Companies need data on user engagement to understand the behavior of users on the website or app, assess the performance of marketing campaigns and see how to better address users’ needs. Today, teams can benefit from numerous marketing and analytics tools that allow them to collect user acquisition, behavioral and conversion data from multiple sources and set up reporting on it. However, to really gain a competitive advantage, they need to be able to do more with their data.
This blog post will explore the concept of a customer data platform (CDP) and demonstrate how it can benefit modern companies. You will learn how to apply a CDP to your company’s operations to help it achieve its goals.
What is a customer data platform (CDP)
A CDP is a single platform that facilitates customer data collection, management, transformation and activation.
The traditional definition of a CDP states that “a customer data platform is packaged software that creates a persistent, unified customer database that is accessible to other systems.”
Here is how we can unpack it:
- “Packaged software” means that a CDP is a prebuilt system whose setup and management don’t require high technical skills as many other types of tools, such as data warehouses, and is associated with less risk, cost and implementation time.
- A CDP “creates a persistent, unified customer database” containing individual customer and visitor profiles. The platform captures and links information related to each user and stores it, expanding the database over time.
- Data in a CDP is also “accessible to other systems,” meaning you can find further uses for the stored information. For example, you could send the data to sales tools to improve how you manage interactions with current and prospective customers.
Advanced CDPs can also store machine-learning-powered predictions, such as the likelihood to purchase.
Piwik PRO’s CDP represents a unique type of software. The CDP is integrated with a web and app analytics platform, rather than seeking to replace it, which is the case with many other CDPs available on the market.
Key functionalities of a customer data platform
Let’s walk through a few specific aspects of a CDP and how Piwik PRO’s CDP benefits you.
Collecting first-party data
A CDP consists of individual-level data from the organization’s online and offline sources. This data reflects a company’s current and prospective customers and their behaviors. It is also more precise than second- or third-party data collected by another entity.
Operating on first-party data can help you comply with international data protection laws. You are more likely to obtain valid consent to the collection of first-party data by asking users directly.
Data import won’t be available in Piwik PRO CDP Beta. In future versions we plan to enable data imports from your CRM, ecommerce platform, data warehouse and other tools using incoming webhooks and no-code automation platforms. A built-in integration with web and app Analytics and Tag Manager will enable you to benefit from a steady stream of valuable user data.
Read more about the benefits of first-party data: Why first-party data is the most valuable to marketers [Updated]
Data privacy and management
The CDP enables you to address data quality at the point of collection, so you’re able to retain its integrity throughout the data pipeline. You have governance over the data you collect and maintain in a CDP and control the sources of information.
It provides a single source of truth regarding a customer’s data and the data processing purposes users have agreed to. It lets you quickly modify or delete specific user data if requested.
With Piwik PRO CDP, you can:
- Integrate Consent Manager and make actions related to activation dependent on whether users grant consent. You can keep the latest consent information in the visitor profile. Moreover, webhooks can be fired based on the consent category in the profile.
- Handle sensitive data. For example, you can add an extra layer of privacy by replacing identifiable data with custom scoring values.
In the future, we have plans to enable an activation log.
Single customer view
Because the collected information gets unified and attributed to the same user, you are able to access it in single customer views. Customer profiles include all the information you’ve gathered, like demographics, purchase history, behavioral data, etc.
Knowing all touchpoints of the customer journey provides insights into their interests, what they’re likely to buy next, or if they need a personal discount to re-engage after some time of inactivity.
Piwik PRO CDP allows you to explore single customer views.
Find out more about single customer views: Single customer view (SCV): what is it and how does it work?
Identity resolution
A CDP can attribute all disparate data from multiple channels to the same customer profile. User profiles are created by merging the data using matching identifiers, such as e-mail address, user ID or cookie ID.
The ability to use multiple identifiers differs from options in analytics tracking tools – these often rely on cookies that tie the data to a browser, not a user. Connecting cookie-based user data to other tools and systems can lead to downstream data quality issues. For example, you will have no way of differentiating between individuals using the same device within the same cookie. Plus, privacy-focused legal and technological solutions make relying on cookies a short-term solution.
