Tag Archives: personalization

Get More Customers With A Retarget Customer Data Platform

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

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

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

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

Gathering Your First-Party Data For Retargeting

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

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

4 Marketing Opportunities To Gather And Use First Party Data 

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

1) Offer Online Experiences To Potential Customers

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

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

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

E-Commerce Business Use Case

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

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

2) Create Campaigns For Your Current Customers 

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

B2B Enterprise Use Case

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

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

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

3) Get Better Lookalike Audiences

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

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

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

Individual Audience Factors

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

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

B2B Audience Factors

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

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

Is Your Audience Segment Too Large?

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

4) Lapsed Customer Engagement

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

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

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

The Final Ingredient To Successful Retargeting: Leverage Market Awareness

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

1) Top of Funnel

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

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

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

2) Middle of Funnel

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

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

3) Bottom of Funnel

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

Use Arena Personas To Get More of The Right Data

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

How to use CDP to improve your conversion rates

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Customer Data Platforms can fuel your marketing efforts, help you improve customer experience, and maximize ROI. This post will teach you how to embrace CDPs on daily marketing activities to potentialize results.

Marketing leaders’ job has become more challenging year after year with the rise of new content channels, connected devices, and sales formats. In a competitive scenario, acquiring and retaining requires more than just a good strategy. We live in the age of tailor-made communication, where there is no room for basic and generic marketing anymore.

No wonder companies from all segments have searched for ways to make their marketing approach more personal and cost-effective at the same time, which requires the right tools and best practices for data management. 

A report from the CMO Council shows that marketers worldwide see the execution of a data-driven strategy as their primary challenge to have a unified view of customer experience (CX) across different touchpoints, according to 38% of marketers consulted for the study. 

According to 30% of respondents, another challenge is to abandon customer data silos, which make data inaccessible across the organization. Even though marketers can count on CRM and DMP platforms to understand some of the customers’ engagement and pain points, the problems above can only be truly solved through robust data management platforms. 

In that sense, digitally mature marketers have specifically reached out to Customer Data Platforms (CDPs) in order to understand customers better and offer them a better customer experience.

Ultimately, a CDP can boost brands’ ROI and help them maximize conversion rates. This post will explore the concept of CDP, how it differs from other data platforms, and how marketers can use them to improve their results. 

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What is CDP?

A Customer Data Platform (CDP) is software that centralizes customer data from different data systems and customer-facing platforms. It collects quantitative and qualitative information from diverse touchpoints with customers, offering a friendly interface that allows companies to access customer data from different departments easily. 

Customer Data Platforms combine customers’ demographic data, buying history, hobbies, transactional data, social media preferences, interactions with call centers, navigation data, and more. 

They work mostly with first-party data, crossing information from Customer Relationship Management (CRM) systems, Data Management Platforms (DMPs), and customers’ direct interactions with your brand through support channels, payment methods, social media, and different devices. 

The idea is to combine Personally Identifiable Information (PII) and build a unified view of individual customers – also called Unified Customer Profiles. Since the data match is consistent across different platforms, data is even more reliable than other platforms. 

A few examples of data collected by CDPs:

  • Purchases
  • Renewal dates
  • Customer and product value
  • Abandoned baskets
  • Stage in the conversion funnel
  • Products and categories searched and browsed
  • Store and website visits
  • Content and channel preferences
  • Social media interactions
  • Customer support interactions
  • Email opening rates
  • Lifestyle preferences
  • Contact information

These are just a few examples. The possibilities are endless! In reality, your company can choose to plug in any data system to the CDP. All data can then be stitched to the unique customer profile, allowing marketing teams to work on segmentation and personalization.

Typically, CDPs are used with five purposes in mind:

  1. Improving customer identity resolution
  2. Data cleansing and enrichment
  3. Data Centralization and integration
  4. Audience data analytics
  5. Marketing segmentation and optimization

CDP vs. CRM vs. DMP: beware of the difference

The marketing industry has long relied on acronyms to refer to metrics and tools. The data management realm is specifically pervaded by similar acronyms that comprehend entirely different things, such as CDP, DMP, and CRM.

Most marketers will agree that it is essential to manage data through one of these: Data Management Platforms (DMP), Customer Data Platforms (CDP), and Customer Relationship Management (CRM). However, not all of them might understand how each of them works.

All three platforms share a list of common assets: they aim to establish a Single Customer View (SCV), use data for audience activation, and offer reporting, analysis, and optimization tools. Such platforms will often work side-by-side, but CDPs, DMPs, and CRM show many differences despite their similarities.

