First-Party Data Collection Is Mission Critical

First-party data collection is fast becoming a top priority for many digital brands and publishers. For marketers, community builders, and publishers, first-party data matters because it brings a direct relationship. First-party data is provided directly by the end user to your company. There are four reasons why first-party data should become one of your top digital priorities this year.

Five Reasons Why First-Party Data Is Indispensable

Shifting your online growth efforts to focus on first-party data collection is vital for five key reasons. 

1. First-Party Data Offers Better Revenue Growth Potential

Gathering first-party data collection means you have a one-to-one relationship with your Community. Boston Consulting Group and Google found that first party data based strategies delivered a 290% increase in revenue. Even better, first-party data delivers significant cost savings! For marketers concerned about making every dollar stretch during economic uncertainty, first-party data is the best choice.

2. The Coming End of Third-Party Cookies

For years, third-party cookies quietly fueled billions of dollars of digital advertising. These cookies made it possible to track user activity across multiple websites. While third-party cookies made online marketing easy, they have raised numerous privacy concerns. As a result, the value of third-party cookies is going to collapse soon as Apple and Google (Who collectively control the most popular web browsers) end support for them.

For a detailed breakdown of the rise and fall of third-party cookies, see our infographic: 

In other words, the old way of doing business – relying on cookies – is about to end. 

First-party data is the future.

3. Uncertainty About The Successor To Third-Party Cookies

Even as third-party cookies come to an end, there’s continued demand for personalized advertising. Google has been working hard to develop a replacement for cookies through its Privacy Sandbox initiative. Unfortunately, that effort has been delayed several times. There’s considerable uncertainty about whether Google’s new approach will work for advertisers.

4. Data Privacy Expectations Create New Expectations (and Penalties!)

Companies can no longer afford to take a casual approach to user data and privacy. GDPR (General Data Protection Regulation) in Europe and the CCPA (California Consumer Privacy Act) in California have decisively shifted privacy expectations. While it’s true that these legal changes do not directly affect every company, there’s no denying that privacy scandals and user expectations have shifted. It’s simply getting more difficult to fuel growth by relying on data collected by other companies.

5. Social Media Platforms Are Struggling

It’s no secret that the biggest social media platforms are struggling to keep users happy. Twitter and  Facebook are struggling to grow and fight harmful content. Advertisers are getting worried and looking for the exits. 

It’s time to reassess whether resources dedicated to social media can find a better return elsewhere – like growing your community directly on your website.

For a complete overview, see our post: Why The Largest Social Media Platforms Are Declining And What To Do Next.

The good news is that the vast majority of companies already have some amount of first-party data. For example, Google Analytics (or your preferred web analytics app) gathers some first-party data like audience demographics. Other company systems will have even more valuable data, such as purchase history records, interactions with the sales team, and more.

The Problem With “First Part Data Collection” Thinking

By this point, it’s clear that we see first-party data as valuable and vital to the future of online growth. Yet, there’s an attitude that might slow your progress substantially… The problem lies in the phrase “first-party data collection” itself.

Looking at first-party data as a resource to be collected is problematic. It encourages you to consider your users as a mineral to be mined. That kind of thinking plays well in a spreadsheet. There’s just one problem with the “collecting data” mindset – it deemphasizes relationships and humanity.

Your audience needs to look forward to visiting your website to succeed in the long term. Your audience needs to be happy to volunteer information, comments, and more with you. In short, they need to trust you. And that trust from your audience needs to be earned by providing value.

Long-Term Strategies To Earn First-Party Data That Your Audience Will Love

Earning audience permission to obtain first-party data takes some work. The days of relying on sneaky tactics and hiding permission in the fine print are ending. Instead, you need to build and sustain trust from your audience in the following ways.

Bring People To Your Website With Content

To earn first-party data, you need to bring people directly to your website or app. For most companies, the single best way to attract people to your website is to recommit to quality content marketing. Give your audience practical examples, inspiration, and even entertainment! Those strategies will help to succeed online.

Creating compelling content that serves your audience and meets the needs of search engines takes time. Fortunately, you can use Arena Live Blog to accelerate the process. Get the details in our guide to improve your SEO with your live blog.

Content on its own isn’t enough. After all, competitors may find ways to create similar content. The better approach is to enrich your content with engagement technology and community.

Deepen Relationships With Engagement Technology

The most successful personalization requires significant data. Obtaining that data requires significant interaction with individual users. If your users come to your website, view content for a matter of seconds, and then disappear, you’re going to face an uphill climb to gather first-party data.

What if you had a way for your users to spend 5 minutes, 10 minutes, or even an hour on your website? You don’t have to create a streaming service or YouTube clone. Instead, you just need the right engagement technology: Arena Live Chat and Arena Live Blog. Arena’s engagement technology is fast and takes minutes to install on your website.

Transform Your Website Into A Community Hub

Once upon a time, companies viewed their website as digital brochures. That approach will not cut it anymore, thanks to social media. Connection and community have become vital. However, social media platforms are increasingly becoming toxic sources of misinformation. 

Your website can offer something different – a brandsafe community experience for your users. For example, a news publisher can offer exclusive Q&A experiences with award-winning athletes and business leaders. Arena’s moderation features mean that you can quickly stop profanity and other inappropriate content.

Offer Live Experiences To Your Audience

Virtual events, live shopping, and hybrid events are some of the most popular ways to drive revenue and engagement with your audience. Not sure what kind of live experience to offer your audience? Take a few minutes to review your analytics to see what kinds of content your audience is already most interested in. That will give you a starting point to craft a live experience.

Live Shopping

Live shopping is the marriage of entertainment with shopping! Industry research shows that live shopping experiences are already driving billions of dollars in spending. Don’t have the right on-screen talent available in your team to get started? You can partner with online influencers to host the event for you. Live shopping, sometimes also known as livestream shopping, can include product unboxing, demos, and product launches.

To discover more ways to use live shopping for growth, learn the best way to make live shopping successful.

Unique Experiences 

Exclusive experiences and connections are one of the key reasons why people pay to go to conferences and other events. One-of-a-kind experiences – like an Ask Me Anything with an industry leader – are a powerful way to attract your audience. As the event unfolds, your audience will share a wealth of first-party data in the live chat.

Grow Through Other Events Your Audience Cares About

Organizing your own events is just one way you can use to grow. In 2022, Arena quickly built an online hub dedicated to the World Cup: How We Created Live World Cup Coverage for Every Game

To apply this live experience strategy to your business, find out what your audience cares about and then look at upcoming events you can leverage. Effectively curating existing content – and adding your own perspective on that news – remains a great way to create compelling content.

Planning and executing a successful online event series doesn’t have to feel scary. Arena’s resources are here to help you to launch events. Use our free virtual events checklist to plan a stress-free experience that grows your audience (and yields plenty of first-party data simultaneously).

How To Make It Easy To Earn First Party Data, Week In And Out

As you gather more insight into what makes your audience tick, it’s easier to connect with them. That means less guesswork and more conversions without constantly increasing your budget. To keep your audience engaged, you need content, experiences, and community. Use Arena to transform your website into a digital community where your audience is happy to keep coming back. 

First Party Data For Brands: Ways To Lift Revenue

First-party data is quickly becoming the new opportunity to fuel personalization, customer engagement and online growth. Publishers are already starting to use first-party data to deliver customized experiences to their audience. For retail and ecommerce brands, there’s a tremendous opportunity to grow with first-party data. 

What Is First Party Data Anyway and Why It Matters

The best way to explain first party data is through a quick story. Imagine you’re running digital marketing at an apparel company and you’re looking for ways to sell more shoes this quarter. You have many different options and resources to choose from. One decision you’ll have to make upfront is what kind of data to leverage.

Consider planning your campaign by reviewing past customer activity. For example, you may look at website analytics to see which product pages are already receiving the most traffic. In addition, ask your customer service colleagues to summarize what kind of questions and complaints you get. All of this data comes directly from your customers, website visitors, and email subscribers. That’s all first party data.

First party data is often contrasted with another popular type of marketing data: third party data. For many years, digital marketers have used third party data for growth. Third party data is customer data generated by other companies. While this type of marketing data is popular, it’s becoming less useful for two reasons.

There are two reasons why companies are moving away from third party data. First, it is less transparent to consumers and can result in negative feedback. Second, Google and Apple are ending support for third party cookies (a popular technology that enables many third party marketing campaigns) in their browsers. 

First party data has multiple applications regardless of how you sell products. Let’s take a closer look at some of the most powerful use cases.

Retail and Ecommerce Use Cases For First Party

At its simplest, first party data is data that you gather directly from your customers, website visitors and others who interact with your brand online. Leveraging first party data makes it easier to achieve several sales and marketing goals.

Achieving Marketing Goals With First-Party Data

Systematically using first party data makes it easier to achieve your digital marketing growth goals. 

Optimize Your Content Marketing Efforts

First party data tells you what content, links and assets your audience finds the most engaging. For example, start your analysis by reviewing your top 10 pages by traffic for the past 90 days. Ideally, focus on the pages that have driven the most conversions (e.g. purchases, website signups etc). 

Based on what you find, you can make better decisions about your content marketing strategy. An athletic apparel ecommerce company might find that their ultimate guide for marathon running drives the most conversions. Based on that insight, you may create more content to attract marathon runners to your website. 

Reduce Digital Marketing Expenses

Success in digital marketing requires the patience to experiment with new ideas, technologies and campaigns. The downside is that many marketing tests may not deliver significant results. When marketing budgets come under pressure, you may be asked to stretch your marketing dollars further. First-party data can play a powerful role in lifting marketing efficiency in the following ways.

Optimize Referral Campaigns

Word-of-mouth referrals are one of the most powerful ways to grow online. That said, sending out a blast message to your entire database is unlikely to work.

