Tag Archives: segmentation

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.

Future of Cookies In Marketing: Strategies That Work

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Prepare for the cookieless future. User privacy concerns have prompted the advertising industry, Apple, and Google to develop new marketing strategies. New privacy laws make the conventional approach to personalized advertising no longer work. 

To succeed, advertisers need to meet new consumer expectations and regulatory restrictions by creating direct connections with their audiences. Success in a world without third-party cookies starts with understanding how the world has changed.

New Opportunities In The Digital Landscape Changed

The future of cookies will take two primary forms: cohort-based marketing and first-party relationships. These opportunities deserve a prominent place in any effective marketing strategy today.

The Rise of Cohort Based Marketing: Not Ready For Prime Time 

Rather than tracking each user’s online behaviors, the new approach pioneered by Google and adtech companies is cohort-based advertising. This means aiming your advertising at a group of people with similar interests instead of a single user. One example of this trend is the federated learning of cohorts (FLoC) that Google has pioneered. This concept is exciting because it will leverage machine learning to enhance digital advertising.

The FLoC concept was initially developed in 2021 in a privacy sandbox created by Google. This particular technology came to an end in January 2022. There are some ongoing consumer privacy concerns with the approach taken at Google. As a result, the company is moving in a new direction called “Google Topics” (or Topics API). 

It’s not just privacy concerns that cause difficulties for cohort-based marketing. Fundamentally, tracking a large group of people may not be a good match for the customer journey you have developed.   

First-Party Relationship: The New Way To Understand Consumer Behavior

Also known as a first-person cookie, this marketing approach is exciting. A first-party cookie is direct rather than relying on third-party cookie data from others in the marketing industry. For example, a potential customer lands on your website and accepts browser notifications or signs up for your email list. 

Companies can target relevant advertising directly to their potential customers with this direct connection. Using your Customer Data Platform and Google Analytics, you might notice that one user is regularly visiting your “on-sale” pages. Based on that information, you can tailor marketing to that individual user. For example, send them more emails or notifications emphasizing your seasonal sales. In essence, establishing a robust first-party relationship means personalized messaging becomes much more manageable. A deep understanding of what your customers want means you can improve your emails, Google Ads, and other marketing campaigns much faster.

How To Succeed With First Party Cookies

Thriving in a 1st party relationship world requires solving two problems: the need for more website traffic and user consent.

1) Increase Website Traffic

First, this strategy requires potential customers to come to your website. That is getting harder today because many popular websites and tech companies operate as walled gardens. These walled gardens maximize user time on their website rather than sending people elsewhere. 

2) Renewed Focus on Earning Consumer Consent

The second challenge is that privacy standards require you to seek consent to establish a direct relationship with a user. The adtech industry has previously played fast and loose with the privacy rules. Also, privacy regulations like GDPR have pushed companies to change their advertising strategies. It’s not just regulations either – companies like Apple have pushed back hard against invasive tracking methods. As a result, third-party data like traditional cookies are largely becoming obsolete.

Gaining consumer consent in this brave new world requires offering something attractive to users. There are different approaches to gaining consumer consent to individual user tracking. Common solutions include promising users a personalized experience, offering a discount (i.e. a discount code) or a free resource like an exclusive webinar or report.

Audience Engagement: A New Hope For Marketing

The future of cookies is fundamentally focused on creating and deepening direct relationships. Your online presence has to become more exciting and appealing to your potential customers. Your online content, events, and experiences have to be so appealing that your audience happily agrees to receive marketing messages from you.

Three Strategies To Grow And Deepen First Party Relationships

Use the following strategies to keep users returning to your website week after week, even as the digital landscape changes. By the way, offering engaging content and experiences has a secondary marketing benefit. You’re giving your users more chances to share your content with other people. 

1. Boost Investment In Content Marketing and Online Events

To keep people coming back to your website repeatedly, appealing products and services are not enough. Your marketing itself needs to add value like original data, a community of like minded people and exciting content.

So, what exactly does a boosted effort in content marketing look like? According to the Content Marketing Institute, more than half of B2B marketers have increased their spending on video, events (including digital and hybrid), owned media assets (i.e., content you own and control), and paid media.

As third party cookies decline, it’s wise to take inspiration from a variety of brands who are achieving wins in content marketing. 

