Tag Archives: customer relationships

Get More Customers With A Retarget Customer Data Platform

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A customer data platform needs the right fuel to achieve growth—data from sales systems, customer loyalty data, insights from programmatic advertising, and advanced analytics all help. Ultimately, the way to lift conversion rates requires significant first-party data. 

Why First Party Data Should Be The Core Of Your Marketing Strategy

If you ask most marketing teams, they’ll say they are drowning in data from analytics tools. The burden gets even more significant when you factor in customer insights from third-party data. That’s why your customer data platforms need to emphasize direct interactions with customers (i.e., first-party data).

To make the most out of your marketing activities and get better retargeting results, you need the proper foundation in place first. With the right marketing technology, it is far easier to focus your advertising campaigns to achieve better click-through rates and increase conversion rates.

Gathering Your First-Party Data For Retargeting

Fulfilling your business strategy is easier when you can make Facebook ads, email marketing, and overall digital marketing deliver more results. Effectively gathering first-party data into a centralized database makes it easier to provide personalized experiences.

To build accurate customer profiles, look at the data you already have, like purchase history, insights from your legacy systems, and other data points available in your marketing automation platform. These data points are vital to building a company’s first-party data foundation. However, there is much more high-quality customer data you can gather.

4 Marketing Opportunities To Gather And Use First Party Data 

Online events and community experiences give you an unusual way to transform anonymous visitors into potential customers. To achieve this feat, your tech stack needs to be equipped with marketing automation tools like Arena Personas and live chat. Once your email systems and preferred marketing solution are ready, it’s time to engage your target audiences. 

1) Offer Online Experiences To Potential Customers

Using marketing campaigns to gather today from various customer segments is easier when there is a value exchange. Every single customer should get something out of interacting with your company like a community experience, pricing (e.g. discounts), early access to products or useful insights.

For example, you can use Arena live chat to deepen your customer relationships by running engaging online events. As you add more engaging experiences, customer acquisition cost may go up for a period of time. In the long term, providing customers live event experiences can raise customer retention.

Instead of attempting to understand the desires of anonymous segments, tracking user engagement in different types of online activity (e.g. chat and website use) leads to more actionable insights. Let’s break down how gathering first-party data with an online experience can help.

E-Commerce Business Use Case

For example, B2C customers may react with excitement in a chat session during a livestream event. To see how this information could be used, consider e-commerce brands. They may be considering launching 10 products over the next quarter but  can use this insight to improve the results of product launches. By observing the chat and related behavior patterns like website clicks, you can estimate demand for products (e.g. “Hey, we noticed over a hundred people wanted the new blue shirt!”). 

With this insight in mind, there are at least two ways you can get more business. First, you can run a targeted campaign to your current customers and reference your chat experience (e.g. “We saw that many of you are excited about our new linen blue shirts! Order by Friday and you’ll get 10% off!”). Second, you can then make changes on your advertising platform to emphasize the new shirt. 

2) Create Campaigns For Your Current Customers 

Marketing campaigns often focus on bringing in net new customers and prospects. In addition to that objective, it’s important to engage your current customers. In many respects, it’s easier to  execute data-driven personalization is to focus on customers. Unlike anonymous website visitors, customers have signaled what they value with their buying behavior including offline purchases. Let’s illustrate this use case for enterprise-level companies in the software industry. 

B2B Enterprise Use Case

Selling complex business software often feels like a Herculean task. Achieving business success often requires a full team of sales professionals like account executives, sales development representatives and others. Further, the marketing team is constantly working hard to collect customer stories, optimizing online advertising campaigns and more.

In this context, it’s vital to make the most of your customer base. For example, you might have a significant percentage of customers on a mid tier plan while your goal is to emphasize the top tier enterprise plan. In that case, you might offer online experiences showcasing the success of users in the top tier plan and encourage them to share their success stories. For instance, enterprises users might rave about the analytics capabilities and native integrations available in your top tier plan. Running a live event where customers have the opportunity to share their experiences with each other is powerful!

There are some downsides to this type of campaign. It requires significant insight into customer behavior. It’s vital to know your customer satisfaction levels so that you shine a spotlight on your most delighted customers. This type of campaign also requires significant collaboration between sales and marketing. Fortunately, solutions like Arena Personas make such marketing efforts easier to arrange. 

3) Get Better Lookalike Audiences

In Facebook advertising, it has been a common practice to create a lookalike audience by uploading your customer list. Facebook then uses its customer match capabilities to find more people who are similar to your current customers. This approach to Facebook advertising isn’t your only option. What if your target audience isn’t on Facebook or Facebook campaigns aren’t producing satisfactory results? The first party data you gather can help you to market more effectively.

The downside to relying entirely on an advertising platform for lookalike audiences is that you are dependent on their database. If some or many of your customers are not active users on Facebook, retargeting via the Facebook pixel may not work well.

The alternative is to build your own lookalike audiences. With a large enough audience, you may be able to pursue granular segmentation in a custom audience as shown in the following example.

Individual Audience Factors

Every purchase is ultimately made by an individual, whether they are buying as a consumer or at a company. Therefore, it is usually wise to start with these factors.

  • Age: understanding the typical age profile of your ideal audience helps you to decide which channels, creative and offers to use.
  • Gender: it is helpful to know if gender differences are relevant to your market.
  • Geography: contrast the geography of your website visitors to your ideal customer profile.
  • Interests: find out the topics, publications and media your audience likes. If you offer online event experiences like virtual conferences, look at registration records to see 

B2B Audience Factors

If you are focused on appealing to B2B audiences, the following customer attributes are important. 

  • Industry: to minimize confusion, use a standard industry classification like the North American Industry Classification System (NAICS).
  • Company Size: use number of employees or revenue as a filter. 
  • Technology Stack: If you offer technology products or services, knowing the customer’s tech stack is helpful. For example, does it matter if the customer uses Salesforce?

Is Your Audience Segment Too Large?

Audience segmentation can become less useful when the audience becomes too large. IF you end up with an audience segment with millions of individual customers, it may need to be narrowed down. Leverage feedback from the sales team and customer service to narrow the list. They may be able to help you identify the customer attributes associated with the most valuable customers (e.g. people who tend to move through the customer journey quickly).