It’s far better to focus referral campaigns on your VIP customers – the ones who buy over and over again. First party data can help you identify your best customers which means you can create a far more targeted referral campaign.

Boost Loyalty Marketing Efforts

Many retail companies have loyalty programs because these efforts effectively encourage repeat business. The data you gather from buyers through your loyalty program is one of the most valuable forms of first party data. 

Analyze the buying patterns of your top customers and then use those patterns to inform your new campaigns. For example, you may find that 80% of repeat shoppers start by buying low-priced products. Use that insight and prepare a loyalty campaign to encourage one-off buyers to buy that product.

Increasing referrals and loyalty sales don’t require additional advertising so they’re a great choice when budgets are tight. You just need to focus on analyzing your customer data and executing campaigns based on those insights. 

Achieving Sales Goals With First-Party Data

Some businesses are not focused on online sales. For example, industrial products, vehicles and enterprise software are rarely bought in a matter of clicks. In these more complex sales, first party data can support your sales goals.

Identify High Interest Sales Leads

Sales professionals only have so many hours in the day. First party data can play a role in lifting the efficiency of sales conversations. An analysis of first-party data can identify the prospects who are the most engaged with your content and may be open to a sales call.

Earn Attention With Relevant Content

Complex sales can take weeks, months or even years to close. Staying in touch with prospects during these longer customer journeys takes a lot of work! You can only send a “checking in” style email so many times. 

First party data can support the nurturing process. You can see which content your customers access in the lead up to purchase and afterward. As a result, you can craft follow up messages focused specifically on content that resonates with buyers.

From First-Party Data To Deeper Engagement

Simply gathering and using first party data will give you an immediate advantage in making sales and reaching your marketing goals. 

Ultimately, your goal isn’t really focused on getting data (even highly useful data like first party data). You want to build an audience of people who look forward to visiting your website regularly. An audience who finds insights, connections and experiences all through your company is one that will stay loyal. 

The secret to gaining first party data and deep engagement requires the right technology. That’s where Arena Live Chat technology comes in. You can install it in just a few minutes and get up and running. Discover more about how Arena can help you grow ecommerce revenue!

Stop News Avoidance Now: 3 Engagement Principles

Many publishers still offer a standardized news experience that looks the same to everybody. That “one size fits all” experience is there for a reason – it’s inspired by the print experience that offered a uniform page to every subscriber. That’s no longer enough to connect with audience preferences that revolve around data-powered personalization.

The way to win audience engagement and subscribers requires personalization and data. Social media platforms like Facebook, Twitter, and YouTube present customized experiences based on the user’s connections and preferences. Other online services like Netflix and Amazon have also leveraged personalized experiences to grow engagement. 

There’s a clear ROI to investing in personalization. Industry research suggests that high levels of personalization can lift conversions by 30% or more. That means increased subscriber sign-ups and fewer cancellations, key ways boost revenue and profitability.

Offering personalized experiences helps to lift customer retention and audience engagement. For publishers, personalization is also vital because publishers are facing a crisis of confidence and trust.

Misinformation And Declining Trust: An Existential Crisis For Publishers

Growing audience engagement and subscriptions become difficult when audiences do not trust a publisher on a fundamental level. The Pew Research Center has found that trust in national news organizations fell from 76% in 2017 to 58% in 2021. The same research also found trust is falling for local news from 82% in 2016 to 75% in 2021. Distrust isn’t the only challenge, either.

The Reuters Institute for the study of Journalism found that 72% of news industry leaders found that news avoidance is a challenge. Avoiding the news is driven by, “a response to media coverage related to politics, climate change, inflation or coverage of the war in Ukraine, which leaves people feeling overwhelmed and powerless.” says News Media Canada.

Solving news avoidance will also take a variety of strategies, including editorial changes. The Reuters Institute argues that explanatory journalism, Q&A formats, and inspirational stories are worthwhile solutions to news avoidance. All of these changes have their place in leading to a solution. 

Solving the misinformation crisis will ultimately require collaboration across society, including educators, publishers, and other stakeholders. Publishers have an opportunity to lead the conversation by enhancing trust.

Laying A Foundation For Trust: Integrity, Data, and Personalization

Restoring your audience’s trust in your publication starts with developing three principles: integrity, data, and personalization. These principles can then help to guide you through the tactical steps to follow.

Principle 1: Integrity

Publishers can earn trust by restoring a focus on integrity. Fortunately, many publishers and journalists are committed to practicing good journalism ethics. That said, some of the commitment to integrity is invisible to your audience. With some measure of transparency, it is easier for a skeptical audience to trust you.

Improving your publication’s reputation for integrity will depend on how your audience perceives you. The following methods can help you to enhance your perceived integrity.

Reinforce fact-checking

When a publisher fails to collect and present accurate information, it’s tough to maintain audience trust. For high-profile stories, it’s worth making the extra effort to verify the facts. Investing more effort into accuracy will also help to separate your publication from less professional outlets.

Own your mistakes and follow up

Every publisher makes mistakes now and then – it’s inevitable given the tight timelines and other pressures of publishing. When mistakes happen, whether factual errors or something else, take the time to update your digital stories with corrections. Many publishers already do this, so implementing this best practice is vital to staying  

Invite your audience to occasional behind-the-scenes conversations

Occasionally pulling back the curtain on the publishing process can also help to build trust with your audience. For example, share how you approach high-profile or controversial coverage. By revealing the care and due diligence you use, inspiring audience trust will get easier.

While integrity matters, it will only take you so far. To compete successfully against the largest media outlets, leveraging data and personalization is vital.

Principle 2: Data 

Data is the next element in solving news avoidance and boosting audience engagement. Specifically, publishers need to make gathering and using first-party data a priority. First-party data is gathered directly from your audience without relying on anyone else. Asking consumers to provide more data is more likely to succeed when the audience sees value.

There are several ways to invest more deeply in data to build audience engagement and grow, including the following:

Deepen your audience understanding with first-party data

First-party data means information your audience has directly provided to you. For example, you might track opens and clicks on your email newsletter. That data gives you direct insights into what your audience values.

Upskill your journalists on data literacy

More and more stories and coverage today require data journalism skills. Whether you train staff, recruit people with this expertise, or take a hybrid approach, data skills matter. The capacity to analyze data critically for your audience will become a key way to build trust and counter misinformation.

Principle 3: Personalization

Personalization matters in rebuilding trust because it shows that you are paying attention to what your audience values. For many publications, personalization based on first-party data is the largest opportunity for growth. Therefore, we’ll explore this opportunity in the greatest depth.

Depending on your goals and resources, there are multiple ways to personalize the subscriber experience. Here are some of the most popular ways to personalize the subscriber experience.

Personalize The Homepage Experience

Many publishers, especially those with a background in print, present their home page

like the front page of a newspaper. Some subscribers may like that approach, but it may not work for everyone. Give subscribers the option to customize their homepage experience based on their interests. For example, some of your audience may want in-depth political coverage, while others only want to see breaking business stories.

Tailor The Email Experience

Your email newsletter experience is the next opportunity to leverage personalization. Take inspiration from the Morning Brew, an email-only news publisher. The publication started with a general news publication broadly focused on technology and business stories in the US. More recently, the company has created separate email newsletters based on job roles (e.g., CFO Brew) and industry interests (e.g., Marketing Brew).

Arena Live Blog makes creating this kind of experience easy! For example, a new publisher could set up a live blog feed for local news and  another for sports and create an email newsletter based on the most popular content. In that way, your email newsletter delivers only the most popular content to email subscribers!

Invite Subscribers To Exclusive Events

Welcoming your subscribers with premium events is one of the best ways to offer a personalized experience. From the audience’s perspective, an event is a powerful networking opportunity because you can ask questions and interact with people who share your interests. From the publisher’s viewpoint, digital events are a powerful way to deepen audience engagement and gather data.

Running digital events doesn’t have to be complicated either. You just need the right tools – like Arena Live Chat – to get started. Check out the next section for tips and tricks on how to use live chat in your events!

Let’s take a closer look at how publishers can use digital engagement and events to engage their audience.

Unlocking More First-Party Data With Events: 4 Strategies

Unlike static articles, podcasts, or videos, interactive events offer the chance to connect with others who share similar interests. 

Expand Access To In-Person Events

A growing list of publishers like TechCrunch and WIRED offer in-person events to serve their subscribers. For those subscribers able to attend these events, there’s nothing quite like breaking bread with other people. However, the reality is that many of your subscribers may not find traditional events convenient to attend due to travel costs and other responsibilities.

The solution is to offer a digital pass to your event. Using Arena Live Chat, you can use chat experiences on your website to engage your subscribers in various ways. For those who buy digital tickets, you might offer an intimate small group event to interact with your publication’s top personalities. 

Run Brandsafe Events With VIP Guests

Every industry and interest has celebrities and thought leaders. Building an event around an exciting guest is one of the best ways to create an enticing event experience. One challenge associated with running a live event with a high-profile guest is moderation.

While many celebrities have a large fan base, such personalities inevitably attract their share of detractors and haters. Arena has you covered here! You get customizable AI profanity filters to stop the most common “not safe for work” language from ever making it into your chat. Also, Arena provides moderation features, so your staff can filter questions and comments before posting them.

Enhance Coverage Of Live Events

When a big story breaks, your audience will be hungry for up-to-date coverage and analysis. Major events in sports and politics offer tremendous opportunities to provide in-depth coverage. 

Arena Live Blog is one of the best ways to increase engagement during these high-profile events. Your team can leverage a combination of breaking news and content created in advance (e.g., explainers, Q&A with experts, etc.). A live blog – which some publishers call ‘live updates’ – makes it easy to provide short updates. 