  • Salesforce offers a wide range of content marketing initiatives like podcasts (e.g. the Marketing Cloudcast and the Marketing Trends podcast), events (i.e. the Dreamforce conference has attracted tens of thousands of attendees) and much more.
  • Dropbox shows that interactive approaches to content marketing can become wildly successful. A few years ago, Dropbox created a “What kind of marketer are you?” quiz to create awareness – a campaign that attracted significant leads.
  • PayPal, the well known financial technology firm, shows a simple way to create content marketing: work with your users. PayPal Stories have recently featured a variety of successful small business owners and entrepreneurs. This PayPal approach to content marketing shows that you can make customers the star of your content marketing. 

Investing more deeply in content marketing matters because it gives your customers a reason to keep coming back to your website.  When customers are motivated to visit your site regularly, you have more opportunities to ask for their consent to market to them through their browser, email, and other means.

2. Grow Your Social Media Audiences

The best way to be ready for the end of cookies is to drive the audience to your own website. This way, you can generate proprietary, first-party data about your audience. Attracting your audience from social media is worthwhile because these audiences have already shown interest in your brand.

Since there are many social media platforms, there are two simple techniques to decide which platform to focus on. Start with your customers – what social media platforms do they like the most? Running a survey of your customers to ask them about their favorite social media sites can help to guide you.

Further, you also want to think about which platforms have sufficient reach and advertising opportunities. For example, Facebook, Instagram, YouTube, and TikTok have a significant market share and interesting significant advertising features. Building a following on those platforms is another way to grow despite the uncertain future of cookies.

3. Build Your Customer Data Platform

Simply increasing the number of website visitors and subscribers is not enough to succeed in a cookie-less future. It’s vital to deepen your understanding of consumer behavior.

Implementing a Customer Data Platform is a significant next step. A CDP connects to your existing apps and platforms like your email marketing software, Google Analytics, and CRM. Drawing together multiple sources, it can help you understand the content and experiences that your customers engage in before buying. 

Once you have a CDP in place, use to understand the customer journey in detail. Look at how many touchpoints a potential customer has with your brand before they buy. For example, you might see that high value buyers attend events like live shopping and download a few specific types of content.

As a result, you can quickly refresh your advertising strategies monthly based on the specific patterns your users are engaged in.

What To Do This Month To Thrive Without Traditional Cookies 

Choosing the right marketing strategy matters, but your team also needs to know what exactly to do this week and this month to succeed. Use these tactics to win in today’s marketing game without focusing on third-party cookies. 

1. Integrated Email Marketing Analytics

The emergence of new marketing opportunities like the metaverse is exciting. Positioning your brand to win in these emerging areas can pay off long-term. However, you also need to keep your eye on this quarter’s results. 

Optimizing your email marketing effectiveness remains one of the best ways to drive higher returns. For example, check if your email marketing software supports A/B testing on subject lines, links and other elements. This approach lets you achieve individual user tracking through email.

Logging into your email platform and reviewing its trends on open rates, clicks and replies only give you part of the picture. It is also vital to know whether a subscriber has attended an online event or engaged with your sales team. Arena’s CDP platform makes it easy to connect the dots between email marketing data and other customer interactions.

2. Boost Push Notification Marketing

While email marketing has exceptional ROI, it is not the only opt-in digital marketing option. With push notifications, you ask the customer for permission to send messages to them directly through the browser or mobile apps.

According to Airship research, opt-in rates for mobile app push notifications range from 29% to more than 70%! To earn high opt-in rates from your prospects, keep investing in engaging content and virtual events. When prospects enjoy your content and experiences, they will happily opt in to receive more information from you.

3. Review Your Privacy Policy

Customer expectations for privacy and data protection are increasing every year. As marketers pivot away from cookies, your privacy policy needs to keep up. There are several layers to updating your privacy policy for the post cookie era.

Start by reviewing your privacy policy to see if it reflects the customer data you are currently collecting. If your privacy policy was last updated over a year ago, it might be out of date. For example, adopting a customer data platform to build a comprehensive customer profile may require an update to your privacy policy because you are changing how you use data.

Next, take a hard look at your security safeguards. You probably have robust systems to protect highly sensitive data like payment data. However, your marketing databases also contain personal information, ensuring that data is protected.

The New Way To Achieve Personalized Marketing 

Cookies were powerful because they unlocked personalization for digital marketers. As we say goodbye to cookies as a central strategy, how can you keep data-driven personalization?

The answer lies in setting up a customer data platform for your brand. It’s more than data dashboards and exciting reports. A customer data platform is one of the best ways to identify advocates and passionate fans in your audience. With a CDP, your marketing team can also learn which marketing assets are driving your results.

Discover how a customer data platform can solve today’s most pressing problems in marketing. Download Arena’s CDP Ebook: The Future of Marketing and Sales. Your marketing personas will be grounded in factual data with a CDP in place.

Tips You Need to Know

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Push Notification Segmentation is super-effective for marketing purposes. Notifications become even more efficient when the audience is segmented.

Unless you have a static audience (which is impossible), Push notification segmentation is one of the essential steps you can take to get the right messages to the right audience and achieve your marketing objectives.

The goal of sending push notifications to your subscribers is not just to get them to buy what you are selling. Actually, the purpose is to enable you to get closer to them.

You can only do this when you send highly personalized messages. This is what segmentation will help you achieve.

What is segmentation?

In simple terms, segmentation means dividing a heterogeneous audience into more homogenous and manageable parts. Segmentation is done based on parameters marketers consider very important, such as demographic, geographic, social, and behavioral patterns.

By segmenting your audience, you are creating target groups. This is normally done directly on websites by embedding filters, forms, and questionnaires before or after a visitor has made a purchase. External tools can also be used when trying to attract new customers.

How is segmentation used in marketing?

It has been reported that as much as 75% of internet users are concerned about how their personal data are used by companies. At the same time, up to 62% of users expect brands to send them personalized messages. How do you reconcile this? The answer is segmentation.

Basically, segmentation is used in marketing to get the right message to the right audience. For push notifications, segmentation is used to create a target audience so that it becomes relatively easy to reach the different target audiences with the right message.

Types of segmentation

As hinted earlier, there are parameters used for segmentation. These are the criteria that determine where each member of the audience falls into. They determine the type of segmentation in use:

Geographic

This is segmentation based on the location of the website visitor. You can collect data on the location of website visitors and use it to target your audience. You can target according to country, city, or even district.

Demographic

This pertains to age, gender, nationality, and a few other parameters. Age significantly affects people’s buying behaviors, and you can use your demographic data to target your audience and send relevant push notifications.

Social

Social parameters, like education level, income, marital status, among others, are also used for segmentation.

Behavioral

Based on the behavior and activities of a subscriber or website visitor, you can send push notifications that will get him/her to buy your products or services. It is not rocket science; frequency of purchase, interest in certain products, etc., can be used for targeting.

Segmentation can also be based on device type, whereby the device used by the visitor to subscribe to the push notification is captured.

How does segmentation work for Push Notification?

Fundamentally, segmenting works in push notification almost the same way it works with other marketing methods. Here, you will need different subscriber groups and create push notifications with information that corresponds to their tastes and needs.

It is important to state clearly here that segmentation is not exactly the same as personalization. Rather, segmentation facilitates personalization. In effect, it allows marketers to improve campaign conversion rates and overall efficiency.

Depending on the tools in use, push notification segmentation may operate on metadata, tags, and aliases.

Metadata filters

This is deployed during the subscription process of the push notification system. Within the little time it takes to subscribe, the system can capture information regarding the browser being used (Opera, Chrome, Firefox, Safari, etc.), the Operating System (Windows, iOS, Android), and the location of the device. The information can be used for location-based push notifications.

Tags

Tags are used to target subscribers and website visitors according to their interests and activities on the site. It can be set for categories or product pages to observe and tag visitors that open the pages and those who perform specific actions.

Tags are used to send push notifications about new arrivals, improved offers, and discounts, as many more, according to the interest of the subscribers.

Aliases

Aliases are personal identifiers that can be effectively used to personalize offers and trigger notifications. The push notification system accesses personal identifiers for subscribers as they log in or provide their details.

It can be the username, email address, token, etc.; this allows marketers to send push notifications to subscribers individually.

Benefits of segmenting your audience

Good push notifications are the ones that help marketers to get closer to the subscriber and convince them to buy. It has to be personalized, and it has to convert. These are the things push notification segmentation can bring. Here are specific benefits of push notification segmentation:

It Gets you closer to your audience

Segmentation is regarded as the first important step towards personalization. When you are able to effectively segment your audience for push notifications, you will be able to send everyone messages they will find useful. You can take a step ahead to personalize the messages. When you do, it takes you a huge step closer to your audience.

It Improves your conversion rates

Conversion rates, and not click rates, actually defines success in marketing. As you most likely know already, push notification segmentation will take the right messages to the right people who will click through and make purchases or subscribe to your services because it actually interests them.

It Improves user experience

If you want to run a sustainable business, user experience is another important area you need to work on. Luckily, push notification segmentation helps you so much in that regard.

Personalized messages to your target audience will show them that you actually care about them, even though you want to sell.

It Improves your marketing efficiency

When you get the right messages to the right people and get many of them to take the actions you want them to take, your marketing efficiency improves.

That is what data-driven marketing is all about. That is one of the benefits you get from segmentation of push notification and Arena Personas use. Overall, you will spend less to achieve great results.

Conclusion

Push notification segmentation improves your marketing efforts in many ways. It is based on customer data and helps marketers personalize push notifications.

As you probably know already, data-driven marketing is the future. Push notification segmentation is part of the future.

Arena is always here for you. Your brand’s Customer Engagement Platform can leverage Arena Personas first-party data. Get started for free in minutes.

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

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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.

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.

How Customer Data Platform is reinventing customer relations

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

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

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

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

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

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

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

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

Why do companies use Customer Data Platforms?

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

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

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

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

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

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

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

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

What types of data does a Customer Data Platform assess?

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

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

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

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

But how do CDPs gather such different information?

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

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

The effects of CDP in customer experience

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

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

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

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

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

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

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

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

How CDPs are reinventing customer relations

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

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

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

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

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

1. CDP enables segmentation opportunities

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

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

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

2. A CDP gives your interactions a personal touch

Similarly, you can not spell personalization without customer data.

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

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

3. A CDP enriches customer relationships

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

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

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

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

4. A CDP is agile

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

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

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

5. A CDP ingests data from any source

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

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

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

6. A CDP elevates digital transformation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

30 reasons to use Customer Data Platform for eCommerce

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Information is king, and businesses are constantly on the lookout for tools that can provide a richer understanding of their customers and the journey they embark upon. Customer Data Platforms (CDP) have emerged as crucial tools, particularly for the burgeoning realm of eCommerce.

30 Reasons To Use A CDP

Here’s a deep dive into why CDPs should be at the heart of your digital strategy:

1. Seamless Automation

Trust in a CDP to transform complex data streams into easily digestible and actionable insights, automating processes that would otherwise drain resources.

2. Eliminating Operational Silos

Facilitate efficient information-sharing across departments with a CDP, creating a unified vision for your business.

3. Enriching the Customer Journey

Harness CDPs to unlock a comprehensive understanding of your customer’s interactions, ensuring you’re always delivering value.

4. Intelligent Marketing Segmentation

Harness the power of AI to sift through varied data, empowering you to create precisely targeted marketing campaigns.

5. Tailored Communication

Today’s consumer demands personalization. With a CDP, ensure every touchpoint resonates and builds loyalty.

6. Crafting Memorable Experiences

Use data-driven insights to craft seamless experiences, both online and offline, enhancing customer satisfaction.

7. Metrics that Matter

Deploy CDPs to get an eagle’s eye view on the efficacy of your eCommerce strategies, refining them as you grow.

8. Real-time Relevance

In an ever-changing market landscape, CDPs ensure you’re always a step ahead, thanks to real-time data updates.

9. 360-Degree Customer View

Break down the barriers between online and offline data to truly understand your customer’s journey.

10. Unified Customer Profiles

Leverage a CDP to get an in-depth understanding of your audience personas, refining your marketing strategies.

11. Stand Out from the Crowd

Responsive data-driven strategies ensure you’re always ahead of the curve, a must in today’s competitive marketplace.

12. Maximizing Customer Lifetime Value

Invest in understanding your current customers’ needs and behaviors, ensuring they remain loyal advocates.

13. Merging Digital and Physical

Achieve true omnichannel success by merging online and offline data streams.

14. Refining Offerings

Listen to your customers. Let their feedback guide improvements in your products and services.

15. Attracting Ready Buyers

Precision-target your messaging to capture those on the cusp of purchase.

16. Deep Customer Engagement

Leverage CDP insights to truly engage customers across every touchpoint, building loyalty and trust.

17. Enhancing Marketing Tools

Amplify the efficiency of your current marketing tools by integrating them with a powerful CDP.

18. Spotting and Addressing Anomalies

Ensure your strategy is always on track by identifying and rectifying any anomalies.

19. Anticipating Customer Behavior

Predict future customer actions and behaviors, refining your strategies for maximum impact.

20. Optimized Operational Efficiency

Drive efficiency by streamlining data processes, freeing up resources for strategic action.

21. Strategic Pricing

Ensure your pricing remains competitive and appealing by gauging customer sentiment and market trends.

22. Effective Supplier Negotiations

Utilize historical data to drive better deals and collaborations with suppliers.

23. Never Miss Feedback

Continuous monitoring ensures you’re always in the loop, adjusting strategies based on real-time feedback.

24. Minimize Cart Abandonment

Dive deep into the reasons behind cart abandonment, ensuring your checkout process is as smooth as possible.

25. Addressing Checkout Drop-offs

Investigate and rectify factors causing customers to abandon checkouts, maximizing conversions.

26. Tackling Churn Rates

Unearth the reasons behind dwindling customer loyalty and rectify them, building a lasting relationship.

27. Boosting Conversion Rates

Harness data insights to optimize your site’s usability and messaging, driving higher conversions.

28. Driving Organic Traffic

Strategically leverage live content and social media to naturally increase site visitors.

29. Elevating Social Media Engagement

Deepen customer relationships by engaging them on social platforms, turning followers into loyal customers.

30. Embrace the Future

Data is the future of marketing and sales. Integrate a CDP into your strategy and ensure your brand remains at the forefront.

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For a comprehensive understanding of the transformative power of CDPs, delve into Arena’s ebook Diving Into The Customer Journey In Live Ecommerce. The insights within can be the key to unlocking the full potential of your eCommerce strategy.

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An essential guide to Customer Data

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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.

What is and how to do Customer Data Management CDM

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This guide will teach you how to use data frameworks to offer differentiated customer experiences and optimize marketing ROI.

It has been a few years since the buzz around “Big Data” started. Working with marketing in the media space, you probably hear your peers bragging about their data-driven strategies a lot. Do you consider yourself a data-driven marketer too?

Beyond marketing, modern CMOs have had to assimilate abilities in information technology and customer data management.  In 2020, you should expect most marketing teams to effectively use customer data to drive growth and customer satisfaction.

Getting there can be quite a journey, though. Research from the Dentsu Aegis Network from 2018, made with 1,000 CMOs, shows that to two-thirds agree that while there is increasingly more consumer data available, it’s harder to extract insight from it. 

Another report from Harvard Business Review shows that less than half of an organization’s structured data is actively used in making decisions, while less than 1% of its unstructured data is analyzed or used at all. 

Historically, companies have relied on excel sheets and on manually storing and analyzing customer data through different software, with little to no integration. No offense to excel and isolated systems, but things have changed.

The amount of customer data flowing to companies’ databases continues to rise through new channels and platforms, and that’s where customer data management comes to play. More than ever, organizations need a complete set of practices and automation tools to help them manage customer information.

In this article, we will talk about the importance of having customer data management on top of the marketing agenda. We’ll also explore the types of data, best practices for data management, and the role of different data software in data management.

What is customer data management?

Customer Data Management, shortly known as CDM, is the framework in which companies collect, track, organize, analyze and share customer data throughout the organization. 

The term “Customer Data Management” was coined in the 1990s, initially as a way to describe software that replaced disc-based or paper-based data storage. Such software was often used independently by departments within companies.

The concept of CDM evolved along with the Software as a Service (SaaS) industry and nowadays embraces a wide array of cloud computing applications that centralize access to customer data. It also embraces a set of methodologies that help marketers to locate, cross-analyze, and act on customer data.

Why marketers should invest in customer data management?

In a scenario where customers interact with brands through dozens of channels, there is almost no room for guessing and gut-feeling in marketing. Having a good hunch about what will engage audiences is not enough, and so the role of customer data management is to provide companies with accurate and actionable insights.

It reduces your chances of making mistakes, since mismanaging your customer data can lead to actions that will ultimately reduce engagement and profitability. Additionally, using customers’ data in a biased, inaccurate way can lead to poor customer experience (CX) and harm your brand. 

Good customer data management is key to building a data-driven culture and bolstering customer-centricity in marketing. Isn’t it everything you wish for? 

Data Management strategies can bring marketers a holistic view of customers’ journeys, connecting the dots between different channels, and offering cues to enhance their experience.

Customer Data Management is important for: 

  • Customer acquisition
  • Increasing retention and engagement rates
  • Knowing customers in detail and in real-time, from individuals to clusters
  • Increasing data quality by breaking data silos
  • Simplifying customer relationship management (CRM) 
  • Drive higher revenue

How customer data management is connected to customer lifetime value (CLV)

Having well-structured customer data management practices is what allows marketing teams to follow up on important indicators, like the Customer Lifetime Value (CLV).

Amidst a seemingly chaotic user journey – with different channels, devices, and purposes – customer data management can help marketers understand customers and guide them through the conversion funnel. 

Collecting and organizing relevant customer data will allow you to better segment your audience, find out behavior and buying trends, and drive personalized campaigns. As a result, marketers can ultimately attract more qualified leads and reduce customer acquisition costs (CAC) – improving overall marketing ROI.

But customer data management is useful only for marketing. It can help sales, IT, and customer success manages customer touchpoints. The great news is that every department can have access to the same data and deliver a consistent, unfragmented user experience.

Four Types of Data to pay attention to

Before trying to set up a data management framework, your team should have a roadmap of data types and specific information that can enrich your strategy, according to your business goals. 

We will now explore four data types and a few examples for each.

1) Identity Data

Identity data is collected through micro-transactions and interactions in the company’s channels – when a customer signs up for a newsletter or enters their payment information on the checkout page.

By collecting customers’ identity data, marketers have the minimum amount of information to start a conversation (and hopefully a long relationship) with the customer. Such information is also helpful to help companies build brand personas. 

Examples of identity data: Name; Personal data (date of birth, region, gender, etc); Address; Contacts; Social media profiles; Account data.

2) Quantitative Data

Quantitative data is mostly related to the customer’s decision making process as they interact with your brand. Such data covers different channels throughout the customer lifecycle, from emails and customer support channels to purchase transactions and social media. 

The idea is to understand the specifics of how customers are interacting with your brand through important operational data. You could use quantitative data to find out details about channel interactions and steps that led customers to convert.

Examples of quantitative data: Transactional data, such as the number of purchases, time of purchase and subscription value; Order dates; Cart abandonment and Bounce info; Click-through-Rates; Website visits; Product views; Number of Interactions.

3) Descriptive Data 

Descriptive data comprehend additional lifestyle information that complements customer personas. Collecting this type of data typically requires doing deeper research and interviews with customers in order to dive into individual buying behavior. Such data is pretty helpful if you want to use predictive analytics in your marketing strategy.

Examples of descriptive data: Family Data such as marital status and number of children; Lifestyle data, like hobbies and interests; Education and career data.

4) Qualitative Data 

Qualitative data should describe the motivations behind the customer’s actions. Gathering such insights might be more time-consuming and expensive than simply collecting quantitative data, but it is worth it. After all, tackling into customers’ deepest motivations is how you’ll captivate them.

This type of data is better collected on a one-to-one basis, mainly through the marketing teams’ interpretations of customers’ opinions throughout their journey – through analyzing CRM notes or reviews in websites, social listening tools, feedback questions, and Net Promoter Score (NPS) systems. 

Best practices in customer data management

An effective customer data management framework requires marketers to make human and tech investments, have well-defined processes and priorities. We have picked a few key practices involved CDM:

Data collection 

A lot of the data within enterprises go unused, and so data collection is the first step in building an integrated customer data management strategy. There are millions of data streams coming into companies’ systems from many touchpoints, and so marketers need to make sure relevant data doesn’t go to waste. 

It’s important to understand what data needs to be ingested. Ask yourself: What goals do I want to achieve with my marketing strategy? Which data points are directly or indirectly related to my Key Performance Indicators (KPIs)? From there, you can start filtering your sources of data and the indicators you will track.

Data Integration

Centralizing all company’s data into a central system is also vital for customer data management. That enables the “ETL Process”, which stands for “Extracting, Transforming and Loading” data. This stage is where you will check your data integrity, filter it, and validate it. 

A good data system will ingest relevant data, convert it in necessary formats and load it into different tools such as a data warehouse, a customer data platform (CDP), a data management platform (DMP), a customer relationship management (CRM) or any other system. The result? You will have a single hub for all the data you need.

Data management

This is where you connect the dots between data points to build robust, unified profiles of individual customers or segments. This could mean using statistic models to create identity graphs, applying data governance to make sure you integrate consent to customer data, or anonymizing data to be used through a data management platform (DMP).

Data analysis and activation

Data management tools: the difference between CRM, DMP, and CDP

Although customer Data Management can be described as a framework, it requires companies to have the right technologies. 

Your data software stack could be more or less complex depending on the size of your business and the number of touchpoints with the customer, but, essentially, your CDM strategy will require a combination these platforms: a Customer Relationship Platform (CRM), Data management Platform (DMP) and Customer Data Platform (CDP). 

Each one of them plays a role in your strategy. But what is the difference between them? 

The basis of data management starts with customer relationship management systems (CRM), which are built to engage with customers by tracking their relationship with your company. They only store data if the customer has interacted with the brand in some way, and they are based on historical and general information such as contact, demographics, and notes made by CRM teams.

Data management platforms (DMPs), on the other hand, have been widely used by marketers to serve ads and lead digital campaigns. These platforms focus on third-party anonymized data collected through cookies (that typically expire after 90 days), device IDs, and IP addresses.

In a different model, a Customer Data Platform (CDP) is a software capable of unifying customer data from various sources, internal or external, gathering quantitative and qualitative information from multiple touchpoints between a company and its customer base. It allows you to build a holistic view of customers and their pain points in a granular way. 

Why CDPs are the ultimate trend in customer data management

Although CRM systems, DMPs and CDPs share similarities, they are different when it comes to managing data. Customer data platforms, specifically, have increasingly been used as an integration hub for data systems because they are built to ingest large volumes of data from multiple sources – unlike CRM systems and DMPs.

There were days when marketing segmentation based on DMP persona segments and CRM was enough, but today, brands are expected to personalize every step in the customer journey – which is only possible through CDPs.

A study by Forbes shows that 53% of marketing executives are using CDPs to engage with existing customer’s needs, increasing the likelihood that they will become recurring clients.

The focus of CMOs is also shifting from third-party data and anonymous data to first-party, single customer data, which also underlines CDPs’ importance. As data privacy and compliance regulations arise, organizations also seek to work with their own, integrated data.

CDPs are capable of providing marketers with a historical record of identified customers that can be used not only for advertising but for other purposes as well.  By centralizing information in a single platform, companies can optimize resources and avoid having to rework their data over and over through different systems. 

Bonus tips for successful data management

Make data widely available to different teams: The Harvard Business Review study we mentioned before reveals that 80% of a data analyst’s time is spent on just discovering and preparing data. Customer data can be an important asset across departments, so it’s important to centralize access to it instead of storing it in separate departments and warehouses. Let the data flow!

Always keep data governance in mind: Understand the privacy policies of your data tools and ensure consent is integrated into all of your data collection, while also respected in marketing campaigns. 

Don’t over-collect data: Understand exactly why you’re collecting the data your collecting, and which questions your company is trying to answer with them. Resist the impulse to gather too much data “just in case” you need it, without a proper purpose.

Create rules for data categorization: Set up file formats you’ll be using, standards for tags, file-naming, and timestamps. Such standards will make it easier for your team to navigate through the data.

Beware of new data sources: Pay attention to emerging data types, such as those from voice activation devices, geo-localization in smart devices, Internet of Things, Augmented and virtual reality platforms, etc. New data points will eventually require new processing and marketing frameworks.

Still want help defining your customer data management strategy?

Now that you have learned a bit more about customer data management, maybe your next step will be to study data management solutions.

If that is the case, we recommend you check out Arena’s customer data platform blog section to dive deeper into the subject. You can also get in touch with one of Arena’s consultants and learn the specifics about our CDP.

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.