4) Lapsed Customer Engagement

When a customer cancels their account or stops buying for a long period of time, all hope is not lost. In many cases, you have a good chance to reengaging lapsed customers with a retargeting campaign. To build this type of audience segment, it’s important to choose who to include and who to exclude.

Start by defining a lapsed customer. For simplicity, let’s define a lapsed customer as a prior customer whose last purchase was six to twelve months ago. Once you have that list, it’s vital to filter it further using your customer relationship management data. Specifically, you want to exclude customers who complained or experienced significant problems. Reengaging such former customers is much more challenging and may require more guidance from the sales team.

Now that you have your audience segment prepared, prepare a custom advertising campaign. B2C companies often find that a simple “we’ve missed you!” style message with an incentive (e.g. 10% off coupon) is an effective way to bring back customers. For B2B campaigns, communicating new features or capabilities can help. Even better, reengage lapsed customers by inviting them to an online event.

The Final Ingredient To Successful Retargeting: Leverage Market Awareness

Once you choose one of the ideas from above to execute, there is one more critical point to consider: market awareness. The three part market funnel – top of funnel, middle of the funnel and bottom of funnel – gives us a good framework. Let’s pair the market funnel concept with the audience segmentation we covered earlier.

1) Top of Funnel

In the top of the marketing funnel, most prospects have little to no understanding of your product and how it might help them. This is the marketing equivalent of cold calling. The advantage of top funnel marketing is that you have the greatest opportunity because this segment is always the biggest. The disadvantage is that you usually need to be more patient.

With a top of funnel focus, leveraging the “Offer Online Experiences To Potential Customers” strategy makes sense. In this case, your primary marketing campaign would focus on inviting prospects to an online event. After the event, you would follow up with retargeting campaigns to offer an event recording or other assets to give people a reason to opt in to your marketing.

If you use events, use our how to promote your virtual event guide to get more attendees.

2) Middle of Funnel

Also known as the evaluation stage, the middle of the funnel is an intermediate step in the customer journey. In this stage, the potential customer has some awareness of what you offer. It’s now up to you to nurture the prospect further. In contrast to top of funnel, you likely already have some prospect or customer data in place so you can start off with a retargeting campaign.

Consider adapting the “Create Campaigns For Your Current Customers” concept to middle of the funnel campaigns. Highlighting your current customers via an event, case study or interview is a powerful way to prove your credibility. Using your customer data platform, identify prospects who have interacted with your brand in the past 3 months (e.g. attended a webinar, participated in a live chat etc). Once you have identified this audience segment, create a marketing campaign to emphasize your case studies.

3) Bottom of Funnel

Converting leads at the bottom of the marketing funnel depends on your business model. If customers make an online purchase, a campaign offering a deadline and incentive is often a good bet. For B2B or enterprise sales, running marketing campaigns may not be your best best. Instead, it may be more effective to collaborate with the sales team to find out what type of campaigns they want. For example, highly customized and targeted direct mail campaigns may be the best way forward.

Use Arena Personas To Get More of The Right Data

Data driven personalization campaigns and advanced audience segmentation all depend on having high quality data. To help companies get more of the data they need to grow, use Arena Personas. It’s the fastest way to collect and import first-party data into your customer data platform. Then you’ll find it far easier to run retargeting campaigns across the marketing funnel.

The secret to real data collection: why is a CDP key to your business

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Using a CDP is extremely important these days, but just as important is the need to understand why you need it. It’s more than collecting real data, it’s about how you chose to use, such as to improve your business.

Knowing who a brand’s audience is the most significant purpose of a company. It’s the only way to recognize the best way to communicate, find your public, offer them your product or service, and so on. Because of that, from the early years of the internet ascension, customer data collection has been discussed.

Many software and platforms were developed to gather data to help companies better target their audience. However, data collection can be a delicate subject regarding privacy matters.

Indeed, a General Data Protection Regulation (GDPR) aims to give the public more control of what happens to their online data.

While it was extremely common for companies to gather data and sell to third parties, this is now a bit more complicated — especially when it comes to data originated from cookies. Although collecting customer data is still common and required in the market, brands need to be more careful about how they do it and what kind of data they have in their hands.

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A business needs to have accurate data to provide a better customer experience. This means that working with purchased cookies won’t be the perfect solution since they’re mainly anonymous data. For that reason, solutions like the CDP are becoming more notorious. They’re a way to work with real data, hence accurate information, and find the most suitable marketing and sales strategies.

To better understand the search for real data and how a CDP will help achieve that, here, you will learn more about:

  • what happened to cookies
  • what is the importance of CDP
  • why use real-time data collection
  • how does CDP influence a company’s strategies
  • how does this affect relationships between customers and brands

What happened to cookies?

It has recently come to our knowledge that browsers like Firefox and Google are suspending their support to the usage of cookies. These are the text files that store a user’s activity online. They can be used to save some navigation information and make the process easier. For example, automatically filling a website when you’re reaccessing it, or collecting login information for a page.

However, the primary use is to save data about a user’s browsing history, such as pages visited and browsing time. As we all know, having this type of information is essential for excellent performance in digital marketing strategies.

Because of that, browsers used to support cookies and allow companies to access a user’s information for as long as the cookie was saved on the computer. This means that personal and browsing information would be shared with each company’s website for the same amount of time.

When talking about this subject, we can think of both first-party cookies and third-party cookies. First-party is the information that a company gathers directly from the audience, while third-party is data united from various sources. Other companies mostly buy third-party data.

Though when a company purchases data from another one, information is anonymous. You can’t really know who that person is, and data might not be so reliable. Other brands can also end up with the same information you have since the data provider can sell the same data “package” to anyone.

Because of privacy matters and the GDPR (General Data Protection Regulation), cookies’ popularity has been going down. People started using ad blockers so they wouldn’t be bothered with ads after clicking a product.

Even more, when Google decided to suspend third-party data sharing through its browser, the cookies’ future became quite unappealing. Now, brands that want to work with customer data need to find new ways to gather data — and work primarily with first-party data.

Hence, the CDP comes to the rescue. A Customer Data Platform is a software developed for marketing teams to create more useful content and campaigns. 

What is the importance of CDP?

Since it is essentially a marketing tool, the main reason to use a CDP is to know the consumer better. Analyzing and understanding customer data and behavior is crucial to create accurate content. In general, the Customer Data Platform gathers information from a wide variety of sources putting the pieces together to create the ideal consumer profile.

The entire process of data collection and organization is automatized. So the software does all work to give professional marketing information ready to use. However, several teams can have access to this data. All sectors in a company might need some context from the consumers before dealing with their tasks, especially sales and customer support. Still, the products and engineer teams can easily use the CDP information too.

Having data centralized into a single platform is a peculiarity of the CDP. That’s because there were other tools before it that worked with data collection, like the CRM, but none of them were as complete as the CDP.

Further to this, in the era of data-driven marketing, the process of decision making inside a company must be made based on real, accurate information. Since purchased cookies were anonymous, data could be compromised. On the other hand, with a Customer Data Platform, real data is at easy reach.

Accordingly, the service generates better results through the personalization of communication. Businesses that are continually looking for ways to improve ROI can find their needs fulfilled with the CDP. Being a data-driven company and working with real data makes you one step ahead of competitors.

 

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Why use real-time data collection?

It’s not only about data collection, but mostly about real-time data collection. What’s the difference, you ask? Well, working with anything in real-time is an advantage. In this case, it means that the data collection software, such as a CDP solution, will start gathering information from a person’s first visit to your page.

For the company, it is a strategy for improving the promptness of a response and communication system. Therefore, improving every customer-related service in the company. It’s no secret brands use CDP to have better customer relationships, audience engagement, and audience targeting.

Moreover, it is possible to classify visitors into customers and qualified leads as soon as they access your website. Equally, having a database with real-time data makes it easier to take actions that are on the spot, allowing you to see where the current strategy is failing and what needs to be improved.

Overall, working with a CDP makes the company look active and worry about treating customers the way they deserve.

How does CDP data influence a company’s strategies?

Whatever product or service you provide, there’s no doubt you have competition. Because of that, brands need to offer the best solution and customer service at every moment. Nowadays, it’s hard to catch someone’s attention, but extremely easy to lose it.

So, even though a company should work to create a good reputation in the market, no matter what, aiming to be ahead of the competitor is necessary. After all, having a customer turn into a brand advocate is not easy, but highly relevant to a company’s strategy.

Consequently, it’s required to offer the best customer experience out there. For that, you must know who your consumer is, ergo, the use of CDP.

A Customer Data Platform can gather data from multiple sources, from social media and in-apps to sales engagement and product use. This is what makes the software such a unique solution, since the more information you have, the more accurate the ideal customer profile will be. From then, not only marketing strategies will be perfected, but also sales and customer support.

As professional marketing, you know it’s no proper working with guesses in any business. Thus, making decisions founded on real data will lead to several benefits — including the increase in audience engagement.

How does this affect relationships between customers and brands?

When we talk about acquiring a CDP solution, the main reason is to connect with the customer. Thus, it’s logical that it’ll have an impact on the relationship between customer and brand. Since it’s possible to understand and know the consumer thoroughly, it thereby becomes possible to make them more satisfied by providing truly personalized service.

When customers are more satisfied, they are more likely to recommend your mark to other people. With the right after purchase strategy and content, they may even become brand advocates. And why is this so important? For a company, it means a better return on investment and lowers costs with customer acquisition.

After all, it’s less expensive to retain clients than to acquire new ones. That’s why many companies started working with a customer-centric strategy as well. If there are no customers, a business can’t survive in the market. 

Arena is a CDP platform that will revolutionize your company. With our real-time data collection system, all marketing and sales strategies will be refined and boosted.

To better understand how that’ll happen, download our ebook Customer Data Platform 2020: the future of marketing and sales. It has everything you need to know about acquiring and using a CDP to make your brand a reference.

How Customer Data Platform is reinventing customer relations

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Using a Customer Data Platform is helping companies to focus obsessively on their customers and benefit from their engagement.

You need to know your customers—this isn’t any news. It doesn’t matter if you want to make them more engaged, optimize your budget for campaigns, or improve your ROI.

Customer accurate information is at the heart of every company and should be treated correctly to generate powerful outcomes from your marketing efforts.

If you don’t have a consistent understanding of your consumers, then all your strategies will likely go down the drain.

But how exactly do you get to act like you know your customers? The answer is simple: by managing their data.

To treat data thoroughly and reach your customer relationship goals, you might come across the need to use the right technologies. This is when the Customer Data Platform (CDP) walks in.

A customer data platform monitors and tracks multiple data sources to bring relevant information to a single hub that is easy to access and understand.

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Once implemented, CDPs collect, integrate, manage, and analyze customer data continuously. These automated processes help many teams to focus on solving complex problems that require a human brain. At the same time, a Customer Data Platform brings current, real-time data to be leveraged and turned into marketing master plans.

Why do companies use Customer Data Platforms?

Is there a reason why companies implement a Customer Data Platform in their business models? Yes, many.

According to Gartner, plenty of marketers look to customer data-driven strategies to deliver growth. For example, marketers invested two-thirds of their budget in supporting relationships with their customers in 2017 and 2018. 

Still, they have found the technology they were using to be frustrating—until CDP’s unique upshots came out as a solution to their problems.

A Customer Data Platform reaches out for several channels and concentrates real-time data in a single place your team can access whenever it is convenient.

This stimulates a collaborative work environment and speeds the pace of operational routines. Customer Data Platforms are also known for making marketers’ lives less complicated since automating workflows would take too many working hours to be accomplished.

The other reason companies use Customer Data Platforms is that they are much more than a simple database. According to the CDP Institute, the ideal Customer Data Platform should contain five essential capabilities:

  • Absorb data from any source
  • Give full details of ingested data
  • Store data without end and frequently
  • Create unified profiles (such as personas)
  • Share data with any system that needs it

All of the five skills above drive brands into having a vigorous understanding of their customer base by collecting and analyzing reliable data across their marketing channels.

What types of data does a Customer Data Platform assess?

The types of customer data assessed by a CDP can be quantitative and qualitative. 

In other words, by using a CDP, you will be able to figure out:

  • How to identify your customers, using personal data
  • How to interact with your customers, using interactional data
  • How customers expect to be impacted by experiences, using behavioral data
  • How your customers perceive your brand, using attitudinal data

The datasets above are being generated at all times in any digital environment and should be combined to create an unbeatable and absolute customer understanding.

But how do CDPs gather such different information?

They reach out to analytics reports, engagement measures, support occurrences, eCommerce metrics, and customer feedback (to quote a few), to maximize your knowledge and equip you with fast, accurate moves.

This is the main reason why CDPs are revolutionizing the way brands communicate with customers and vice-versa. They are an unlimited and underlying base for companies to create remarkable customer experiences and increase customer engagement in a way we have never seen before.

The effects of CDP in customer experience

A Customer Data Platform grants companies an invincible competitive advantage: passionate customers who keep being fed with reasons to remain brand loyal.

Historically, we can see customers have adopted technologies faster than the brands they interact with. This made companies try to embrace digital transformation technologies focused on customer experience to reach out to consumers where they are and how they want.

Expanding your brand’s online presence to talk to customers in multiple channels isn’t enough, in any case. Any company can create an Instagram account and interact with its audience then and there, right?

However, the ones that truly stand out are focused on delivering personalized, relevant, well-designed interactions that take place as soon as customers want.

Tailored customer interactions should happen anywhere, at any time. This is the main reason why organizations around the world are digitizing their business models. According to the Boston Consulting Group Research, personalization will drive an $800 billion revenue shift to the top 15% of companies that work best on it, in only three industries.

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I know what you’re thinking: that’s much profit for a small number of companies—and yes, it is. Even so, it sounds like a warning: companies that aren’t ready to turn personalization ordinary in their marketing campaigns, will be left stranded.

As you know, doing a great job on personalization is all about knowing everything there is to know about your customers and quickly activating your knowledge when needed.

Can you notice any coincidences between this goal and the usage of a CDP?

How CDPs are reinventing customer relations

Suppose you’re leading digital initiatives to deepen the relationship between your customers and your brand. In that case, you should pay attention to the changes CDPs are leading in customer management and how it differs from other popular marketing tools.

A Customer Data Platform is way more complete than a Customer Relationship Management (CRM) software.

CRM will tell you how to personalize and improve existing customer relationships. Meanwhile, a CDP will do that and indicate how you can promote products and services and what you should do to attract new customers.

With the new untapped potential CDPs unleash, companies are increasingly confident in meeting market changes and customers’ preferences. Hesitating in our competitive world is no longer an option, and data-driven marketing plays a vital role in feeding companies with unequivocal customer interactions.

Ahead, we have numbered a few ways Customer Data Platforms reinvent customer relations to inspire you and your team.

1. CDP enables segmentation opportunities

While it simultaneously optimizes strategies, a CDP provides companies with a 360-degree view of customers to act on an essential customer experience requirement: segmentation.

Segmenting customers by specific traits, behaviors, attitudes, and others is a fantastic opportunity to create tailored marketing touchpoints throughout their journey and attract them with meaningful content.

When based on data, segmentation is an unmatched growth engine that encourages customer loyalty and enhances profitability.

2. A CDP gives your interactions a personal touch

Similarly, you can not spell personalization without customer data.

Owning a Customer Data Platform will help you quickly access reliable information to customize customer interactions, making your consumers feel special, and long-term relationships feasible.

Many companies are using CDP for Customer Data Management. See below how their tactics connect with top-level personalization:

3. A CDP enriches customer relationships

There isn’t enough emphasis on how knowing your customers is essential for customer relations.

People expect to be treated accordingly to their visions as much as they wish to connect emotionally with brands. A single miscommunication can harm brand-customer relationships irreparably.

As soon as you have a panoramic view of your customers’ habits, preferences, needs, and issues, you should feel more confident in building specific touchpoints that elevate the customer journey and make customers want to hang around you for longer.

Owning a Customer Data Platform will also measure your customer loyalty programs’ effectiveness and help you find what groups of customers deserve attention according to their life cycle.

4. A CDP is agile

Agile methodologies are the perfect response to a world that is changing every day, every hour. CDPs consider our ever-changing environment and let your team access specific data whenever it needs, contributing to an agility mindset.

Agility layers can be used to shape CDP frameworks that adjust to your company’s infrastructure, turning data sharing into a reality. CDPs also absorb data from other internal systems, like CRMs and Data Management Platforms (DMPs), you might already have.

Apart from that, CDPs update in real-time. This allows you to assess micro-moments data and instantly operationalize it.

5. A CDP ingests data from any source

Your customers are everywhere these days, right? You can find them on social media, navigate your website, read your emails, download your app, and take a look at your physical store. The interaction possibilities between your customer and your brand are countless.

If truth be told, it truly doesn’t matter where your customers are and what they’re doing. Whether they’re reading your blog or using your chatbot, data is being generated at all times, collected from simple interactions to complex operations.

A Customer Data Platform reaches out to any source of information, from Live Chats to SEO, from blogging to Twitter, from customer loyalty to affiliate marketing programs to provide your company with everything you know about your potential and current consumers.

6. A CDP elevates digital transformation

Simply, a digital transformation process should rely on—and a lot!—on a Customer Data Platform.

By watching digital-native organizations, it becomes clear that many technologies can be embedded to digitize businesses.

However, it is worthless to implement technologies that don’t accurately connect with customers’ needs. Digital transformation starts and ends with the customer, transcending traditional marketing, sales, and customer service roles.

That being said, without a reliable Customer Data Platform, companies who are digitizing their operations will mostly fail to unleash the real potential of a digital transformation.

Digital-native companies have already built their business model based on data collection and responding to customers’ needs with high-level experiences.

These companies combine traditional marketing strategies, such as loyalty programs, with groundbreaking digital initiatives that connect with customers in real-time and engross their engagement.

Remember: It is crucial to direct your digital transformation efforts into interactions that engage your audience, and a Customer Data Platform is intimately related to that.

It taps into your databases to unify relevant information and operationalize customer knowledge, delivering targeted experiences that will delight and retain your customers.

It should also be stated that CDPs assist companies in taking a step back and revisiting their processes to leverage technology cleverly.

For example, Netflix was quick to turn its service into a scalable streaming platform that replies to customers’ demands. The now-sector-leading company could only reinvent itself because it took a very attentive look at customer data and responded accordingly.

Align your digital initiatives with the power of a Customer Data Platform

While IT staff has been skeptical for a while, digital leaders worldwide have been engrossing CDP in their workflows and getting amazing results from data management automation.

Not only has perfect treating data been helping these leaders come up with customer-centric solutions, but it has optimized their budget and turned manual work more effective.

Forbes Insights highlighted that 44% of surveyed organizations stated a Customer Data Platform is helping drive customer loyalty and increase ROI.

Arena serves customers from 120 different countries and sees firsthand how the fast-paced digital environment influences global market changes day after day.

That is why we work to build awareness for digital leaders and marketers to embrace Customer Data Platforms in their full potential and boost customer engagement.

In case you need to further your research towards the CDP role for the upcoming years, download our Customer Data Platform 2020: the future of marketing and sales ebook and take a deeper dive.

Understanding the Difference Between Customer Data Platform (CDP) and Customer Relationship Management

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Customer Data Platforms are still new in the market and they can be mistaken by other solutions that came before them. Here’s the difference between CDP and CRM.

The difference between CDP and CRM needs to be explained. Even though they both gather customer data, they work in distinct ways. While the CDP is a much more complete software, the CRM can still perform very well in many strategies.

Customer Relationship Management (CRM) and the Customer Data Platform (CDP) are both customer data-collection-related software. However, there are many differences between these two systems — from the type of data gathered to why they are used. For example, CRM was developed to assist sales representatives while CDP is much more focused on marketing teams.

Because CRM can be integrated into the CDP, that’s even one more reason they can be mistaken for one another. Nonetheless, the difference between CDP and CRM is there and it needs to be understood. Mainly for the reason of knowing what is the best solution for your company.

So, if you already know what your pain points are, you only need to understand what is a CDP, what is a CRM, and the difference between CDP and CRM — which is everything we’ll explain ahead.

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What is a Customer Data Platform (CDP)?

A Customer Data Platform, commonly known as CDP, it’s a software that gathers, processes, and stores data. It’s a system that was created with the goal of helping marketing teams to be more successful in their strategies. Through a database created by the CDP, marketing professionals can have access to all information about a company’s clients and prospects.

These data can include characteristics such as:

  • name and age;
  • contact;
  • demographic;
  • time online;
  • pages visited;
  • products of interest;
  • which social media they use;
  • how many interactions they made with the company;
  • purchase history.

This is just a general overview of what a CDP can do since there is still a lot more information it can collect. Even more, it’s a thorough platform as it unifies data from several sources, both online and offline. This way, if someone follows the company’s Instagram and then buys a product in a physical store, the software has the ability to recognize it’s the same person, organizing all data about him or her and avoiding data duplication.

Basically, the CDP consumes data from any available source to create its database. Some examples we can name consist of the company’s website, online store, social media, payment systems, and app.

Moreover, a CDP system will always be up-to-date since it works with real-time data collection. This means information begins to be processed and stored from the first contact with the brand. Even if the person doesn’t share personal information on the first visit, their online behavior is being analyzed.

That way, when they do decide to share personal and/or contact data, the system will be updated and unify all that information into a singular customer profile.

Something that’s worth mentioning too is that the data available on a CDP software has no lifetime limit like cookies do. A system like DMP, for instance, has up to 90 days of data storage because it only works with purchased cookies — you’ll understand more about this later on.

Also, a CDP will create unified customer profiles for clients with similar preferences and habits. These can be analyzed and used to create segmentation groups for highly personalized customer journeys. Of course, individual profiles can be used for the same reason.

Working with real and reliable data makes a huge difference in marketing strategy success. Still, other teams inside the company can also benefit from using a Customer Data Platform. For example, sales and product teams can have access to all the data without the need to have reunions and updates from the marketing sector.

Just like that, the whole company is able to work with efficiency to give the customer the best UX possible.

Customer Relationship Management (CRM): Definition and Advantages

Customer Relationship Management is a system developed to assist mainly sales teams. Yet, nowadays, it’s used by other sectors in a firm, like Human Resources and the supply chain.

Overall, what CRM does is gather customer data through online transactions. So, what makes it different from the CDP? Well, that is the fact it only analyzes personal data from known customers. That means it’s possible to check information like name, age, and contact, but not the number of visits made to the website or which pages were visited by each client.

The main role of Customer Relationship Management software includes:

Even more, it’s a platform that’s used in the B2B (business to business) field, where data allows us to analyze the sales pipeline and see where there are more chances to close a deal.

It’s a guaranteed way to understand more about the consumer and the context where they are before contacting them — which will help increase conversion rates. After all, when you know who you are talking to, customer service is more accurate and the client will have a more pleasant experience.

In spite of the difference between CDP and CRM, both systems perform their job in a way that is noticeable. Customer Relationship Management helps increase profitability and simplify sales processes. Likewise, since CRM is a source to feed the CDP as well, it makes marketing processes easier — this technology allows to make accurate decisions based on real data.

What is a Data Management Platform (DMP)?

It’s important to mention the Data Management Platform (DMP) because it is also a system commonly mistaken for CDP and CRM. In fact, there are similarities, but they are all different software and perform different functions.

In this case, DMP is a program that works with data collection and organization, but there is a big difference from the others: its database is formed by anonymous cookies.

These cookies are purchased data from external providers. That’s why they are anonymous — brands can’t collect and sell personal data. Because the customer decided to share their personal information with a brand, that doesn’t mean the brand can share it with any other company.

Even if they’re anonymous, these data are still a valuable resource to create target audiences and make promotions at large scale. Therefore, marketing teams are the ones who mainly use this platform. Besides, it provides professionals of the area enough support so they can create new segmentation groups to use in ads and overall campaigns. This way, boosts brand awareness and grows the company’s audience.

Also, one last detail to keep in mind about a DMP system: all data gathered can be processed and added to the Customer Data Platform.

What’s the Difference Between a Database and a CRM?

Based on everything that’s been said so far, it’s noticeable some differences between CDP and CRM. Then again, it’s important to show clearly what they are and clarify them a little better.

Application

First of all, Customer Relationship Management seeks to personalize and improve customer relationships. While CDP also has that at its core, it also focuses on how to ameliorate products and services. Thus, bringing a better overall customer experience.