When a major news story breaks, your audience may take to social media to share their thoughts. Arena Live Blog equips you with curating social media content to enrich your coverage. However, unfiltered social media can bring low-quality and inappropriate material. 

Arena Live Blog keeps publishers in control of how they bring in social media content. You can use a combination of automation and manual filtering to ensure that every social media update you feature meets your brand guidelines.

The Path To Bringing Personalization To Your Website

Building trust and engagement with your audience is a journey. Yet the first few steps of lifting engagement don’t have to take a long time. Many companies find they can install and implement Arena Live Chat and Live Blog in less than an hour (some are even faster!). Discover Arena’s solutions for publishers!

How AI and Live Chat enhance Black Friday experience

How will your business compete with the biggest brands in the market now that the busiest time of the year for retailers is here? You need a little help from Live Chat and AI!

To understand why these two are necessary, I think it’s important that we give you some context:

Today, consumers expect their favorite brands to know them almost personally. However, at the same time, they don’t want to feel overwhelmed by random ads popping up while they’re navigating online.

How does one establish that fine line between personalization and data privacy?

That is a big challenge. One that also revolves around the GDPR, a regulation for Customer Data protection. But there is already a solution for brands to keep working with their clients’ information while still following the law.

So, to make your marketing and sales strategies create a real connection with the consumer, you need the help of artificial intelligence (AI).

Especially when dates like Black Friday and Cyber Monday are getting closer, companies need to focus more on targeted shopping experiences to enhance their results. Because of that, every marketing effort needs to be assertive.

Through AI technology, you’ll understand what makes a purchasing decision happen and what leads to an abandoned cart. 

Long story short: it’s all about Customer Experience.

Keep reading to learn all about how to enrich your eCommerce this year by:

  • knowing what is and how to use AI on a Live Chat
  • understanding how AI will improve your customer experience
  • using a Live Chat for Black Friday
  • learning what the role of Customer Data in modernizing your brand’s Black Friday experience

What is AI?

From the popular Siri and Alexa to self-driving cars, artificial intelligence has become quite common these days. It is a computer science branch that develops machines capable of performing tasks that would typically require human intelligence.

For example, talking to a customer through chat support.

Nowadays, companies are using this technology more and more, putting it to different uses. Whether it’s to perform a support service or to automatize personalized recommendations.

Why is this happening?

Simply put: because AI can create valuable knowledge for a business strategy. I mean, not only can it collect and analyze Customer Data, but it can also select what is relevant and what is not. Even more than that, it can actually understand what needs to be done to reach the customer the right way (and at the right time).

Arena AI Concierge for Publishers, Content & Affiliate Commerce is here. Request early access.

How will AI improve customer experience?

One of the biggest issues retailers face today is personalized content and offers to their customers. Usually, the major retail brands out there can do pretty well on this matter. They use systems that allow data collection and content personalization.

However, some of these data come from third-parties. Now, you might be asking, “why is that a problem?” Well, this type of data typically comes from external sources, that is, not directly from the relationship between the brand and the customer.

The most reliable way to work with Customer Data today is to focus on first-party data, the type shared with the brand from the consumers themselves. That is where the opportunity to enhance business results is.

You can easily do this by using a Customer Data Platform. That’s the best guarantee you’ll be working with clear, assertive data. Any guess on how this platform works? Yeah, that’s right, with AI.

Some more examples of how AI can be used to enrich your customer experience:

Online chatbots

There are two types of chatbots, the simple ones and the ones that work through AI. This first type is pre-programmed with questions and answers, so the client can’t really ask a question. They can only click the options available on the chat.

The second type, the one we are indeed interested in, is the AI chatbot. It has some pre-programmed information, but it works mainly through machine learning. That means that each customer attended will make it learn a little bit more.

At first, it may not be so efficient, but it will become a robust customer support tool as it keeps being used. That’s actually why it’s recommended to test it out and use it before making it available to your consumers.

Machine learning

As mentioned right above here, AI is directly associated with the machine learning concept. 

Where do I want to get with this information?

Well, machines don’t just learn information about the customer. They can also learn how to detect the tone of voice and sentiment in their communication. This allows retailers to see how their products impact their audience, what makes them desirable, and what doesn’t.

Besides, they can use this information to create offers and ads that trigger the consumer’s emotional aspect.

Analytics and personalized recommendations

Every bit of information is beneficial for a company, even more so when a system performing through AI does the main job of selecting the most important for you. When AI learns what customers are saying about the brand (both online and in-store), you can analyze that and create new ways to improve the facets that are getting complaints.

In the same way, you can work with marketing and sales teams to refine the method you’re currently using to attract and retain customers.

A CDP, for example, gathers similar customer profiles into a singular place. Then, you can use it to send personalized offers and promotions.

Targeted deals and promotions

So, here it is. The pot of gold at the end of the rainbow!

Targeting is the key to success this year. You need to nail your segmentation groups to achieve the best results you possibly can. Additionally, using connected strategies will make your goals easier to accomplish.

Live Chat is an example of a tool you can use to reach those groups I’ve just mentioned. By being proactive and sending the first message like, “Hey there, do you want to learn how to get 50% off on this product?” results will come quickly.

Of course, it’s necessary to know what the customers like and dislike. What drives them away from hitting the “finish order” button? 

Once you have that answer, your work with targeted deals and promotions will be at its prime.

Better understanding and tracking of consumers

For that reason, artificial intelligence also assists in knowing your consumer. While it gathers customer data, all the information is read, analyzed, and selected to present only what actually has some value to the company.

When AI solutions were being created, aiming to help retailers do better in the sales department, no efforts were saved.

What do I mean with this statement? Well, have you noticed that each topic I’ve included here has completed each other? That is an indication of how AI technology works and how it’s thorough doing its job.

After the technology you’re using to help your brand collect and analyze information from your consumer base, you’ll just need to take that, transform it into a strategy, and define what the next steps and goals to be achieved are.

The live chat experience

I’ve talked about live chat above, and I think it’s interesting to focus our energies on this subject a little longer.

First of all, what is live chat? If you’re still wondering about this, let’s make it clear: it’s a tool similar to chatbots, but the conversation happens with a human agent, not a robot. Although, it can also be programmed with some automatic bot messages — such as, “an attendant will be available in about 2 minutes, hold tight.”

It works for many purposes, but the main reason is sales, followed closely by customer support. It can also be used for marketing, cross-selling, and retargeting; strategies. For most of these, you can be a proactive chatter; that is, you can send the first message instead of waiting for the customer to start a conversation.

When you have this software installed in your eCommerce, you will notice the positive outcomes like increased conversions, qualified lead generation, and more productivity for your customer service team.

How will Live Chat help you during the Black Friday season?

This time of the year is the busiest time for retailers. Not only is it the period for Christmas shopping, but it’s also an opportunity to make big purchases (new notebook, phones, etc.). Many people wait for this season to get the best deals on the products they want.

Because it’s such a hectic period, especially on Black Friday itself, website pages might be congested, or people might need extra help to find what they want or to apply for discounts. Thus, Live Chat is a must-have gadget.

It provides your brand with a combo of better supporting customers and selling more. Overall, it generates the best Customer Experience you could ask for. 

Working with Customer Data

While using a Live Chat, you will need to perform your strategies through Customer Data. Even though the amount of data generated yearly is immense, you may have noticed it’s not so easy to work with it.

That’s because you need to stick to the GDPR rules of data privacy. So, instead of randomly collecting data and using it to reach more people over the internet, you should center your approach to using a trustable data system.

As previously mentioned, the Customer Data Platform is of immense help in this matter. It collects, selects, and stores clear and valuable information from your customer base. Moreover, it breaks data silos, automates marketing workflow, tracks shopping events, and so much more.

The Arena solution

Here at Arena, our AI is built to enhance the results of your business. Do you want to improve your campaign results? Arena is here for you. Do you want to have more engagement? Arena is here for you. Do you want to have a better branding experience? Arena is here for you.

Basically, we can solve any issues you have related to your Customer Experience and make the best of it.

Are you interested? Start by trying our Live Chat platform for free!

GDPR: How using a CDP solves cookies problems

The General Data Protection Regulation (GDPR) was created to give internet users more control over their personal information. Is your company working according to the law?

While you’re probably aware of the existence of this regulation, you may still not know all you need to about it. For example, did you know this law has existed since 1995? Yeah, and only in 2012 has it started being reviewed.

That happened because of the huge amount of data being generated nowadays. As a matter of fact, the foresight for the year 2020 was that 35 trillion gigabytes were going to be created. It makes sense that a project for data protection would start.

Approved in 2016, the GDPR is a project made in the European Union. However, it affects each and every country that has a connection with EU countries. That means anyone who buys or sells products or services with a country that is a part of the region needs to follow the data protection rules.

In order to make that job easier, many brands are appealing to the Customer Data Platform. This is a solution that works with Customer Data without breaking the law. To thoroughly understand how the CDP can help here, how the GDPR works, and more, keep reading this post.

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What is the GDPR?

With the growth of data usage came the need for some kind of regulation for brands to use information without becoming invasive to users online. Because of that, GDPR came into force.

As you can probably imagine, the main reason behind it is to protect the user and their privacy. Mainly because, with the amount of technologies nowadays, it’s so easy to gather data and use them to personalize ads and content. 

However, that only works if the user allows you to do it. If you send personalized offers for someone who has never even been to your website, it will feel like a privacy invasion.

With GDPR, the user or client has a guarantee of control over data collected. This means that the company needs to ask for permission to gather and store information about them. But, even more than that, the brand needs to make clear what kind of information is being collected, what it will be used for, how long it will be kept in storage, and who it will be shared with.