The Piwik PRO CDP works on both:
- Persistent identifiers (like user ID), which is how most CDPs on the market work already.
- Non-persistent identifiers (like session ID) for in-session personalization or activations. If there is no other data on a visitor, the session ID will be dropped and the profile will become unusable after the session ends.
Non-persistent, short-term identifiers enable you to perform the following actions:
- Open a chat window during the session for visitors that have bumped on the pricing page twice within the last 5 minutes.
- Alter the look-and-feel of the site to allow more contextual ad slots on it for those who have opted out of targeted advertising.
- Send warnings to your company Slack in case of rage clicks on your most important contact form.
Audience segmentation
Segmentation allows you to create audiences that group customer profiles matching certain conditions.
Once audience segments are built in your CDP, they can be forwarded to downstream tools in your growth stack for data activation. Centralizing audience segmentation saves time on audience building and ensures the segments are consistent and up-to-date across systems.
Piwik PRO’s CDP lets you build audiences based on attributes, such as data relating to:
- Traffic, e.g. source, medium, keyword, channel, and campaign details
- Device and platform
- Location
- Consent
- Other details, like last order time or total revenue
This information is gathered through analytics events and matched with the user profile with first-party identifiers, such as e-mail or user ID.
Another option is to set up audiences based on user behavior (event dimensions). In this case, behavioral conditions are based on the number of occurrences of events over a period of time. For example, you may segment profiles of users who visited specific product pages a few times in a specified period.
By combining the CDP with Tag Manager, you’re able to fire tags based on audience conditions.
Data activation
Data activation involves putting customer data insights into action in other systems and tools. For example, you can add users from a given audience to an email list and send them a discount code for a product. Or you can show an ad banner on the website with a complementary product based on a customer’s previous purchases.
All of this is possible through integrations offered directly from the CDP, enabling businesses to access the data where and when they need it and relieving engineers of managing third-party code.
Piwik PRO’s CDP lets you activate data by sending selected attributes to thousands of destinations through webhooks and automation tools – CRM, ad platforms, email marketing tools, internal communication channels and more. Example platforms include Hubspot, Slack, Mailchimp, Google Ads, Shopify, Marketo and others.
You can also create activations through templates and an intuitive editor without involving tech teams. If needed, this allows you to define more advanced integrations.
Learn more about data activation: What is data activation and how does it fit into your data analytics stack.
Work in real-time
CDPs let marketers work in real-time, which improves the process of preparing audience segments or targeting users with relevant content.
Customer information is also reflected in real-time in the updated profiles. As a result, the data sets expand, and you can constantly access up-to-date customer details.
Now that we’ve defined what a CDP is and how you can use it, it’s equally important to understand the functionalities of similar types of data management software and learn the nuances that determine the best applications of them.
CDP vs. DMP
A DMP predominantly influences advertising to better target ads and reach audiences. DMPs mostly rely on third-party data and reflect anonymous customer identifiers (like cookies, etc.), making them systems with less accurate data. Due to the rise of GDPR-friendly solutions, DMPs are far from optimal for managing and utilizing user data.
Read about 4 key differences between data management platforms and customer data platforms.
CDP vs. CRM
A CRM reports on current or potential customers, so it will primarily help you with analyzing the sales pipeline and forecasting. CRMs cannot register offline data unless it’s manually entered, so you would mainly use them with online data sources.
8 customer data platform (CDP) use cases
The capabilities of CDPs allow you to achieve several things that can positively influence business growth. Below, we elaborate on eight of them.
1. Improving operational efficiency
A fundamental aspect of any enterprise-grade CDP is its ability to unify data from various data-producing channels and platforms.
A CDP resolves the issue of data silos – situations when an assortment of data is available to one department but isolated from the rest of the organization. Data silos make the working environment less collaborative, slow the pace and productivity of the company, and threaten the accuracy of customer profile data.