Another factor to take into account is that CRM mainly analyzes sales pipelines looking to transform leads into customers. Though a Customer Data Platform does that as well, its priority is more about getting to know the consumer. Only then, the system do a public segmentation and help in creating personalized campaigns and publicity.

How Data is Collected

While CRM only gathers data of active consumers, CDP includes unknown prospect data too — so that when they decide to share their personal information with the company, the system will recognize who they are and put together all the information. Even more, a difference between CDP and CRM is the amount and type of data that can be collected by each platform.

At the rate Customer Relationship Management stores personal data, such as names, age, address, etc., the CDP knows a lot more — like the time each consumer spent on each page they accessed. Additionally, everything that is related to the brand is a source to increase the CDP’s database, from the company’s website to the payment systems used by the firm.

Customer Journey Tracking

If a client clicks an ad but decides to purchase in another moment, through another source, CRM doesn’t have the capability to connect that it was the same person who took those actions. However, that tracking becomes possible with the CDP.

As previously mentioned, Customer Relationship Management doesn’t gather offline data. So, if a customer interacts with the brand online, but buys on-site, the system can’t connect the dots. CDP, however, has the knowledge to understand and put together that information, following the entire journey someone makes to conclude a purchase.

Data Duplication

For the same reason CRM doesn’t track customer journeys, it ends up with data duplication. Since the system doesn’t have the intelligence to understand the person who clicked an ad and bought on-site as the same one, data ends up being repeated as if it were two separate persons. The same way, this happens if the customer interacts with an email and then on the website, among other cases.

Nonetheless, the CDP configuration enables data processing to avoid duplication. So, even if a customer identifies as Mary Jane Brown in one source and MJ Brown in another, that data will go into a singular customer profile.

IT Support

Even though CDP is a much more complex system than the CRM, it’s this second software that needs more IT support. From configuration to management, the Customer Relationship Management system needs the tech team through the entire process. Meanwhile, the CDP will probably need some support at the first configuration, but, after that, anyone with authorization can easily access the database.

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CDP Benefits for Marketing Professionals

Many benefits can be implied along with the explanation about what is CDP. For instance, how easy it becomes to know your consumer and create the finest content possible. As a matter of fact, that is the main goal of acquiring a CDP solution.

As a part of the advantages, we can name:

  • understanding who is the customer;
  • knowing the pain points of the consumer;
  • getting a complete database;
  • increasing conversion rates;
  • improving ROI;
  • automation of data analysis;
  • lower operational costs.

Currently, the purpose of a company lies much more in understanding who is their consumer than on working on products. Getting the ideal customer is even more important since that will reduce the need to constantly work on the product. Still, developing and perfecting a product or service occupies a high position on the priority list.

When we talk about pains and gains in marketing, the idea is that all clients have different pains that the company will have a solution for. This way, a CDP gives all the necessary data for marketing professionals to find out what is impacting the audience and in what way their product can be used to put an end to the problem.

From the information about the consumer, the team will be able to create exclusive content and advertising that are extremely directed to increase the chances of landing a conversion. To clarify, data about what a person likes and dislikes, where he or she lives, who they live with, where they seek information, what kind of content they pay attention to, amongst many other possibilities. The more you are able to discover, the better the result will be.

Overall, marketing by itself is already a way to increase conversion rates and return on investment. Still, a Customer Data Platform will intensify that factor by giving the most accurate and real data as you can get.

In addition, it won’t be necessary to have a specific professional or group to analyze data into what’s useful or not. By using a CDP solution, that will already be covered — therefore, reducing operational costs and making the process automatized and faster.

How to Strategically Use CDP and CRM

Even when we consider the difference between CDP and CRM, a company can still take advantage of the benefits of both software. Everything that’s processed and stored in the CRM and in the CDP has an important role in two moments.

First, to help small businesses grow. Then, to help companies that already have an established audience and are looking for a large-scale solution to work on digital marketing strategies.

Through marketing strategies, it becomes possible to recognize an issue and present a solution. And with a CRM and CDP database, marketing professionals can identify exactly who the target audience is.

With all the data available, from purchase history to offline habits, the company controls target audience segmentation, creates an automation flow for emails and ads, and analyzes performance metrics. Thus, directing content with precision.

After analyzing the difference between CDP and CRM, have you decided on acquiring a solution like this to your company? Arena will give you the best product to work with data collection, customer experience, and audience engagement.

Plus, our team is always available to answer all of your questions. So, stop delaying the success of your business and talk to one of our consultants right away!

Data-driven marketing: learn how to work it with your customers

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Data-driven marketing belongs to a new customer service approach that unleashes companies’ potential to make better, scalable marketing decisions and benefit from higher marketing ROI. It represents the future of customer experience and meaningful branding messages.

You already know what people say: Knowledge is power. Facts, information, and skills acquired through experiences are gold mines for every company that wishes to stand out and stay relevant in their customers’ minds.

Customer data platforms tells marketers everything they need to know about their target audiences. Through digitalization and its multi-channels, it became possible to trace people’s actions across the digital and physical worlds to optimize the process of offering customized products and services that match individual needs.

However, these days, data must be smooth to access and easy to visualize. This happens because customers want quick responses, which timing and effectiveness are highly affected by delays and assumptions.

In this unforgiving environment, are you confident that your marketing decisions are based on facts? When important events on your field take place, how quickly can you respond to them? How many customized experiences do you actually deliver to your customers?

If the answers to those questions concern you, you’re at the right place, at the right time. Get ready to know how data-driven marketing can take you closer to the answers you wish you could give.

In this article, you’ll find out:

  • What is data-driven marketing;
  • Data-driven marketing benefits;
  • Impacts on customer experience;
  • How to work data-driven in consumer segmentation;
  • And examples of data-driven culture.

With that in mind, let’s move forward.

What is data-driven marketing?

Data-driven marketing is a strategy that uses customers’ reliable information to personalize whole marketing communications and experiences. From buying journeys to targeted media and in-store service, data-driven marketing accesses massive information to leverage decisions and make the right judgment about what customers need. This helps marketers to refine strategies based on facts, not guesswork.

But where does data-driven marketing get all the information from?

When you use your phone’s mobile apps or desktop devices to web navigate, you’re leaving traces all around the internet. The applications you use are designed to send data to companies so they know what websites you access, with who you’re interacting with, the locations you have been to, and more relevant information that clarifies your individual preferences and lifestyle.

