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What is a CDP and Why Is It on Every Marketer’s Wish List?

Imagine a “hottest martech gift” list for marketers. With more than 7,000 marketing technologies to choose from, which ones would rise to the top? Which martech vendors deliver best on their promise to give marketers that coveted, almost magical, ability to deliver the right message, to the right people, at the right time?

As the martech landscape continues to expand, one category has grown particularly fast. In the first half of this year alone, 19 new vendors entered the customer data platform (CDP) space, including Adobe, Oracle, and Salesforce. In fact, the growing popularity of this category — and growing market confusion over what specific vendors mean by “CDP” — prompted the CDP Institute to create clarity with the RealCDP Certification.

What Is a CDP?

David Raab, founder and head of the CDP Institute, identifies three key components in defining the term CDP:

  • A CDP is packaged software. Different from a custom-built project, a CDP is a prebuilt system configured for each business, which makes it quicker, easier, and cheaper to deploy.
  • A CDP creates a persistent, unified customer database. This means marketers, customer support, sales associates, and others in your organization can leverage the comprehensive view of each customer. A CDP captures data from multiple systems, unifies data related to the same customer, and stores the data to track their behavior over time.
  • A CDP is accessible to other systems. A CDP breaks down data silos by creating unified customer profiles that are available — and actionable — by the other systems within your martech stack. For example, with a CDP, you can target buyers precisely and deepen personalization of your email campaigns by augmenting profiles with in-store activity, social media engagement, and purchase history.

The result of an enterprise CDP is better targeting, personalization, and omni-channel customer experiences, which translates into more sales, increased customer lifetime value (CLV), and the ability to attract new customers, according to the recently released study “The Total Economic ImpactTM of Arm Treasure Data,” in which Forrester Consulting found CDP ROI at 802%.

What Contributes to Increased CDP ROI?

Among the factors Forrester Consulting cites for these better numbers is the increased ability to personalize and target communications to each customer, based on a variety of behavioral and demographic factors. In Arm Treasure Data’s case, this is first made possible by the CDP’s unique ability to flexibly ingest, clean, consolidate, and enrich data from any offline or online source of customer data, thanks to 130+ built-in connectors and a schema-less data structure.

Treasure Data CDP then cleans, deduplicates, and syncs identities across these various systems to help enterprises create 360-degree customer profiles of their audiences, which in turn allows them to create and activate real-time segments on a near one-to-one basis, be it through push notifications, retargeting campaigns, or automated emails on MessageGears.

Insights generated from these activation channels are then fed back into Treasure Data, creating an automated cycle of data ingestion, cleansing, segmentation, prediction, and activation, with profiles becoming more accurate and insightful as more customer data is collected over time.

“Our new customer data platform built on Treasure Data is fundamentally changing how we communicate with our customers,” says Kenji Yoshimoto, chief analyst for direct marketing at Shiseido. Knowing more about each customer’s changing cosmetics needs has helped make customer communications much more targeted and successful.

And Shiseido’s experience has shown that knowing a lot of things about each customer, rather than just one or two, immensely improves the success rate. “Blasting emails to everyone who tried samples or bought a particular product won’t lead to customer delight. Detecting a mood swing in each customer and changing the tone of notifications does.”

Three Reasons Marketers Need a CDP

1. Customers Expect an Omni-channel Experience

Data-driven giants like Amazon, Netflix, and Uber are setting the bar for customer expectations. And anything less than a seamless omni-channel experience feels like friction. For example, what impression does a company convey when customers receive email promotions for a product they have already bought — or worse, a product they already bought and returned? At best, the company seems out of touch. At worst, it loses customers who are annoyed and feel the company should know them better.

On the flip side, with an enterprise CDP, you have a holistic view of each customer and can deliver positive omni-channel experiences that guide customers through their journey. Advanced CDPs automatically analyze new data based on the unique rules you establish within the system. You can analyze and organize data for audience segmentation, personalization, campaign optimization, push and pull notifications, syndication, and more.

2. Real-time Engagement

What’s even better than detailed data about an individual’s history, preferences, and behavior online? Being able to act on that data in real time. Take Japanese retailer PARCO, for example.

If PARCO’s weather sensors detect rain, shoppers with the Pocket PARCO app who are within the mall’s geofencing are notified to come in for a “rainy day” discount. The result? A 35% increase in store visits

The 66-year-old company competes with large online retailers and brick-and-mortar chains by embracing omni-channel retail, and using data gleaned from its loyalty program, mobile apps, geolocation technology, and even weather sensors on the mall’s rooftops. The retailer has found ingenious ways to drive traffic to its malls. For example, if the mall’s weather sensors detect rain, shoppers with the Pocket PARCO app who are within the mall’s geofencing are notified to come in for a “rainy day” discount. The real-time offers — plus other personalized communications — have resulted in a 35% increase in store visits.

3. Cross-Sell and Upsell

By using your CDP to quickly consolidate information from all channels, you’ll know when your customers make a purchase and it’s time to shift to a cross-sell or upsell strategy. Once a customer decides to buy, you can improve retention with personalized, data-driven recommendations, as well as personalized customer experiences. This can extend your relationship far past the first purchase and help develop long-term customer loyalty that drives higher CLV.

Differentiate with a Data-driven Experience

While many companies are getting enviable CDP results, you’ll want to make sure you choose one tailored to your own company’s wish list. To help make sure your top pick is the right one, ask the right questions, like the ones you’ll find in this short, ten-question CDP guide.

Shawn Hong

Shawn is passionate about identifying key strategic partnerships as a business development manager for Arm Treasure Data. He studied at the University of Southern California, graduating with a double major in political science and global business. Connect with Shawn via LinkedIn or email him at shawn@treasure-data.com.

MessageGears announces $12M to eliminate data friction for enterprise marketers

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