Removing data silos improves efficiency and productivity and makes it easier for teams like marketing, sales, support, customer success, product and others to collaborate, exchange user data and complement each other’s efforts.
With a CDP, the organization works on more accurate and complete customer profile data and is able to automate many of its operations. For example, since a CDP creates individualized profiles for your customers and prospects, you won’t have to spend hours manually inputting your audience’s information and verifying its correctness.
2. Developing targeted marketing campaigns
A CDP enables real-time campaign activation, allowing marketers to deliver highly-personalized marketing campaigns across all areas of customer engagement. You can effectively use a CDP with a marketing automation platform, simplifying time-consuming activities like lead qualification and campaign creation.
With a CDP, you can quickly decide what content to target visitors with and what channel will be the most effective. At the same time, you can measure and track the performance of the campaigns and channels to refine and improve the assets or messaging in the next campaign.
For example, you could segment users who often open your marketing emails and have browsed products on your website but abandoned their shopping carts. Then, you can send reminders about viewed products to re-engage your audience.
Similarly, a CDP can tell you what message not to send to a customer. You can combine online data from your digital channels with offline customer data from a POS system. A complete view of the customer could prompt you to pinpoint those who have recently purchased an item in your physical store. Then, you can remove them from your next social media ad campaign for that exact item, letting you focus resources on those who are more likely to buy it.
3. Personalizing the customer experience
More than 77% of people choose, recommend and pay more for brands that provide personalized experiences tailored to their interests. Personalized messaging and interactions are more relevant, timely and effective in moving users toward engagement, conversion and customer loyalty.
From the data collected through your sources and stored in a CDP, you will know how users move around your website, what actions they take and whether they complete the funnels. Personalization can involve content recommendations and offers that are contextually added to the site based on a visitor’s past behavior. It can also consist of displaying messages matching the user’s industry, appealing to them with relevant visuals or colors, referring to the user by their company or personal name or prefilling forms with previously input data.
For example, imagine a potential customer browsing your sports website. They have viewed several pages for products in the same category – tennis equipment. Then, the user left your site without making a purchase. The next time they are on your website, you can set your homepage to display tennis equipment offers rather than a generic assortment of sports items.
4. Optimizing customer journeys
A CDP allows you to track a customer’s entire journey and assemble every interaction a prospect has had with your business. But the role of a CDP is far from over after a user makes their first purchase. It helps you optimize every stage of the customer journey, including retention and advocacy.
Your sales team can view where your leads are in the sales funnel to reach out with the right information at the most suitable time. Similarly, marketers can analyze where users are in their journeys, how they move throughout your site, and where they drop off.
To acquire more customers for your business, you must understand which interactions encouraged them to convert into paying clients. You can see which content is not as effective and requires improvement along with what resonates with users the most and should be replicated. This way, you can focus your resources on the strategies that drive the best results for your company.
5. Enhancing customer support
According to research from Zendesk, 66% of B2B customers will stop buying from a brand after a bad customer service interaction.
A CDP offers valuable insights for anyone who contributes to the customer experience in their everyday work, including customer success teams and customer support representatives. They are at the front of customer interactions daily, and they significantly impact overall business performance and long-term customer loyalty.
Agents that interact with customers have immediate access to their detailed customer profiles. The agent can efficiently and effectively answer customers’ questions, make recommendations, or steer conversations toward new purchases or brand experiences. This can lead to meeting their needs quickly and forming better customer relationships.
When agents understand details such as how users are engaging with the brand or what their customer status is, they can easily tailor the conversation to them. There is no need to dig for information, figure out the most accurate details or put customers on hold for long periods to find relevant data.
For example, agents can now reference what product the customer purchased and the channel it was purchased through and get an idea of what topics on your site interest them. They can also see when and what previous interactions occurred with the company, such as opened tickets and their status, issues or requests discussed in conversations to date. This way, they can refer and respond to them and close the tickets faster.