Many organizations are already worried about data, but we must call attention to the fact that data-driven marketing goes beyond data itself.

The many devices, platforms, and other types of media you use are surely whispering into marketers’ ears over and over to help them build fact-based decisions that match your expectations. Even so, data-driven strategies merge a high-powered amount of digital and offline channels to give context, collect information, and arrange it in ways that are easy to visualize. Data-driven marketing aims at amazingly-designed customer experiences, but influences internal operations in ways companies have never seen before.

With so much information being generated at all times, data-driven marketing unites the right tools to track, segment, and optimize strategies. When used right, this groundbreaking approach will help you to invest in the right interactions to increase customer retention and bring you more marketing ROI.

Data-driven marketing benefits 

Now that you know the importance of data-driven and how it is revolutionizing marketing strategies, it is time to highlight some of its many benefits.

Segmentation

Data-driven marketing is the key to build marvelous customer experiences based on well-designed segmentation. The first step is to select the right customer segment to drive marketing efforts into. After that, you will be prepared to work on specific, tailored tactics to sharpen your customer touchpoints, whether they’re potential or not.

By segmenting a target market, it gets easier to develop products, solutions, and approaches that will attract the right people to your brand. Segmentation also provides transparency when you wish to know how your campaigns are resonating with the public and gives you a better understanding of particular users’ behavior.

Customer acquisition

Four essential questions must be answered very carefully when you decide to attract target audiences and contact potential customers:

  1. What message will you tell them?
  2. How will you communicate with them?
  3. When will you reach out to them?
  4. Where will you find them?

In a data-driven approach, all of these questions will be respectively answered based on:

  1. Goals and pain points;
  2. How they behave;
  3. The best timing according to their routine;
  4. And the digital and physical places you’re more likely to meet them.

Even if you have a large number of customers, it is possible to combine data to deliver special, tailored touchpoints that match their behavior and preference. It could be an e-mail, or an SMS, or a live event. Possibilities are countless, but you will surely pick the best ones once you know what customers expect from you and how to engage them.

Data-driven marketing works efficiently when it comes to continuously deliver interactions to match customers’ expectations throughout their journey. With so much information at the palm of your hand, you will be ready to transmit the right message (what) at the right time (when) and place (where).

Revenue

Every company director loves it when technology saves the day by cutting costs and returning investment. Gladly, this is pretty much the case with data-driven marketing.

According to the Forrester report “Insights-Driven Businesses Set the Pace for Global Growth“, data-driven organizations grow 30% per year more than companies that don’t base their strategies on data.

When we take a good look at different markets, it gets even clearer that data-driven strategies embody assertive communication that makes ROI possible.

Custom-made marketing campaigns reach proper audiences, which leads to customer acquisition, which leads to customer engagement – and ROI is coming back to you in each one of these stages. Not to mention the revenue currency that comes from these approaches.

Revenue is also possible by cutting costs, reducing churn, and democratizing information through different companies’ sectors.

Upgrade your marketing strategy

Automation was already a buzz when CRMs arrived to transform the way marketers dealt with customer data. From purchase details to personal information and preferences, CRM was and still is prepared to collect digital data at higher levels. This allows big data to play a more predominant role in marketing: Data is now at its core, deciding the directions companies should take to reach their goals.

It must be said that collecting data became a more complex task, especially when you take the number of multi-channels available these days. Still, this complexity isn’t an excuse: If brands don’t automate operations related to those channels, they will lose way too much time putting effort into what can be automatic, and marketers won’t be able to strengthen their creative side and propose remarkable tactics.

Fortunately, there is a considerable amount of data-driven tools that optimize, clean, and filter important data from multiple sources, whether they’re 1st (directly extracted from customers) or 3rd party (found in the market).

Data-driven marketing automation saves you time, money, and free your team to focus on more important tasks that require human abilities, such as creativity. That is how you truly upgrade your marketing strategy: By quickly analyzing qualitative data and returning a creative response to customers’ issues.

This means a wider customer reach, more relatable content, targeted ads, and personalized customer journeys – to only quote a few.

Don’t forget that numbers and reports play a crucial role in data, but the outcome will only be useful if the human eye analyzing them gets the right insights and develops accurate replies to get closer to customers.

Impacts on customer experience

Lincoln Murphy, known as the Customer Success guru, says that Customer Success is only achieved by combining what customers need to an appropriate experience while delivering the right interactions. As you know now, this has everything to do with data-driven.

Data-driven marketing is a new shift in customer care. It prioritizes customer experience in smart and strategic ways, such as we have never seen before.

Many marketers around the world have embedded data-driven strategies into their routines, taking their time to analyze information that will drive to ideal customer experience. With so many benefits, data-based decisions impact consumers on profuse levels. Take a look at some of the impacts:

Personalize customer interactions 

Needless to say, real engagement is closely related to giving customers a personal touch in everything you do.

Irrelevant content, general messages, and ordinary offers will only frustrate the current consumer. People expect brands to customize every touchpoint and suit them to previous steps of their consumer journey. This means companies need to enrich and individualize communications that work in a one-to-one approach to get in touch with customers and prospects.

While 74% of consumers feel frustrated by irrelevant content, 56% of them would reward personalization with a purchase.

Data-driven tactics are the perfect response to this personalization requirement. It allows you to incorporate consumers’ inclinations, pain points, and attitudes to deliver personalized experiences both in digital and physical fields.

Content personalization also turns your communication more persuasive, improves customer conversions, and boosts engagement.

Improve products and services

Products and services can also be personalized and better designed to respond to buyers’ expectations. Analyzing clear data will help you understand whether you need to develop a new product or give an existing one new functionalities to match your customers’ needs. This kind of information also guides you to make the right decisions on when to invest in innovation and when to change small details that make a difference.

Besides, data-driven marketing ensures companies always keep an eye on the market to launch tailored, untried products. Data will assist you in when to launch something new, to know how much people are willing to pay for your products and services, and what can be enhanced to increase customer satisfaction.

Ask for feedback 

Another way data-driven marketing impacts customer experience is via feedback. Remember that people use social media to discuss brands and experiences, and when they talk about your company, you should be the first to know. Practices like social listening will help you monitor what people say on social media networks and collect precise data to gather feedback and insights into what’s working and what needs refinement.