What about customers’ rights? To sum up what GDPR says about the subject, the client must have:

  • access to collected data
  • control to correct wrong data
  • possibility of data exclusion
  • access to review and deny automated processes using their data
  • visibility of data transfer to thirds

It does sound like a lot to keep track of, but it comes with a bigger reward: a trustful relationship between brand and customer.

What does that mean? Instead of looking like a privacy-invasor brand, it only communicated with the client according to what they alone decided to share with the company. Therefore, building their success through a highly tailored and excellent customer experience.

How do GDPR and CDP work together?

In order for the company to work according to GDPR rules, it needs strict control over the data they collect. They need to know where the data came from, where it is stored, how it is being used, who it is being shared with, and so on. Every single detail needs to be known.

So, this is where CDP comes into the picture:

The Customer Data Platform, CDP, is a system that does this thorough job with customer data. It collects, processes, and stores data that is relevant, useful, and clean.

Overall, the CDP is built to provide the company flexibility. In other words, even though it’s mainly used for marketing purposes, it can allow other software to have access to its information. 

Thus, the Customer Data platform does exactly what companies need, now that GDPR is out there. Since they need to know everything about the data, CDP is there for it.

What are some specific requirements of GDPR that the CDP is helping brands with? Here’s a few of them:

  • identify where data comes from
  • connect with other data sources
  • gather all customer data into a singular profile
  • correct data
  • document customer authorizations
  • manage and store data usage
  • privacy by design

Moreover, the Customer Data Platform is pivotal for first-party data collection. Something essential seeing that third-party data is becoming less popular by the day — which happens due to the lack of reliability in this type of information, that also breaks (most of the time) GDPR laws of data protection.

The use of first-party data is the goal from now on. With this, you can ask for permission of the user in the direct relationship of the brand website visitor.

In short, to work according to GDPR, companies have the option of not collecting data (kind of unfeasible in this day and age), collect less data than they used to, or use systems that work through those rules, like the CDP.

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What is there to know about the CDP?

As previously mentioned, the Customer Data Platform is the best alternative for brands that want to work with Customer Data while sticking to the GDPR.

It is a system developed to assist marketing teams, but it has grown into much more than that. That is, helping several sectors inside a company, like sales, customer support, and customer attendance.

For that reason, it has also become an essential tool to stand out from the competition while offering the best customer experience.

Through clear and reliable data collection, processing, and storage, a brand can custom content, offers, and ads according to both individual profiles and segmentation groups. Which, by the way, the CDP itself creates.

Additionally, all types of data are read by the software. Though it collects and gives preference for first-party data, it can also work with second and third-party data. What it does is select and separate what data is actually valuable for the company, putting it in storage, and what’s not. 

Here’s a detail to remember: it does this selection considering the regulation (GDPR).

Is there anything else you need to know about the CDP?

Of course there is. The CDP is a huge program that does a lot more than help you with GDPR. Inside its system, there is a client history. Thus, more than an individual profile per customer, it’s also possible to understand how each of them behave online — what kind of purchase they make, which products they’re interested in, etc.

What we really want to say here is that the Customer Data Platform meets your GDPR needs. Plus, it keeps you worry-free in relation to unreliable or illegal data usage.

So, even though we still would have a lot more to talk about with the CDP, let’s just highlight this: with this software, you only use information to personalize content provided by the client, him or herself!

And what does that lead to? A double benefit for the company: improve CX and brand credibility.

How to get a CDP?

You probably have no more questions left regarding the need of a CDP for accomplishing GDPR regulation. But you might still be wondering how to acquire a CDP solution.

The first step is simple: do your research.

Once you know what is in the market, you can easily pick a platform that will meet all your needs. 

You don’t need much more than that. Once you acquire the CDP, set it up and start using it. Simple as that!

Here at Arena, our platform is a guaranteed solution for working with Customer Data. With over a thousand clients, we know how to deliver what you’re looking for. Besides, we also have some other solutions to make your customer experience strategy go up the charts such as Live Chat, Live Blog, and Content Wall.

Now, back to our main topic, let’s see what’s next:

What are the CDP benefits for data usage in the GDPR era?

Along with some benefits already mentioned, like the complete work with Customer Data, there are other advantages that make the CDP complete software that any company should get.

For example, the possibility of all company employees to have access to the data — with due permission. Whether it’s a sales rep, customer support, or product developers.

Especially in the Customer-centric period we’re currently in, allowing every sector to have access to this customer data just makes the job easier and the strategy maintained with efficiency.

Now, there are three other reasons to have a CDP that are directly related to the GDPR project:

Low cost

In spite of not being the cheapest data control tool in the market, it does stand out as the most complete and provides the best price-performance ratio. One of the reasons that makes this possible is that the platform is already built and programmed without the need of an IT support team.

That is to say, you simply acquire the Customer Data Platform, make some basic configurations, and start benefiting from it. No need to hire a platform support team or anything like that.

Another thing: this tool is faster than others that work with data, such as the CRM. In addition, your goals will be reached easier and, likewise, faster with it.

Individual and unified profile

What happened before CDP came to the market was data duplication.

Let’s explain this better:

A system like CRM, for example, doesn’t have the capability of recognizing different actions made by the same client. So, if someone interacts with the brand through the website and then by email, the software thinks it’s two different people.

With the CDP, that problem doesn’t exist. It is built to identify and unify these actions into a singular customer profile. Thus, avoiding data duplication.

No matter how many interactions or where they take place, the platform will be able to understand it is the same person and gather the information in the same place.

Easy external access

Okay, so, we’re talking about how CDP is superior to other data collection systems. This doesn’t mean you need to get this platform and get rid of everything you currently use. Not at all. 

The Customer Data Platform has the ability to connect with other systems, so you can take advantage of all the data you already have by connecting your platforms and centralizing all data into one place.

Even more, if there is incorrect, duplicated, or data going against GDPR, the CDP can correct and/or delete this information.

This way, before you waste your current database, make sure if it’s worth it or not to practice this integration between platforms.

Moreover, other software that is not directly related to data collection could perform better with the help of a CDP database. Don’t hold back doing your research.

So far, you’ve learned some of the main tasks of a Customer Data Platform, but there is still a lot more to know about it. How about reading our ebook on the subject? The download is free and the knowledge is uncanny!

Reasons you should work with a CDP (Customer Data Platform)

Why should you invest in a Customer Data Platform? They are revolutionizing the business market, and there’s a reason for it. This system gathers all customer data into a singular font and creates a supreme tool to gain a competitive edge by providing unique and excellent CX.

The future of marketing is working primarily with customer data. This is already happening and has been occurring for a few years now. Data can talk about identity, contact, and even demographic information. But most importantly, online behavioral data is the factor that really makes a difference in understanding how to converse with the audience.

On top of that, data also generates knowledge about the market. So, more than getting to know the consumer, you understand better how to position the brand to attract the public’s attention. Working around the consumer requires a means to control all the information received. As consequence, the Customer Data Platform software was developed.

The CDP system gathers data from all available sources and organizes it in a database. Then, marketing and sales professionals can easily access that information and work on content creation. Besides, it provides insights for campaigns and new products (or modernization of existing products).

Read on to learn more about the importance of having a Customer Data Platform and how it helps businesses grow.

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Why is the Customer Data Platform so important?

A Customer Data Platform is a software designed to collect online and offline data. It deals with three main objectives: collect, analyze, and execute data. Though it was specially developed for marketing teams, it can still be used for other sectors inside a company.

With the organization of all available data, a marketing team’s work will be a lot simpler. By the way, the information contained inside a CDP comes from various sources: website, in-apps, social media, etc. One of the reasons the Customer Data Platform was created was to have all of the data generated from multiple sources gathered into one singular system.

The aim of putting together all information available about customers is to understand them better. The importance of knowing your consumer is undeniable, and the CDP can create an ideal consumer profile from the data collected. 

This means marketing teams have a goldmine in their hands. From the information found within this software, these professionals will know exactly who to talk to, how to speak, and even the best time.

Also, Customer Data Platforms work with real-time data collection. In other words, it gathers data from the first interaction of a user with the brand — whether that’s a visit on the website or an engagement on social media. And it’s not only about the information they share with the brand, like names and emails. So, even if that user doesn’t share anything at the start, their online behavior is already being stored.

It’s worth mentioning that everything is automated in the CDP, from the collection to analysis and database storage. Therefore, marketing professionals have to access the system and start creating content and campaigns.

Why work with customer data?

The reason to acquire a Customer Data Platform for your company is to work with customer data. In this scenario, you can pretty much ask yourself, “why to work with data collection at all?”. The answer to that question could not be more clear: to provide a better customer experience.

Have you heard about the customer-centric strategy? That’s a method of putting the customer in the center of every decision which most companies use nowadays. The reason for that is simple: customers are more demanding than ever before. 

Because the internet has so much information available, it’s harder to create a product or service that will make a person become a customer. Or, even more, make a customer loyal to the brand.

The only way to get to know the consumer and succeed in giving them the best experience is customer data. That is, all the information a company receives from the interaction with a client. Since these are known facts, working with them avoids speculations that could be way off the real deal.

Additionally, some benefits of managing customer data include better segmentation, personalized communication, broader audience understanding, an increase in revenue, and humanization of the brand. 

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That last item is related to what a customer expects from brands. They want the brand to connect and engage with them — just as much as the company wants their audience to interact and communicate too. Customers value their overall experience. It’s much more than only the purchase of a product.

To have a more appropriate data organization, companies invest in platforms that assist in analysis and make their daily work easier. These can include CDMs, CRMs, and CDPs.

What are the types of data?

Of course, to comprehend the best solution for your purpose, you might need a little more information on the types of data that can be collected. Because of that, here’s an explanation about what cookies are and also first-, second-, and third-party data.

Cookies

Cookies are probably the most famous type of data. It’s actually a package of data the computer receives when you first access an online page. After the cookie is on the PC, it will continuously send information to the company every time you access their pages.

