged into a single central view, and persistent data means that stored data is infrequently accessed and is not likely to be modified. Having access to a complete, single customer view for each customer will enable you to analyze trends over time and can help you streamline your marketing campaigns.
By buying CDP software from CDP vendors, companies would not need to custom-build their own CDP as they would when creating their own data warehouse.
A customer data platform software built by CDP specialists can provide cost-saving and time efficiency benefits. The right CDP vendor could offer a CDP software with higher functionalities and more sophisticated data collection and unification features.
Because retailers might be dealing with massive amounts of customer data, they may require a solution that can unify all of their customer data into a single platform. By looking at a single customer view, retailers can obtain insights and make smarter inferences about each shopper’s actions at each stage of the buying journey. With this knowledge and understanding of customer behaviors and preferences, a store can determine which items to offer to specific customers, as well as how to keep its existing customers coming back for repeat purchase and attract potential customers.
To adapt to an ever-changing consumer landscape and technological advancements, brick-and-mortar retail chains have been urged to expand their operations not only in terms of increasing the number of their retail outlets, but also in embracing digital transformation. To enhance both their online and offline sales, retailers could benefit from considering important key performance drivers such as generating traffic and conversions, building brand loyalty and recognition, and providing connected customer experiences.
Retailers that would like to improve their customer engagement may consider buying packaged CDP software from reliable customer data platform vendors to help them deliver a personalized customer engagement.
CDP platforms enable retail companies to collect and integrate all available consumer data into one location. By analyzing the unified customer data, retailers can come up with integrated personalization campaigns for high-value clients and provide relevant offers depending on their customers’ preferred channels.
When it comes to real-time customization, a CDP can help retail marketers engage customers through retail apps before customers make their purchase, and provide more personalized product recommendations. When customers encounter product issues, a customer service agent can give tailored customer assistance by looking at customer data from the retailer’s CDP.
A retail-focused CDP such as Lexer can assist organizations in improving their retail operations. CDP can also help companies understand and predict future customer demand. By using CDP, retailers can select the right products and order the right quantities based on market and seasonal demand. Marketers who would like to design personalized campaigns for their target customers could benefit from using AI-based customer data platforms, which can automatically cluster customers based on their online purchasing behavior.
A CDP with analytics and activation functions may add value to a variety of company tasks, making it more than just a marketing tool. As a result, the data collection and integration capabilities of CDP can be useful not only for marketers, but also for customer support teams and business executives. Enterprise users of CDP could perform advanced consumer analysis, launch targeted engagement initiatives, analyze consumer behavior changes, and evaluate the effects of their business activities.
Customer data platform vs CRM
Customer data is important to help you understand your customers’ wants and needs, and how they interact with your brand. Having a solid grasp of customer behaviors and preferences can enable you to make the necessary adjustments in your business strategies in order to better address your customers’ demands. Both customer relationship management (CRM) and customer data platform (CDP) are essential technologies for collecting and managing important customer data.
Before deciding on whether your business would benefit more by relying on top customer data platforms or by using a CRM, it would be helpful to narrow down the distinction between customer data platform vs CRM.
As their names suggest, CRMs assist in managing direct customer relationships, while CDPs focus on managing customer data.
CDP generates a unified and persistent database that can be easily accessed by other systems within an organization. CDP captures a large amount of customer data from both online and offline sources, cleans, de-duplicates and standardizes the data, and organizes data files into a well-structured single customer view that can be shared with other retail systems.
CRM, on the other hand, enables marketers to manage their customer relationships by utilizing every single customer’s complete contact history. This could include details such as a customer’s purchase history, personal information, and frequency of purchase transaction. CRM gathers data from a wide range of engagement channels, including emails, social media, live chats, and more. It also keeps track of sales and stores data files. CRM software could assist companies in retaining and acquiring new customers, as well as ensuring that customers are happy with their experience.
Client data platforms differ from CRM in that CRM organizes and maintains customer-facing interactions, whereas CDP collects data on customer behavior with a specific brand, product or service. Another difference is that CRM is designed for employees who engage directly with customers, whereas CDP might be more useful for non-customer-facing roles such as marketing, engineering, or product development.
Customer data platform companies
The customer data platform market is expanding rapidly as more businesses consider investing in digital expansion to attract customers. It is important to remember, however, that not all CDPs are created equal, and each one has its own set of benefits and weaknesses.
When considering customer data platform companies that can meet your specific requirements, it would be helpful to closely examine the four different types of customer data platforms and functions and how they can fulfill your business needs.
Data ingestion is the process of combining customer data from various retail data systems and channels, and CDP automates the way data is collected from a variety of sources. A CDP that focuses on data ingestion can easily integrate with common data sources and ingest data in batches, with the goal of swiftly and easily bringing the data into the system.
Unification, also known as identity resolution, means combining all relevant data into the customer’s record, eliminating duplicates, and allowing marketers and other relevant teams to have a 360-degree single view of customer information across different channels and touchpoints. CDPs that focus on unification utilize machine learning to identify and integrate duplicate records with high accuracy, as well as highlight inconsistent data sets for checking and verification.
CDPs focusing on intelligence and analytics can enable businesses to easily segment their customers. CDPs with good customer intelligence tools can provide personalized recommendations to help teams decide on what specific actions to take for individual customers, and assist companies in achieving customer acquisition, retention and engagement. CDP vendors such as Lexer with strong suits in retail data analytics and customer intelligence capabilities could help enterprises acquire valuable insights into their customers.
Regarding cross-channel activation, CDPs with strong activation capabilities can connect to all engagement channels and assist companies in building and automating customer journeys and marketing campaigns. A good CDP can manage omnichannel marketing and measure omnichannel key performance indicators, such as customer lifetime value, to help businesses in designing and optimizing their marketing campaigns.
Customer data platform examples
Companies may refer to various customer data platform examples to better understand the benefits of CDP. Retailers, for example, might use a CDP platform to combine data from online and in-store sales, as well as data from other sources such as site visits, email traffic, ad interaction, and many others to create unified, persistent consumer profiles. Retailers could also use a CDP to better engage and prioritize their high-value customers and how to manage with their low-value customers.
Customer data platform architecture
Companies that are considering designing their own customer data platform architecture may refer to customer data platform tutorial videos to learn about the importance and functions of CDP and its key features.
Building a customer data platform can allow businesses to design highly customized systems, establish important business connections, and ensure that their CDP is consistent with their existing architecture. Another benefit of building a CDP is that organizations can have complete control over altering and updating the platform’s features.
Developing a consumer data platform, on the other hand, takes time, and unforeseen circumstances such as budget constraints and employee turnover might prolong the process. A CDP developed in-house could also entail a lot of work, such as cross-departmental collaboration as well as coordination with external partners.