We have already explained how CDPs work, now let’s explore how DMPs and CRM systems compare.

Data Management Platforms

The DMP is mainly used to drive advertising campaigns, relying almost exclusively on anonymous data from cookies, devices, and IP addresses. It captures generic data such as when users visited your website and how long they spent on the page.

Then, such navigation information is used to target ads according to customer behavior to reach customers who match the brand’s target profiles – a process called probabilistic matching. A DMP can monitor campaign strategies, identify conversion points and personalize campaigns according to them. 

Main differences with CDP

  • CDPs work with both anonymous and known individuals, while DMPs work almost exclusively with anonymous entities and unknown customers
  • In CDPs, database updates happen in real-time, while DPMs only allow scheduled database updates
  • CDPs are based on historical integrated customer records, which means you can store customer data for however long. DMPs, however, store data for shorter periods, usually up to 90 days (a cookie’s lifespan) to target ads and build lookalike audiences
  • DMPs are used only for managing digital advertising, while CDPs can be used across an entire organization, including for sales and customer success

Customer Relationship Management

CRM systems are typically used by sales teams, storing personal information from known customers – such as contacts, demographics, transaction data, notes about customers made by sales, CRM, and customer success teams. 

Softwares alike are used to track leads, understand the sales pipeline, and for driving customer engagement. CRMs don’t store anonymous user behavior.

Mains differences with CDPs

  • CRMs aren’t built to ingest large volumes of data from different sources, like CDPs
  • CRMs only analyze personal data from known customers, such as name, age, and contacts, but not navigation behavior – something tracked by CDPs
  • CRMs do not connect customers’ actions through different channels and devices, and so is not able to follow the customer journey like a CDP

Using CDPs to improve marketing ROI

Successful marketing campaigns don’t embrace just a few channels, but a complex constellation of touchpoints with your audience. Acting over this constellation, however, can sometimes be challenging. A survey from the Harvard Business Review shows that only 3% of marketers believe they are able to act on all of the customer data they collect. Another 21% say they can act on very little of it. 

As we discussed earlier, CDPs can play a significant role in connecting customers’ fragmented journey. But beyond that, they can help you make smarter investment decisions, improve ROI, conversion rates, and Customer Acquisition Costs (CAC). 

Also, CDPs can automate and eliminate repetitive, time-consuming tasks from marketing professionals’ routines, making daily marketing activities more agile.

A few ways a CDP can improve business results:

Accurate personalization

In the age of recommendation algorithms, customers expect personalized experiences everywhere. Marketers should avoid at all costs making wrongful recommendations or serve ads that are not relevant within the user’s journey. 

Because CDPs break data silos and integrate marketing efforts across different channels, they help brands to deliver the right messages, at the right time and in the right channels for customers. For instance, you could exclude users that recently bought your products or those who are not likely to engage with your ad campaigns from your targeting strategy, focusing on users who are likely to engage.

Better budget allocation equals better leads

CDPs allow brands to acknowledge what products customers show interest in, their purchase intent, and how likely they are to churn. They can also find out their favorite interaction channels and stage in the customer journey. From there, it gets easier to allocate ad dollars and improve content strategies on every channel.

As a result, CDPs help attract more qualified leads, optimize marketing budgets, reduce customers’ acquisition costs (CAC), and improve conversion rates.

More qualified data

Marketing leaders are shifting their attention from second and third-party data to first-party data. As privacy and compliance regulations become more consolidated, organizations increasingly seek to work with their own, integrated data – something Customer Data Platforms can help them with.

Driving data-driven sales

Customer Data Platforms can help sales teams upsell or cross-sell products based on customers’ recent purchases or search intent. By having access to enriched, accurate data, salespeople can better design retargeting and churn prevention campaigns through email, mobile, and other channels.

More autonomy and agility to marketing professionals

Depending on other departments for reports and insights can be time-consuming and unproductive for marketing teams, since not everyone is on the same page about marketing needs. CDPs are useful to many areas within a company, but every team can shape their use according to specific goals while having access to all kinds of company data. 

According to CMO Council, 67% of marketers believe speed is one of the primary benefits of data-driven marketing, resulting in quickly executing their campaigns. Through CDPs, teams can scale marketing efforts and get new processes started faster. 

Benefits from CDPs don’t stop there. In this post, you can check 20 ways CDPs can be used in marketing.

Integrations and key assets of CDPs

In a fragmented media and advertising landscape, marketers want tools to give them more control over events in their channels. CDPs allow companies to integrate different systems and deploy data with customers’ profiles to many marketing and customer relationship platforms. 

Most Customer Data Platforms typically offer connector marketplaces where marketers can set up integrations in just a few minutes. However, the depth and amount of possible integrations can vary according to the CDP you choose.

Areas of integration offered by CDPs usually include: 

  • Advertising: Integrations to DSPs, Facebook Ads Manager, Google Marketing Platform, and more
  • Analytics and AB Testing platforms: Google Analytics, Adobe Analytics, Optimizely, MixPannel, etc
  • Email and marketing automation tools: MailChimp, Hubspot, Sendgrid, Salesforce Marketing Cloud, SMS tools, and others

When connected to other systems, CDPs can deploy customers’ profiles to marketing tools (also called delivery platforms), enabling the planning and distribution of campaigns and personalized messages.

The amount of tools companies will connect to their CDPs will depend on the specifics of their business. Large businesses are likely to connect more tools than small companies, for instance.

Before adopting a CDP, be prepared

Yes, a Customer Data Platform can do wonders for your marketing strategy, but you need to feed it for it to work properly. CDPs won’t effectively integrate customer touch points if they can’t truly access data about the whole customer’s journey.

If you want a seamless, functioning CDP, it has to be fueled with multiple data records from clients – not just a few sources. A Customer Data Platform should gather historical data and freshly-collected data about their interactions with your brand. 

That’s how it can create a satisfactory customer profile and identity resolution (when the system matches records from different data sources and connects them to single customers). But why do you need identity resolution?

A customer might interact with your brand through several channels and devices, but sometimes CDPs will interpret different data points as if belonging to other customers.

So, not having enough data or having insufficient data prevents you from having the perfect picture of single customers, resulting in wasted investments, bad customer experience (CX), and poor marketing results.

In a nutshell: the more data sources your CDP can gather, the better. If your company only provides a few data points, your unified customer view might not be so complete, resulting in gaps in customer experience and poor conversion and engagement results. 

Want to learn more about CDPs?

As we have seen, Customer Data Platforms are complex, and so is the process of choosing the best one for your company.

If you want to dig deeper into the benefits of CDPs for marketing, we recommend downloading Arena’s “Customer Data Platform 2022” ebook. In this complete ebook, you will find more valuable information about how CDPs work and how they can be incorporated through every step of marketing.

If you want to learn the specifics about Arena’s CDP, feel free to reach out to one of our consultants.

Customer Data Platforms vs. Data Management Platforms: Definitive Guide

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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.

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

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

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

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

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

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

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

In this article, you’ll find out:

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

With that in mind, let’s move forward.

What is data-driven marketing?

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

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

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

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

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

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

Data-driven marketing benefits 

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

Segmentation

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

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

Customer acquisition

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

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

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

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

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

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

Revenue

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

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

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

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

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

Upgrade your marketing strategy

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

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

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

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

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

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

Impacts on customer experience

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

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

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

Personalize customer interactions 

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

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

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

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

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

Improve products and services

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

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

Ask for feedback 

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

Predict customer trends and market changes

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

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

Reach customers where they are

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

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

Make customers more engaged

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

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

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

How to work data-driven in consumer segmentation

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

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

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

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

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

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

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

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

Examples of data-driven culture

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

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

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

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

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

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

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

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

Data-driven marketing is the future 

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

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

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

20 Ways to Boost Results with CDP

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From personalized advertising campaigns to attribution modeling, CDPs can help you extract the best out of your organization’s data

“Data is the new oil”, says the business cliché. No matter the sector your company operates, it certainly collects data from a number of sources – from unstructured qualitative data (from social media and call centers) to quantitative insights on paid campaign efforts and sales channels.

Marketing executives have increasingly more customer interactions to be aware of and are required to get a broad, deep picture of the audience’s needs and pain points.

A few years ago, it would have been enough just to have a DMP and CRM tool to manage customer data. They are still important today but hold limitations in capturing users’ journeys and profiles as standalone platforms.

A 2018 survey made by Forbes with 400 marketing leaders showed that most of them saw a gap in data management in their organizations, which is still true today. Only 19% reported having a robust set of analytics and technology tools to support customer-data-driven decisions. Besides, sometimes it can be challenging to make data accessible (and actionable) for marketing teams.

That is where customer data platforms come to play, with the purpose of connecting the dots between different data sources. Last year, the Gartner Institute pointed customer data platform as one of the four main emerging trends for marketers in 2020, along with blockchain, AI, and real-time marketing.

But what exactly is a CDP (Customer Data Platform)?

A Customer Data Platform is a software capable of unifying customer data from various sources, gathering quantitative and qualitative customer information across multiple touchpoints. It aggregates first, second and third-party data, as well as information collected from multiple channels, systems, and devices. 

If you lead marketing at a large company, you know how difficult it can be to connect user’s data, once the customer’s journey has become more complex with so many devices and channels available. 

With that in mind, we have prepared a list of 20 ways customer data platforms (CDPs) can improve your marketing strategy and results. 

1) Generating accurate customer profiles

CDPs can basically spot who your customers are – almost literally. They are able to filter all collected data through algorithms to determine unified customer profiles. In a single platform, It compiles identity, descriptive and behavioral data that can give you context on current customers and prospects, making it easier for marketers to build accurate personas. 

The type of data your team chooses to collect will vary according to your business and industry. If you work at a media company, for example, you’re probably more interested in customers’ preferred media channels than details about customer’s cars, information that would be crucial for car dealerships, on the other hand.

2) Accessing updates in real-time

Marketers know that customers’ preferences evolve over time, but most data management tools can’t always spot those changes. In CDPs, the processing of data happens in real-time, which makes it possible to spot changes in customer behavior in both the short and long-term. 

If a prospect stops using YouTube and migrates to Twitch, for instance, your team can quickly detect it and redirect campaigns.  

The long-term approach is also possible because CDPs can hold data for long periods of time, unlike data management platforms (DMPs), which usually hold data up to only 90 days (a cookie lifetime).

3) Avoiding data silos

Much of the data from an organization is generated and stored in different systems and departments, which makes it rarely accessible to other parts of the company. The result? A less collaborative corporate environment, less productivity, and less accurate customer profiles.

With CDPs, a great deal of a company’s data can be stored in a single, user-friendly interface. 

4) Giving marketers control over data management

For marketers, relying on other departments for reports and insights can be time-consuming and unproductive, since not everyone is on the same page about marketing needs. In that sense, CDPs also optimize the work of marketing professionals, because they can be managed by marketing teams instead of adjacent teams (like sales) or third-parties. 

Yes, CDPs should be useful to a variety of departments within a company, but every team can adapt their use according to specific goals while having access to all kinds of company data. That way, teams can also quickly scale marketing efforts and get new processes started in days, not months.

5) Understanding customers’ motivations

These days, brands don’t want to know just how a customer relates to their brand and category, but also what are his or her life aspirations and beliefs. Beyond customer profiles, CDPs can provide personality and behavioral data about customers, helping you understand their inner motivations as people, not just as customers. 

Almost like a social listening tool, you can find out the subjects they are discussing, topics they search for, preferences on content, politics, or products.

6) Connecting online and offline touchpoints

In a recent report, PWC found that the number of companies investing in omnichannel experiences has grown from 20% to more than 80% in recent years. While some marketers still struggle to be truly “omnichannel”, CDPs are able to track both online and offline customer data. 

A good CDP can combine information from various online and offline tracking applications, to get a full picture of where customers go, what products they search for, what they watch, read, or buy. A regular CRM tool, as a counterpoint, cannot pick up on offline data unless it’s manually setup.

7) Tracking interactions across different devices

Connecting interactions across multiple devices is also crucial for marketers who wish to provide seamless experiences to the audience. The CDP can connect interactions from a single person across different interfaces. 

The platform captures information such as time spent on the page, email and cookies used. If a customer accessed your page through different browsers at a desktop, and then accessed again through phone, a few days later,  you’ll know it. 

8) Optimizing targeted advertising campaigns

A CDP can automate the usually manual process of creating advertising audience clusters. From there, your team can use data to drive campaigns and promotions across multiple touchpoints, creating highly targeted, personalized advertising campaigns (CDPs can be integrated to Facebook pixels and Google Ads, for example).

Without a CDP, building these campaigns for complex audiences would take a lot more time and effort. The CDP lets you access clusters of customers and acknowledge what products they show interest in,  as well as their purchase intent and how likely they are to churn. 

9) Attracting Marketing Qualified Leads (MQLs)

A CDP is where Marketing, Sales Customer Experience and Customer Success meet. By centralizing information from these areas in a single platform, companies can optimize their marketing resources and efforts. If marketers can find out exactly where are the friction points in customers’ journeys, it’s more likely they will come up with the right messages and campaigns for every stage in the conversion funnel.

Ultimately, CDPs can support marketers in attracting more qualified leads. A study by Forbes shows that 53% of marketing executives are using CDPs to engage with existing customers’ needs, increasing the likelihood that they will become recurring clients.