More than tracking activities inside their website, cookies also have the function to store information that makes navigation more practical. For example, login and passwords — also called authentication cookies. 

Session cookies and tracking cookies are also varieties of cookies that gather when visitors are active, and the number of visits made to the same page, respectively. In addition, they have an important role in saving information for eCommerce. To clarify, if there were no cookies, shopping carts would be reset every time someone left the page to look for more items.

Even though they are so useful, their minute in the spotlight is coming to an end. Mainly because of privacy issues, cookies have become a concern for the audience. For that reason, browsers have decided to end the support of using cookies. Since cookies’ future is basically non-existing, companies are already looking for new ways to gather and access customer data.

First-party

This is the data collected straight from the relationship between customer and brand. Every piece of information gathered by the company itself can be classified as first-party data. It can be generated from monitoring the website, marketing campaigns, social media, etc. But also from website analytics platforms, CRM systems, and business analytics tools. 

This is the best type of data to work with. It’s the most trustworthy and reliable data. More than that, it’s also confidential data — since you are collecting it directly from your consumer, no other company will have that same information.

Of course, if there is no customer-brand interaction, no data about that person will be collected. That’s not exactly a downside, but it’s important to mention. That way, if your goal is to expand your audience, first-party data isn’t so recommended.

Second-party

Despite not being so talked about, second-party data is real. It’s essentially first-party data from another company. The idea is that you create a communication with a brand that has the same niche, but different products. Seeing that you’re not competitors, you can share each other’s first-party data and expand the brand’s audience.

This agreement between two companies can be an excellent means to improve your audience targeting as well. Further to this, you might create a bond with a powerful ally in the market.

Third-party

Third-party data can be used for the same purpose as second-party; however, it comes from a different source. That is: the information is bought from an external data provider.

Usually, companies that work with an incredible amount of data can decide to sell this information for other companies. Like most things in life, there are ups and downs. The positive point about buying customer data is that you’ll have a lot to work with, grow your audience, and practice better targeting. Moreover, purchased information is wide-ranging and can be used for several purposes.

On the other hand, this information is not exclusive. There are high chances of your competitor ending up with the same data package as you. This data isn’t so reliable since you don’t know where it came from and from who it is — the information is anonymous. Lastly, there’s also the chance of violating data privacy regulation.

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How to use data-driven marketing with a Customer Data Platform?

The primary intention of using customer data is to manage marketing strategies. This has become so huge these days. We even have a new expression in the business world: data-driven marketing. This is about creating a better experience and communication for the customer through data collected. Sound familiar?

A Customer Data Platform brings some benefits to the company that wants to practice data-driven marketing. For starters, the capacity of originating their own database. This gives the brand more control of sources and customer privacy. Easy access to information and anticipation of customers’ needs also get on the list.

The software will also have processes automated, meaning it’s easier to understand what data is essential and what can be left aside for the moment. As previously mentioned, each type of data is good for a specific strategy. Do you want more audience engagement? Get some first-party data. Do you want to expand your audience? Then work with third-party data.

Nonetheless, if you want to stand out in the market, use a combination of both types of data. That’s the most powerful tool you’ll have in your hands. And you know how it’s called? It’s the Customer Data Platform.

Why should you work with a Customer Data Platform?

There’s a whole list of reasons any company praises growth and customer satisfaction should acquire a Customer Data Platform. Some of those include:

  • knowing the consumer
  • improving relationship and engagement
  • creating tailor-made content
  • avoiding data silos
  • improving ROI
  • boosting predictive marketing

Coming from a wide variety of sources, the compilation of first-, second-, and third-party data into a singular system allows the Customer Data Platform to create the ideal customer profile and also unified customer profiles. Both of which will assist in a brand’s communication strategy.

More than that, the CDP works with real-time updates and connects online and offline data. Can you think of a complete database than this? Acquiring this solution will guarantee you better results in marketing campaigns.

Of course, a Customer Data Platform can be used as more than a marketing tool. It can help sales teams, product development, customer support, and pretty much all company sectors. Arena offers a CDP solution so you can work towards all your goals.

That being said, we want you to thoroughly understand what we do and how to use a CDP to your advantage. Because of that, we’ve created an ebook to explain more about it! 

Download it for free now: Customer Data Platform 2020: the future of marketing and sales.

Customer Data Platform: where audience data and sales strategy meet

Are you having trouble improving conversion rates and connecting customer insights from different touchpoints? A Customer Data Platform helps you understand your audience in a granular way and enables you to craft better campaigns and product offers.

Understanding customers always required brands to look at their audience through different lenses – whether through other marketing channels, relationship platforms, or customer segments. On the verge of Big Data culture, however, just having a fragmented view of your audience is not enough anymore. 

What drives sales is the ability brands have to deliver a cohesive customer experience (CX) across different channels, which is only possible by fully understanding channel correlations and cause and effect connectors along the audience’s touchpoints. 

These days, people interact with brands more often than ever before, and so making sense of different interactions is a lot more complicated than it once was.

Recent research by Ascend2 and Research Partners consulted more than a thousand marketers and found that 43% see data integration across different platforms as one of their main goals. In contrast, 37% wish to enrich data quality and completeness.

No wonder executives are investing more and more in their technology stacks: one-third of industry professionals believe it’s essential to have the right technologies for data collection and analysis, according to a study by Digital Doughnut. Currently, 44% of marketers say they already have data management platforms.

But amongst all data platforms available, the Customer Data Platform is undoubtedly the best you can have if your goal is to understand your audience better and drive more sales. We’ll show you why!

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What is CDP? And how does it work?

Customer Data Platform (CDP) is a software that unifies customer data from different data systems and customer-facing platforms. It combines customer’s demographic data, buying history, social media and content preferences, call centers, and customer navigation data. 

Once implemented, the CDP acts as a 360º data solution: it collects, filters integrates, and analyzes customers’ data in real-time. 

CDPs can ingest structured and unstructured data from Customer Relationship Management Systems (CRM)Data Management Platform (DMPs), customer support channels, eCommerce websites and apps, payment systems, social media, etc. They also track behavior across different devices.

By acting as a hub for many data sources, the Customer Data Platform allows marketers to build a holistic view of single customers and their pain points. 

But how exactly do they organize so much data? Well, CDPs rely mostly on first-party data so they can determine the so-called Unified Customer Profiles, which are profiles based on information from real customers and prospects.

That makes the data match consistent across different platforms, and hence the audience insights end up being much more reliable for marketers.

Check out some practical examples of data collected by customer data platforms:

  • Transactional data: order details, customer and product value, renewal dates, abandoned baskets, stage in the conversion funnel
  • Behavioral data from web and mobile: Products and categories browsed, clicks, store visits, interaction data, number of pages visited, etc
  • Profile data: Contact and opt-in data, psychographic data, details about channel and content preferences, lifestyle, etc
  • Brand Relationship Data: Email interactions with customer support, social listening insights, social media comments, etc

The end-to-end role of a Customer Data Platform (CDP)

In today’s competitive landscape, marketing executives are expected to keep track of all customer interactions and connect marketing efforts to other departments, such as sales and customer success, to provide customers with a satisfactory customer experience (CX).

The rush for data management optimization is seen clearly by the CDP industry’s growth in recent years. According to the Customer Data Platform Institute, the number of CDPs available in the market doubled from 2017 to 2018. Now, there are more than 50 CDPs in the industry worldwide.

The truth is that CDP can be an asset for every department within a company, working as an end-to-end solution to enrich customer experience. We’ll soon explore how brands can use CDPs to drive sales, but first, let’s explore CDPs’ overall benefits for companies. 

Breaking Data Silos

CDPs integrate data from multiple departments, which encourages different teams to collaborate and speeds operational routines. With a CDP, marketing, sales, customer experience, and support teams can be on the same page regarding customers’ needs.

Automating marketing workflow

Because they automate a lot of the data integration and analysis, CDPs make the lives of marketing professionals a lot easier, freeing them from repetitive work and allowing them to spend more time in strategic planning. 

Speeding up decision-making

As data processing happens in real-time in the CDP, it also makes it possible for companies to easily spot changes in customer behavior and act upon them while quickly sharing relevant insights with different teams.

The power of CDPs in driving sales

As we pointed out, CDPs are an excellent liaison point for different departments and can be at the heart of customer experience management. But to what extent can CDPs contribute to final sales? 

There are many ways CDPs can directly or indirectly improve conversion rates, drive customer loyalty, and decrease churn and bounce rates. In fact, a report from Forbes Insights highlighted that 44% of organization leaders believe the Customer Data Platform is helping them drive customer loyalty and increase ROI.

We have made a list of 11 ways CDPs can help you drive sales while also better understanding your customer base

1) Know your customers across multiple devices or channels

The mandatory philosophy among marketers is that they should reach their customers on the right channel, at the right moment, and with the right messages and products. To do that, they need to let go of assumptions and understand exactly how users interact with them across different channels and devices.

With all such information concentrated in the CDP, marketers can tailor better experiences and advertising segmentation across devices, increasing campaign success chances

2) Accurately track shopping events

A CDP is a great tool for retailers and eCommerce as it tracks customers’ buying behaviors and relevant transactional data in significant volume. CDPs allow them to keep a consistent record of the products customers added to the cart, the duration of checkout and order completion, abandoned carts, and other information that is crucial for online operations.

3) Improve pricing 

Collecting data from many sources – from your eCommerce website, app, or even physical stores – CDPs help you clarify how much customers are spending and how much they are willing to pay for your products according to their stage in the customer journey, search, and navigation patterns. 

CDPs can also be connected to your supply chain systems to help you adjust costs and manage the relationship with suppliers, which are aspects that often impact pricing. With such information updated in real-time, you can be more assertive in your pricing strategy.

4) Offer personalized discounts and product recommendations

Having a holistic customer profile at hand also allows brands to offer clients personalized discounts and product recommendations that ultimately can turn them into loyal customers.

study by Salesforce shows that 57% of customers are willing to share their data to exchange personalized offers or discounts. In comparison, 52% will share their data in exchange for product recommendations that meet their needs.

While knowing customers in detail, companies’ teams can offer precisely what users need to advance in the sales funnel – whether it is a discount, a free trial, reviews from peers, or a personal approach from the support team.

5) Connect physical and digital shopping experiences

For retailers that also operate offline, a CDP can connect insights from online and offline systems, which is often a challenge for companies looking forward to addressing omnichannel experiences. A survey from the CMO Council found only 7% of respondents said they are always able to deliver real-time, data-driven experiences across physical and digital touchpoints.

With a CDP, brands can offer better customer experience from the website to the physical store – and vice-versa – increasing sales opportunities.

6) Be quick to react to customers interactions

Being quick to answer customer’s signals is also crucial for both customer acquisition and retention strategies. Still, many marketers struggle with the amount of real-time insights they can access and act upon. 

Research published by MediaPost, commissioned by technology consultancy Vanson Bourne, shows that only a minority of marketers feel they can immediately react to online customer interactions. According to the study, only 43% act quickly over customer behavior in the pre-purchase stage, 38% during purchase, and just 35% in the post-purchase phase.

By providing CRM, sales, and marketing teams with a continuous data stream, CDPs can make customer data more actionable. Isn’t that the point of having so much customer data? 

7) Prevent churn and cart abandonment 

Retail managers and online marketers are often investigating why customers abandon carts or churn after a few purchases. A CDP can give you deep insights into what stands in the way between your customers and the checkout.  

It helps you spot gaps throughout the entire customer journey (and not just in specific channels) that might be leading customers to give up purchases. Are there problems with website usability? Is your customer support too slow? 

By figuring out what is wrong, your team can work on fixing these gaps and segmenting churn prevention campaigns to attract customers back. 

8) Optimize Customer Acquisition Costs (CAC) and Conversion Rates

The McKinsey Global Institute estimates that data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable. 

With the Customer Data Platform’s assertiveness, companies can better streamline marketing segmentation and customer success efforts, thus optimizing results related to Conversion Rates (CR), Customer Acquisition Costs (CAC), and Customer Lifetime Value.

9) Qualify your leads

One of the best aspects of CDP for sales is that it allows you to qualify your leads better and nurture the relationship with customers across their entire lifecycle. Not only it supports marketers in optimizing strategies to attract qualified customers; it also gives you the necessary information to engage with customers who are ready to buy. 

A study by Forbes shows, for instance, that 53% of marketing executives are using CDPs to engage with existing customers’ needs, increasing the likelihood that they will become recurring clients and the chances of upselling them. 

10) Enhance predictive marketing

Predicting customer behavior and preferences are what helps giant retailers like Amazon to drive sales. This marketing technique, which determines the probability of success of different marketing strategies, is essentially fueled by high volumes of customer data, which only a CDP could support. 

Armed with a CDP, data scientists and marketing analysts can gather data from several sources and apply predictive models with a great accuracy level.

11) Improve attribution models

With so many touchpoints with the audience, it is often difficult for companies to determine accurate attribution models and discover which channels drive more sales. According to Google, almost 80% of all transaction value involves at least two marketing channel interactions – a number that can be much higher depending on your business’s complexity.

The Customer Data Platform can optimize the attribution framework since marketers can send attribution data to the CDP and have a more accurate view of campaign performance.

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Why CDPs are more complete than other data management platforms

So you have learned the many benefits that CDPs can bring to the table. Many leaders still ask themselves if they should ditch their existing data management tools for a CDP. What has to be clear for marketers and sales managers is that different data platforms don’t need to exclude each other. 

A Customer Data Platform can potentialize the outcomes of Customer Relationship Management (CRM) software and Data Management Platforms (DMPs).

In a survey by The Relevancy Group conducted in 2018 with US executive marketers, about 6 in 10 respondents said they were integrating CRM data into their CDP. 

From a digital advertising perspective, CDPs can make the work of Data Management Platforms a lot more precise as well – with at least 29% of marketers feeding CDPs with digital advertising response data.

Although CDPs, DMPs, and CRM systems share some similarities, they all have different purposes within a company, with CDP serving as a primary data hub to make your teams more confident in responding to customers’ needs. 

Want to become an expert in CDP?

If you plan to purchase a CDP for your company, the next step is to check out the platforms available in the market and consider which one is the best fit for your business goals.

If you feel like it is time to learn more about CDPs, we invite you to download our eBook Customer Data Platform: the future of marketing and sales.

The eBook will give you details about CDPs’ features, how they work, and how they can be incorporated into your marketing and sales strategies. We hope you enjoy it!

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

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.

An essential guide to Customer Data

Customer data is the key to understand customers beyond the confines of your own strategy, which makes you avoid dangerous assumptions to create relevant products and experiences.

Continuously data analysis will help you to come up with strategies that cover the market’s lacking points and elevate your marketing to a more meaningful approach. 

We are witnessing a new customer era. Every company’s engines work daily to think, develop, and incorporate business and marketing strategies that put customers at the center of everything they do. 

This new approach does not strike the market as a surprise. For the past years, with so much information in the palm of their hands, customers became more demanding and more willing to connect with brands that make proper use of their information to deliver more than just basic products and services.

If you have been paying attention, you already know customers value experiences more than anything else these days. This means true engagement will only be achieved by a remarkable customer experience that elevates your brand and creates a sense of connection with your audience. However, planning an exceptional customer experience takes a wide understanding and a sharp knowledge of how to solve consumers’ issues.  

That is why customer data is definitely here to stay.

What is customer data and why does it matter?

Customer data is all the information a company gets from consumers whenever they interact with it. Whether it is personal, psychological, or demographic, customer data help companies clarify facts and avoid assumptions when thinking and refining business strategies related to customer experience.

The importance of customer data is related to the incessant need to build a strong customer understanding. Many organizations have already noticed that, by using data as a pillar, their operations draw near customer satisfaction and proper marketing approaches that return investments and reduces waste. On the other hand, without concise information about their customer base, companies fail to engage their audience and make sense of the many market opportunities datasets provide. 

Customer experiences are tremendously affected by customer data, which means the right data extraction, validation and analysis are crucial to generate accurate outcomes that will enhance marketing and business plans. Customer data matters so many companies have embarked on customer data management (CDM) to correctly address data in their goals and daily work.

With trustworthy data at the palm of your hand, you will feel more confident in tactics to contact, acquire, and retain your customers, keeping their interest, and offering them exceptional engaging interactions. Customer data will also support your financial decisions, assisting you in where and when to allocate your budget.

How is customer data created?

As you read, a massive amount of data is being created. All around the world, people are navigating desktop and mobile devices. It doesn’t matter if they are shopping, replying to an online survey, or filling a lead form to get in touch with a software development company. Each of their digital interactions with brands creates data — which continuously provides the basis for algorithms to produce more data.

According to Deloitte in its Global Marketing Trends 2020 report, 90% of all global data were produced in the last two years, considering more than 26 billion smart devices circulating the globe.

Aware of data potential, the market has amended digital initiatives to maximize data collection, extraction, and validation methods. Big data analytics have been embedded to extract useful information from huge datasets, such as CRMs, that can’t be manually validated. Simultaneously, data scientists have been growing as popular as the need to adopt a data-driven culture

These market signs alone are an extremely important indication that data is everywhere, and companies that don’t welcome it proactively will be in a tight spot.

Types of Customer Data

Customer data is separated into four main categories. In their own way, these categories will help you enhance the customer experience in different and empowering perspectives. 

Personal data

Also known as identity and basic data, this type of information allows customers to be recognized by individual details and is divided into linked and linkable information.

Every information that can be used to identify a person without extra details is linked personal data — full names and emails, for example. Date of birth, physical address, and phone numbers are linked personal data too.

Now, linkable information doesn’t identify on its own. Still, when combined with other pieces of information, it is useful to draw a bigger picture. ZIP codes, age, gender, job titles, education level, marital status, and number of children are examples of linkable personal data.

Interaction data 

If you ever wondered how your customers behave on your website, or how they interact with your emails and your social media accounts, interaction data will answer all of your questions.

Sometimes known as engagement data, interaction data brings a meaningful and solid viewpoint of how customers interact with your brand’s touchpoints. 

Examples of interaction data are: Time spent on your website, page views, social media engagement, traffic sources, customer service feedback, and paid ad conversions.

Behavioral data

If you want to know how customers respond to experiences with your products and services, pay attention to behavioral data. 

This type of data assists you to have a deeper understanding of behavior patterns your customers have throughout the purchase journey. This means interaction data may or not be considered behavioral data — it depends on the big picture and the goals you wish to achieve.

Some examples of behavioral information you can track are: Previous purchases, website heat-maps, customer loyalty program usage, repeated actions related to your products, and CTAs clicked. 

Attitudinal data

The fourth and last type of customer data is related to how consumers perceive your brand. Unlike metrics you can easily measure, such as product purchases, click rates, website visits, and social network interactions, attitudinal data refers to emotions and individual opinions. It embraces feelings, which makes them highly subjective — that explains why this type of data is also referred to as qualitative data. 

Continuously mining through attitudinal data will get you closer to proactively responding to consumers’ issues and anticipating trends they might be interested in. This is the perfect chance to get to know your consumers’ individual preferences and their point of view towards topics that interest you.

Attitudinal data examples are: Customer lifestyle, motivations, pain points, sentiments, and desirability. Customer reviews are excellent to gauge this sort of information.

Collecting customer data

As we have already emphasized, digital transformation has made every channel a powerful source of customer data. If your customers are interacting with your marketing and shopping channels, you can easily extract customer data from them using Customer Data Platforms (CDP).

There are several ways to collect customer data from distinct data points, and they depend on your goals.

That being said, before jumping to conclusions on which channel is the best to collect data from, make sure you address your data goals first. Is it to accelerate revenue? Develop new products? Get a more precise understanding if you ought to invest in a new marketing campaign? Start with the why, and then move forward.

More than predicting upcoming trends, recall that customer data should be highly attached to things that happened in the past. Past customer sales, buying decision patterns, abandonment rates (and much more) can be extracted from customer data to develop better strategies that respond directly to what your consumers did and said months, weeks, and days ago.

We have compiled some collecting data options ahead.

1. Website Analytics

Web analytics reports are excellent to understand what is resonating with your audience and how they are talking back to you. 

When investigating this type of report, remember behavioral data insights can be extracted from heat-maps, bounce rate, page views, and even the devices your target market uses the most.

2. Social media engagement

Social media-based data can tell you a lot of things. Shares, likes, and comments on social media are basic engaging metrics you can measure to understand what customers think about your brand and what type of message they enjoy. You will likely get a good amount of data from social media analytics to make sense of customers’ sentiment towards you.

We highly recommend you to go even further and run social listening while analyzing social media insights. This will guarantee you interpret your customers’ interactions more accurately.

3. Customer interviews and feedback surveys

Feedback is crucial. Whether customers love what you’re doing or criticize it, you need to be available to take their considerations and opinions into account.

When done right, customer interviews, and feedback surveys will gather your audience’s interests, opinions, preferences, and how you can improve your products and services to serve them better.

Another data collection suggestion is to investigate customer churn. This explains the reason why some customers buy from you for a while and then leave. What affected their experience so they felt like not coming back? Is there anything you can do to improve this experience and avoid other customers from turning their backs on you?

If you’re looking for ways to extract behavioral and attitudinal data, consider searching for customer feedback and combine this information with other data to get a bigger picture.

4. Contact information 

Contact information is vital to customer data. If you wish to communicate with your consumers, you should know where to find them according to the stage of their journey.

From phones to physical addresses and social media, contact information is needed to build a good amount of personal data you can rely on.

5. Customer service

Customer service is related to feedback but contains high potential itself. It is critical to allow customers to reach out to customer service software enabled to bring useful data your way. 

As a consequence, customers can quickly seek help for big and small issues and solve their problems more easily all while providing you with more information.

Validating customer data

As vital as it is, customer data is useful when you are ready to properly extract and validate it. This means you need to find actual helpful information from your data sources, and pull them out to understand how valuable they are. This is what we call data extraction — and it will prevent you from swimming in a random sea of data.

Data extraction uses the right tools to streamline data from customer experience to marketing, and makes sure the information provided is useful for your teams to make better decisions.

To avoid wasting all the money, time, and effort you put into collecting data, there are some essential considerations about customer data validation you should pay attention to:

  1. Customer data must be a source of truth and facts about your audience: Above all things, remember customer data is supposed to assist you in using factual information to come up with fitting solutions. For this reason, the data you extract must be reliable and revolve around your clients. If the data you’re extracting isn’t customer-centric, you better reconsider why it is important.
  1. Customer data must be goal-oriented: Exploring multi-channels to extract data from without a clear goal in mind might lead you to conclusions that don’t make much sense. Make sure you know what your goals are from the beginning and set milestones to measure your progress. This will help you visualize how much data is affecting your operations and what else can be done.
  1. Customer data must be integrated: Thanks to technology, data can now be transferred from one channel to another in a matter of seconds — and that is essential to every company that needs fresh information to anticipate opportunities and maximize their potential. By using customer data integration (CDI) tools, you ensure information gets to the right people and set a pattern to collect, organize, unify, and visualize customer data wholesomely. Best of all, CDI automates these processes and cuts down routines that take time. This means your human resources will have more time to focus on what they’re good at: Finding perfect responses to all the data software and algorithms have extracted and assembled for you.
  1. Customer data must be contextualized: In-house data, also known as first-party data, should be combined with external data to give the information you’re putting your hands in a more precise context. There are two types of external data you can blend with your in-house insights to ensure a broader understanding: second party data and third party data. The second party data is the information provided by another company towards the audience that interests you — this type of data is usually shared between partners. In the meantime, third party data is collected by companies that don’t have a link to customers and sell information to other organizations. These data types can enrich your first-party data and elevate your insights.

Customer Data Analysis

Customer data analysis is crucial to any customer data strategy. Wrong data analysis might cause disconnected and poor responses from brands to erupt and bother customers with interactions they don’t need nor asked for.

As complex as it might sound to gather validated data to be analyzed, some special technologies can help the process be smoother and more efficient. Data mining is one of them. By mixing machine learning, statistics, and artificial intelligence (AI), data mining can analyze loads of data using sharp techniques —and the greatest thing about it is that its analysis is automatic.

Analyzing quantitative data

When it comes to quantitative data, you might come across the need to categorize it according to some classifications and segmentations. Or, perhaps, you will notice it is necessary to relate different data points and comprehend how specific characteristics affect the customer experience. Luckily, data mining provides many programmatic settings that can be adjusted to return the insights you are looking for. 

If you’re willing to fragment customers to create more dynamic and creative ads, customer data analysis will help you find segmentation opportunities. If your team needs to associate behavioral patterns to develop a new campaign, customer data analysis will gather helpful information to predict how people will respond to your strategy. The opportunities are countless.

Analyzing qualitative data

On the other side, when we talk about qualitative data, many companies face the challenge of making sense of subjective information, such as sentiment. People’s emotions and feelings vary individually, and being stuck in the middle of so many variations is an uncertain place for your company to be at. If you’re wondering how to absorb valuable insights from this context, we have good news for you: there are ways technology can track important keywords to translate qualitative data into actionable decisions.

When analyzing qualitative data, pay attention to patterns that might make the situation clearer. Are your customers using the same keywords when they give feedback? Are the stories they tell somehow similar? Are there common elements in the ideas they communicate that can help you create a further sense of how they feel about your brand?

Take advantage of what customers say to you in feedback interviews, surveys, and methods of the sort, to gather enough data and take action. 

Benefits of Customer Data Analysis

Relying on customer data will benefit you in countless ways. To help you understand how, we’ve listed some benefits in-detail right ahead:

1. Segmentation

Segmenting your customers is a smart way to get a broader view of what their issues are and how you can reach out to them more effectively. Separating them by age, demographics, gender, job title, and more makes it easier to plan specific marketing campaigns that will straightforwardly attract them, whether your goal is to attract them, engage them or make them buy more.

2. Personalization

People no longer wish to be contacted with general messages that lack a personal touch. Customer experience is a synonym of personalization and, if you don’t use data-based strategies to customize interactions with your consumers, it is highly likely that they will get frustrated by irrelevant content and mass communication. In contrast, personalization increases service quality and customer satisfaction.

3. Deeper audience understanding

Data is becoming the centerpiece of companies that desire is to remain relevant in customers’ minds. This happens because, without a detailed and precise understanding of their audience, companies will hardly add value to their customer base. 

Customer data is the key to understand customers beyond the confines of your own strategy, which makes you avoid dangerous assumptions to create relevant products and experiences. Continuously data analysis will help you to come up with solutions around creative, data, and media — the right combination to empower your marketing and business approaches.

4. Revenue

When used correctly, customer data helps you understand how to increase your consumers’ loyalty and lifetime value, reducing churn at the same time. It also gives you a better understanding of where to invest in valuable campaigns and trends that will bring you more ROI.

5. Humanization

Human connection isn’t just another trend. The fact customers need to embrace companies with a purpose is changing their relationships with brands. People don’t want to be treated as a transaction. On the contrary, they expect companies to act authentically and be transparent in what they believe in, treating them individually. Pulling the right customer data contributes to humanize your brand so it corresponds to these expectations. It also frees your team to have more time to focus on how to genuinely engage customers. 

Data-base your decisions

Now that you’ve come to the end of this article, you know there isn’t space for assumptions to guide your brand’s decisions anymore. More than ever, new ideas and improvements need to connect with customers’ expectations. In this context, embracing the right technologies to collect, extract, validate, and analyze data is crucial. 

To find out more advantages that the use of Customer Data can provide for your company, contact one of our consultants, and resolve any doubts on the subject.

Customer Data Platforms vs. Data Management Platforms: Definitive Guide

Customer Data Platforms (CDPs) and Data Management Platforms (DMPs) might look similar, but each plays a different role in marketing. In this post, you will learn their main differences and applications. 

Connecting the dots between your customers and the dozens of touchpoints with your brand is not an easy assignment. There are multiple roads that lead customers to your channels, and, in the best scenario, to buying your products.

If you were to map the physical and digital interactions that guide your customer through the conversion funnel, you would probably find ad pieces, search queries, social media and proprietary content channels, interactions with customer support, and so on.

With so many channels in mind, your team has to make sure your brand’s message is unified across all of them.  You want the path to your content and your products to be as seamless as it can be, right? In order to do that, you need good tools for customer data management.

A report from research company Forrester found that data-driven businesses grow on average 30% more yearly than those ones that don’t systematically harness data within the organization. Data-driven companies are also expected to drive $1.8 trillion by 2021.

Historically, companies have relied on Data Management Platforms (DMPs) and Customer Relationship Management systems (CRM) to gather insights, and shape marketing campaigns, and content strategies.

But what if you could complement these tools and engage your customers with even more compelling and personalized messages? That is possible with the emergence of Customer Data Platforms (CDPs), a prominent type of data management system.

In this guide, we will explain exactly how Data Management Platforms and Customer Data Platforms work, their differences, and similarities, and how you can use each of them to leverage data-driven marketing in your organization.

Integrating Customer Data Platforms and Data Management Platforms is crucial for your marketing strategy

Customer Data Platforms (CDP): Definition and Examples

A Customer Data Platform (CDP) is software capable of unifying customer data from different data systems and customer-facing platforms. It gathers quantitative and qualitative information from several touchpoints with customers, regardless of whether they are recurring customers, new customers, or prospects.

Customer Data Platforms collect all sorts of data in a granular way, combining customer’s demographic data, buying history, social media preferences, call centers, and navigation data.

Basically, CDPs cross data from CRM systems, DMPs, customer support channels, payment methods, social media interactions, and different devices, allowing marketers to build a holistic view of customers and their pain points.

They also gather behavioral information, such as customer’s lifestyles and hobbies, transactional data from the company’s web site, mobile apps, advertising channels, social listening, and email marketing tools.

Here are specific examples of data collected by customer data platforms:

  • Transactional and order data: Exact purchases, renewal dates, customer and product value, abandoned baskets, and stage in the conversion funnel.
  • Behavioral data from web and mobile: Products and categories browsed, clicks, store visits, interaction data, and number of pages visited.
  • Profile data: Contacts and opt-in data and psychographic data points, like details about lifestyle, context, content, and channel preferences.

As marketing executives are expected to keep track of all customer interactions, another great news is those customer data platforms makes its unified customer database accessible to other systems – and even other departments. Wouldn’t it be great to connect marketing, sales, and customer success data, for example?

Unified customer profiles

You might still be wondering how exactly CDPs can capture so much data. That happens because the software facilitates customer data integration, filtering the data through algorithms to determine unified customer profiles.

These profiles are based on navigation patterns from your real customers and prospects, because they are mostly based on first-party data – Personal Identified Information (PII) that comes from customers navigating your own channels.

Such accurate profiles make it a lot easier for marketers to build personas and segment campaigns. Since the data match is consistent across different platforms, CDP is known for offering deterministic matching.

As the processing of data happens in real-time, CDPs also make it possible for you to quickly spot changes in customer behavior.

Data Management Platforms (DMP): Definitions and Use Cases

While leading marketing at a large organization, the least you should have is a data management platform to orchestrate your digital marketing efforts. The Data Management Platform (DMP) market size is expected to drive $3 billion a year by 2023, with a Compound Annual Growth Rate (CAGR) of 15% between 2017 and 2023.

If you are still not familiar with Data Management Platforms, it’s time to get acquainted with them. DMPs are intelligent data warehouses that are majorly used to drive customer segmentation and retargeting campaigns. 

Their main objective is to increase audience engagement and make your ad targeting more effective. A DMP will monitor campaign strategies, identify conversion points and personalize campaigns according to them.

Segmentation on the Data Management Platform (DMP) can be done according to different data types, sources, end-users, and geolocalization.

These platforms focus on third-party, anonymized data collected through navigation cookies; device IDs, and IP addresses. Since the information captured is anonymous, DMPs automatically select data for marketing campaigns based on a process called probabilistic matching or lookalike modeling  – when the system finds customers that are more likely to match your target audience by having similar qualities and behavior.

Here are a few specific examples of data collected by Data Management Platforms:

  • Web and app data: General information about customers who visit your website and app, like age, gender, location, browsing, and purchasing history.
  • Data from second and third-party sources: Anonymous data from partner sites and apps and databases bought from other providers.
  • Data from first-party systems: Sometimes, DMPs can include valuable, but highly sensitive information like customer’s name, address, email address.
  • Data from advertising campaigns: Visualization and navigation data related to search-engine-optimization (SEO) marketing and display advertising campaigns.

The methods for data collection through DMPs also may vary by vendor and industry, but generally, the system gathers information via JavaScript tags, server-to-server integration, and an application programming interface (API).

If a major publisher wants to send its website data to its DMP, for instance, it can use tags. An e-commerce platform, on the other hand, might choose to send data from marketing automation tools.

CDPs vs. DMPs: Key Differences Explained

If you are just starting to dive into marketing data solutions, it is almost inevitable to mistake DMPs for CDPs. Although they share some similarities, they show far more differences when it comes to managing data. The CDP Institute, a platform-agnostic organization in the realm of data platforms, uses a simple quote to explain the distinction between CDPs vs. DMPs. They describe:

CDPs work with both anonymous and known individuals, storing personally identifiable information’ (PII) such as names, postal addresses, email addresses, and phone numbers, while DMPs work almost exclusively with anonymous entities such as cookies, devices, and IP addresses”.

Yes, the main distinction between DMPs and CDPs is about the type of data they rely on. However, other important data platform differences impact how they are used. Let’s explore them in detail.

Types of Data

As the CDP Institute describes, the greatest difference between CDPs and DMPs lies in their use of Personally Identifiable Information (PII) – or data related to customers’ identity. In marketing terms, a PII is a combination of data used to identify a specific customer.

The logic behind CDPs is that you’ll be targeting individuals: the more data you collect about a single customer, the better will be the experience your brand will provide to him, specifically.  It can help you analyze if the user can be converted to a customer or understand content affinity based on the customer’s inclination to visit articles, for instance.

DMPs, on the other hand, rely on anonymous data – from cookies, devices, and IP addresses –  in hopes to reach customers who match their target profiles. DMPs are useful in capturing generic data, such as noting when a particular user visited a website and how long they spent on the page.

Data Retention

Another major difference between customer data platforms and data management platforms has to do with how long they store data.  CDPs are based on historical records, which means you can store customer data for how long you think it will be useful. You could choose to maintain customers’ records for a long period to build in-depth, accurate customer profiles and nurture relationships. Or, you could set a time limit for it, but having a long record about customers make it easier for you to analyze their lifetime value, for instance.

DMPs, however, store data for shorter periods of time, usually up to 90 days (a cookie’s lifespan)  to target ads and build lookalike audiences.  That’s not always good because it prevents marketers from having the bigger picture of the customer data over time.

Use Cases

Customer Data Platforms are used to gather customer data in their organic form and deploy insights to other marketing platforms. Marketers can use CDPs to coordinate different marketing strategies across different devices and channels. Beyond advertising, CDPs can be used to leverage the integration of marketing teams with other areas, from sales to customer experience (CX). In this post, you can check 20 ways CDPs can be used in marketing.

DMPs, on the other hand, are often constrained to digital advertising activities. They help marketers coordinate campaign optimization, audience modeling, cross-channel segmentation, and retargeting.

Data updates

In CDPs, database updates happen in real-time, while DPMs only allow scheduled database updates. It doesn’t mean that one model is better than the other, once the way you access and activate data will depend on your strategy.

Marketers can lean on CDPs for ongoing marketing efforts with single customers while relying on DMPs to potentialize specific campaigns and track their performance periodically.

What DMPs and CDPs Have in Common?

CDPs and DMPs do not necessarily replace one another. CDPs, specifically, can act as a complementary asset for DMPs. That means that the data gathered by CDPs can be enriched for better segmentation in DMPs, creating better lookalike audience segments. Therefore, you could choose either one or both of these platforms according to your marketing needs.

Generally, DMPs and CDPs will work side by side with customer relationship management systems (CRMs), which store data based on historical and general information such as contact, demographics, and notes about customers made by CRM teams.

Now, to set a common ground between DMPs and CDPs, we made a list of the assets they have in common.

  • Both CDPs and DMPs aim to establish a Single Customer View (SCV) or a 360-degree view to help businesses understand their customers.
  • Both platforms use data for audience activation and for delivering personalized user experiences.
  • Both platforms offer reporting, analysis, and optimization tools

3 Reasons Why a Customer Data Platform (CDP) is the Best Choice for Marketers

While different management platforms are always welcome, many marketers are turning their attention to Customer Data Platforms. Despite the growth of data and spend on marketing technology, many CMOs still struggle to demonstrate the revenue impact of their marketing activities on the business.

In this scenario, CPD emerges as a promising tool to centralize valuable insights, automate marketing integrations, and track performance precisely. A study by Forbes shows that 53% of marketing executives are using CDPs to engage with customer’s needs.

To finish this guide, we made a list of 3 ways your marketing team could benefit from a CDP:

1. Accurate personalization

In this day and age, not having a CDP can actually result in a poor experience for your customers. You can’t take the risk of making wrongful recommendations or serve ads that are not relevant within the user’s journey. Because it breaks data silos in organizations, CDPs are generally more effective than DMPs in attracting qualified leads, optimizing marketing budget, and reducing customers’ acquisition costs (CAC).

A CDP allows you to acknowledge what products customers show interest in lately,  as well as their purchase intent and how likely they are to churn.  You can also find out their favorite interaction channels and stages in the customer journey. From there, you can come up with predictive models and improve content strategies for every channel.

2. Better data quality

The focus of marketing leaders is also shifting from third-party data and anonymous data to first-party, single-customer data, which also addresses CDPs’ importance. As data privacy and compliance regulations become more consolidated, organizations increasingly seek to work with their own, integrated data.

3. Integration to other software

CDPs can be integrated into different touchpoints called “delivery platforms” or “engagement platforms”. These can be, for instance, your company’s email marketing or marketing automation software, website, or social media management platform.

Delivery systems interact with the platform to send out messages and collect engagement data that will feedback into the system. These integrations enable the planning of campaigns and the set of messages.

Next Steps

We know that there are many data management solutions in the market. But now that you have learned a bit more about DMPs and CDPs applications, maybe it’s worth strengthening your marketing data solutions.

We recommend you check out Arena’s customer data platform blog section to learn more about the potential of CDPs. You can also click here to get in touch with one of Arena’s consultants and learn the specifics of our CDP.