Predict customer trends and market changes

Customers are avid for brands that can communicate and act based both on their individual preferences and what’s going on around the globe. Sustainability, social responsibility, storytelling… These are all actual trends that brands should pay attention to while planning their year. Closing your eyes to the market and only focusing on customer behavior is dangerous, as the external environment can dictate what trends will create buzz and what you can do to make people more interested in your brand.

Data-based predictions are important to keep you one step ahead of your competition, especially in times of change. Timing is crucial: Losing the chance to reply quickly to changes and real-time events might harm your brand in ways you never thought possible. With that in mind, make sure you use data to be prepared for change.

Reach customers where they are

Uncovering the best channels for promoting your brand can be a challenge, but data-driven marketing clarifies what those channels are and how your customers use them. This will prevent you from investing unnecessarily in channels that have bad ROI and planning media usage poorly.

With a more concise understanding of trends, you may get a broader view of channels’ tendencies to use them correctly, building more responsive communications. Batches of customers will also benefit from an enhanced content distribution from your part.

Make customers more engaged

Data automation is the ultimate principle to direct creativity into engaging strategies. In the past, marketers could only deliver a few types of customer service — versions back then didn’t vary, and general communication was even acceptable. Nowadays, though, our hectic and ever-changing routine requires more from brands. If you want to truly engage customers and make them loyal to your brand, you better start seeing data as the main resource to achieve better engagement rates.

More interested in experiences than in products, customers these days expect to be listened to and empowered by appropriate brand responses. Not only people are willing to pay more for better experiences — engaged customers are ready to invest emotionally in brands, and this is vital to any long term customer relationship.

Besides making you relevant in consumers’ minds, engagement pays your bills. Companies that have improved engagement increase purchase frequency and order sizes. This keeps revenue coming in and customers satisfied with relevant buying and connection experiences.

How to work data-driven in consumer segmentation

To apply data-driven marketing in your company, you need to be ready to extract, treat, compare, and analyze digital information from multi-channels, transforming it into knowledge.

We know this multi-channel information means millions and millions of data coming from social media, website analytics, cookies, CRMs, consultancies, market data, competitors, and more. But, thanks to technology and digital transformation, data-driven companies use analytics and algorithms to filter and select types of data that matter the most to them.

There are data-driven solutions — software and methods — that will help you segment your customers and visualize information in intuitive reports. With the advances of machine learning and artificial intelligence, machines gather data around and bring it to you whenever you need it.

One of these tools is the Customer Data Platform, also known as CDP. A CDP should provide you with the right insights to create personas, attract and qualify leads, create new content strategies, and develop customer relationships.

Be aware that marketing segmentation is a key-strategy when it comes to the data-driven mindset. Separating customers by interests, job titles, age, location, gender, and more is an amazing strategy for companies that wish to come up with outstanding marketing strategies instead of sending mass emails and trying to acquire leads through general advertising. Segmentation will pull you closer to generate real-time audience engagement.

For example, in 2015 Very.co.uk combined customer preferences with data about the weather to create personalized homepages to attract consumers to their e-commerce. In the process, 1.2 million versions of the website could be displayed, matching customers’ interest. For example, if you were looking for homeware, your homepage would bring special promotional messages that had everything to do with the products you were looking for. It is completely personalized — and that was only possible because Very.co.uk data scientists created complex algorithms to predict customer behavior.

Nubank, the largest Fintech in Latin American, is another company that embraces data-driven marketing to customize the customer experience. Nubank created ‘wows’, the name given to specific gifts customers receive when assistants feel a special type of connection while serving them.

Every gift is designed especially to the customer, considering their preferences and context. Nubank recently gave a consumer that owns 85 dogs a box full of dog toys, bone-shaped letters (written to the customer herself), and a device that throws dog treats in the air.

Examples of data-driven culture

Data-driven marketing has been so relevant it is leading a policy of its own, known as data-driven culture.

Data-driven culture allows organizations to replace opinions and guesswork with data-derived facts. Here, data is the main resource for collecting and leveraging insights in every company’s department. For this reason, all operations and routines will revolve around it, creating a new decision framework that relies on collaboration to move, integrate, and combine data more efficiently.

This means information must flow effortlessly through people, processes, and solutions so decisions can be made in a matter of seconds. There is no time for waiting: Business intelligence, technology, sales, product, marketing, and many other teams must have quick access to data to enhance customer interactions as swiftly as possible.

To give you a real case example, The Coca-Cola Company in Brazil assembles a data-driven culture to machine learning and AI to analyze its market and consumers. From three to three months, Coca-Cola employees set goals based on data and measure their progress through indicators and continuous information exchange.

It is also interesting to mention that Coca-Cola uses digital as a leading measurement tool and values people diversity to boost collective learning.

Worldwide, Coca-Cola is also known for its successful data-driven campaigns and agile mindset. In practice, data helped Coca-Cola deliver the Cherry Sprite flavor, which was inspired by the fact many customers mixed their drinks in self-service drink fountains. It also drove the company to create personalized AI assistants for vending machines that can behave differently and allow consumers to personalize drinks.

To mention one more example, Coca-Cola has been using data-driven marketing to track photographs of its drinks on social media, using image-recognition technology — this allows the company to target customers and deliver more efficient adverts, considering their consumption behavior.

At the end of the day, it’s clear to see that companies that have absorbed data-driven culture are completely different from companies that haven’t. Data-driven companies achieve tremendous results by dealing with complex multimedia channels — like videos, social media, ads, email, and liveblogs; — to reach customers with the right message at the right time. This ability is closely tied to automation and analytical approaches, which permits operations to be optimized, and audiences to be attracted more effortlessly.

Data-driven marketing is the future 

We know making the best marketing decisions is a challenge as much as it is a basic requirement. Moreover, facts tell us the future of organizations will be decided by the ability to use data wisely — and we know you don’t want to be left behind.

Arena helps media companies all around the world to encourage engagement and streamline customer data to smart marketing campaigns.

If you’re willing to be assisted by a Customer Data Platform to boost your audience and work data-driven marketing with your customers, get to know more about how we can create powerful experiences for your users.