6. Identifying high-value customers
Having all your customer data housed in one spot will help you identify the customers who bring your company the most value. You can do this by analyzing the users’ purchasing habits and history. It’s no secret that a customer who is either spending a lot with you or purchasing regularly is one of your most valuable customers.
Your best customers are also those who, on top of buying from you, frequently interact with your brand, whether through social media or email or by leaving positive reviews on third-party pages. Nurturing and retaining those segments should be a priority for you.
You can also identify shared characteristics of your best customers, such as demographic details (age, location, occupation or industry they operate in) or behavioral data (most visited pages, common user flows on your site or app, most purchased products or services, etc.).
This information allows you to create specific campaigns and customer journeys to target lookalike audiences. It’s worth nudging the users currently in your database who share these traits and approaching them with relevant content that will encourage them to get your product.
7. Preventing churn
A CDP can be useful in pinpointing customers who might be close to churning.
A declining number of interactions with your brand, like fewer email opens, social media or blog engagements, or a decrease in product adoption, may indicate a weaker bond between your business and a customer.
With a CDP, you can identify such individuals and get a step ahead by improving the messaging or experience. For example, you can help show customers the features of your product, or send a time-limited promo code to apply to their subscription and give them more time to try your product for less.
8. Identifying cross-sell and upsell opportunities
Apart from retaining customers, a CDP allows you to discover cross-sell or upsell opportunities among your existing clients. You can hone in on what the customer may need next with information on products or services purchased in the past, the timing of previous purchases, communication preferences and loyalty status.
A CDP solves major issues that often impede a brand’s ability to convert cross-sell and upsell opportunities. These include data silos, problematic identity resolution and the lack of real-time access to data.
For example, you can use a CDP to look at the current customers who use your email software and have been browsing pages on your other products. They may have recently started consuming more of your content on product use cases and features, and visiting pricing and contact pages. Consider targeting these users with a promo code for your other product or start a dedicated campaign with content on using your products together.
How to choose the right CDP for your business
Before deciding what CDP to use, you need to think carefully about your specific use cases and identify a CDP that most closely addresses your needs.
Ask yourself the following questions:
- How often do you interact with your customers and visitors?
- What platforms do you use to reach and communicate with them?
- What are their needs and behavior patterns?
- What tools currently handle your customer data?
- How are these tools connected to each other?
Examine the scale of your customer outreach, the depth of integration with your existing systems and your budget. Discuss the needs and expectations of the key stakeholders, especially those who regularly interact with customer data. Address their concerns and plan out a smooth transition, guaranteeing the CDP works with your current tools.
We are reinventing the Piwik PRO CDP, equipping it with extensive functionalities that will make it an essential component of any enterprise-level analytics stack.
The module will allow you to:
- Collect and integrate customer data from multiple sources, including web/mobile SDKs (soon also: online forms, CRM systems, e-commerce platforms, and social media).
- Segment customers based on their behavior and demographics.
- Trigger personalized marketing campaigns based on real-time customer activity, such as abandoned cart recovery emails or personalized recommendations.
- Monitor and measure the performance of the CDP.
Read more about our CDP’s features and learn why it could be the right fit for your company.
Free comparison of 7 enterprise-ready customer data platforms
Get a detailed overview of their characteristics and choose the right CDP for your company.
Final points on customer data platforms
We hope you now have some idea of how your organization can apply the features of a CDP to its processes and drive business results.
Your company has a shot at bridging potential information gaps, enhancing data integrity across departments and stitching together channels, touchpoints and devices.
We’ve published a few other blog posts related to Customer Data Platforms that may help you get more familiar with these systems:
- Customer data platforms: The best choice in the post-GDPR landscape
- How Analytics & Customer Data Platform Can Help You Track the Full Customer Journey
- What is Data Activation and How Does it Work?
If you have any remaining questions about the use cases of Piwik PRO’s CDP, reach out to us:
