Digitalization has been accelerating over the past decade, and the importance of customer data is beyond doubt. How businesses should leverage digitalization to improve customer experience and utilize the vast amount of customer data generated from it have become new areas of focus. Many enterprises have effectively managed complex data from numerous brands and customers by using customer data platforms (CDPs). So here comes the question: does every business need a CDP? What signs indicate a business truly needs a CDP? After collaborations with a number of brands, we have identified three common signs that indicate it is time for a business to deploy a CDP to better harness the value of customer data.
Scenario One: Tired of Integrating Data
If your business struggles to integrate data from different channels, identify loyal or high-value customers, or make data-driven decisions, then a CDP is worth considering. Whether a company is just starting to embrace digitization or increasing its investments in it, every step requires collecting data from various channels and integrating it into a convenient and accessible location. Most businesses face a challenge in continuously integrating, standardizing, and cleansing data to truly address customers’ digital experience issues.
A CDP is extremely effective in addressing this challenge, because it can integrate customer data across channels and touchpoints while minimizing data redundancy and complexity. In the digital age, businesses have to deal with a massive amount of data, which is often scattered and siloed across different channels and platforms. Especially for businesses with a large customer base and frequent activities, the integration of customer data is crucial for driving better customer experiences and marketing innovation.
Scenario Two: Hard-to-Identify Loyal Customers
For large enterprises with many brands, identifying loyal customers across a range of products and brands can be a significant challenge that becomes even more apparent for companies that store data in a dispersed manner across different platforms and lack the capability to connect and unify the data. Meanwhile, the most loyal customers are often the most valuable ones, as they are more likely to make repeat purchases across brands. To truly understand who the best customers are and what appeals to them, data unification at the company level is necessary. However, creating a unified customer view requires making requests to multiple departments, learning new tools, designing new workflows, manually integrating data, and overcoming various obstacles such as accumulation of issues, delays, and bugs. Manually integrating isolated data to identify the most valuable customers is not only painful but also time consuming.
In addition, after integrating customer data from various channels, businesses also need to build accurate user portraits with a unified view of each customer. They should customize customer journeys flexibly based on user segmentation and achieve precise targeting for different user types. Only then can they build their own pool of private domain traffic, promote customer acquisition, and encourage repeat purchases. If a company struggles to identify high-value, loyal customers and provide a tailored digital experience that fosters better customer relationships and drives repeat purchases, it should consider using a CDP.
Scenario Three: Experience- and Intuition-Based Decisions on Digitalization
Businesses must create hundreds or even thousands of digital experiences throughout the customer journey. Compared to relying on subjective intuition and experience, using objective data to guide digital experience decisions is more scientifically effective. However, achieving this at every touchpoint, brand, channel, and device, often poses significant challenges. Just imagine when marketing teams collect data from different channels and attempt to use this data in email campaigns, advertising, or social media to communicate with customers, the complexity and cumbersome nature of marketers’ workflows is inevitable. The inability to access this data quickly leads to difficulties in optimizing the customer journey, resulting in significant waste of advertising and marketing investments, as well as impacting the team’s efficiency.
To sum up, businesses often struggle to fully leverage data to gain insights into customer behaviors and needs. Marketers face numerous challenges and difficulties. However, with the further optimization of marketing technologies including a CDP and marketers’ increasing utilization of data, marketers can overcome challenges, and businesses can gain a better understanding of customers and achieve rapid growth.