10) Reducing operational costs and improving ROI

As customer data platforms can be considerably automated, they bolster efficiency and reduce operational costs. After all, if you know exactly who your customers are and can streamline the targeting process, it’s likely you’ll impact the right customers at the right moment with the right formats.

As a result, you can optimize Costs per Click (CPC), Costs per Impression (CPM), and Customer Acquisition Costs (CAC).

11) Tracking customer engagement (or disengagement)

In the myriad of data collected by CDPs, there are also quantitative and transactional data that reveal how your customer relates to your company. From buying history to abandoned carts, email click rates and responses, website visits, product views and social media engagement, your team can get a better sense of how’s the relationship between your audience and your company – and then manage it effectively.

12) Improving overall customer experience

A Walker study discovered that, by the end of 2020, customer experience will overtake price and product as the main brand differentiator among customers. When we talk about big companies and huge data sets, the lack of a CDP can actually result in poor customer experience.

Not integrating data results in friction along the customer journey, no wonder customers often complain about emails suggesting a product they just bought, or say they were impacted by wrongful ads and recommendations. Nowadays, people simply expect your company to know about their journey across different channels, and CDPs can help you a lot with that.

13) Boosting predictive marketing

Predicting customer behavior and preferences is what built companies like Amazon and Netflix. Predictive marketing is now becoming increasingly used by all sorts of businesses. This marketing technique, which determines the probability of success of different marketing strategies, is essentially fueled by data. 

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

14) Improving attribution models

With so many touchpoints with the audience, It is often difficult for companies to build a proper attribution model. According to Google, almost 80% of all transaction value involves at least two marketing channel interactions.

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.

15) Helping set realistic KPIs

By having a more holistic approach towards data, marketing teams can use CDP to measure and adjust expectations about key performance indicators (KPIs). You could even find out that your team is not tracking the right indicators, and choose new ones according to your strategy. 

However, when it comes to KPIs, CDPs must be used thoughtfully: more metrics possibilities don’t necessarily mean you’ll understand your customer better, so beware of the data that actually informs your strategy.

16) Complementing and optimizing existing marketing software

At the end of the day, marketers want more control over events in their channels, and so CDPs allow companies to deploy customers’ profiles to other marketing tools. Customer data platforms can be integrated to “delivery platforms” or “engagement platforms” to enable the planning of campaigns and messages.

CDPs can integrate your company’s email marketing or marketing automation software, website or social media platforms, and also live chat, CRM, analytics, and SMS tools. The amount of tools companies connect to their CDPs has to do, again, with the specifics of their business. Large businesses are likely to connect more tools than small companies.

17) Complying with data privacy regulations

One of the challenges marketers face is to balance personalization with data privacy, considering emerging privacy regulations worldwide. At first sight, it might look like a CDP could worsen privacy problems, since it tracks all sorts of data. From a practical standpoint though, a customer data platform can actually help companies comply with data privacy laws. 

To start, it collects mostly first-party data, which is key to data privacy. Second, it offers privacy configurations that can enforce your privacy policies. And third, a CDP acts as a single access point for data, which is safer than having multiple access points.

18) Experimenting with lower risks

CDPs are also a key engine for experimenting with emerging technologies and services. Imagine your marketing team wants to test an integrated campaign with a voice assistant for smart devices. While voice-activated marketing is still limited and won’t bring you scale, for now, it is seen as a prominent marketing channel for the future. 

By knowing your customers’ profiles, you can spot promising channels and formats and test them out with a small cohort of consumers. While combining insights to A/B tests, you might also come up with new business solutions and even ideas for revenue streams.

19) Feeding content strategy

In the age of Netflix and Spotify, customers expect personalized content that matches their particular moment in the customer journey. In that scenario, marketers have the challenge of being relevant and timely in their advertising efforts.

CDPs can help brands discover the formats of content and notifications that are more appealing to each customer, as well as when they tend to be more receptive to brands’ communication. 

20) Getting insights for products and services

If you once needed full customer research in order to understand customers’ unique needs, CDPs can give you hints about their preferences and needs. Because CDP gathers loads of qualitative information, it can also guide your product strategy.

By checking users’ feedback regularly, you can prioritize your product and service offerings to more closely match with customers’ needs. Or, you can identify trends and come up with completely new products.

Interested in a CDP for your company?

That is a lot of information about customer data platforms, right? It’s a lot to take in, so take a deep breath. Now, 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.

You might want to check out the specifics of Arena’s CDP, one of the most robust tools in the market. Register to this link to talk to one of our consultants and find out how our CDP can help your business.