The collection and mining of customer data has become an essential component of most businesses marketing strategies. According to a report from Forbes Insights and Turn, 64% of marketers agree that data-driven marketing is crucial to success in a hyper-competitive global economy.
Businesses are already using marketing technologies to automate time-consuming manual tasks, provide better insight into the ROI of their campaigns and to target and attract new and existing customers more effectively. However, with the volume of customer data now available, in order to have a comprehensive data-driven marketing strategy, marketers need to combine all this data into one unified database. This is where Customer Data Platforms (CDPs) come in, bringing it all together into one single customer profile to enable smarter marketing campaigns.
CDPs continue to gain momentum and, according to the CDP Institute, since inception in 2013 the market has already grown to $1 billion.
A CDP acts as a hub for all customer data. It combines digital clickstream data with customer data in a CRM in real time and allows ad-hoc sources such as marketing lists to be added when needed.
Most CDPs will have analytics, business intelligence and marketing orchestration embedded into the application. This allows for data to be analysed, to build segmentation and models for deployment in campaigns, and a way to instruct channels on who to contact, what to send them, and when to send it. This isn’t anything new, but the speed of deployment enabled by techniques, such as prescriptive analytics, is where the big difference occurs, as these decisions can be felt instantaneously by the end customer who gets an increasing level of personalisation as they engage with the marketing activities.
However, like most software platforms, CDPs come with some limitations. One of the major issues with many CDPs, which have evolved from previous tech rather than being built from the ground up, is that they often only manage customer data. This means that they are unable to accommodate data that can impact behaviour, such as weather forecasts, pollution readings, stock prices or legislation.
Then there is the integration issue. Often existing investments in intelligence solutions are unable to integrate into the CDP platform. This means that you may end up forced to use out-of-the-box analytic functions governed by the CDP platform and these functions are very limited in their capability.
The good news is however that the roadmap for CDP technology is constantly evolving and many of the CDP’s limitations are likely to be addressed:
Building an omni-channel marketing hub
Being omni-channel means a customer can consume a product or service through multiple channels simultaneously. For example, imagine going into a shop to buy a pair of jeans only to discover they don’t have your size, but you launch the store’s app and it automatically recognises the store you are in. Taking a photo of the barcode will identify the product and a notification will ping to an assistant who will come and tell when you when that size will be available and ask if you’d like to order them for collection or delivery. This is where we’re seeing CDPs evolving into Mastered Data Management (MDM) platforms. In the future CDPs will be hubs for all your marketing data. It will apply data quality rules in real time and instantaneously distributes the data to the point of need – synchronising data held in different systems. This is how CDPs will deliver omni-channel marketing.
Mastered Data Management
MDM is being used by forward-thinking businesses to provide governance around all data that enters an organisation’s ecosystem. The principal of MDM means cataloguing, organising, enriching and subjecting all data to a pre-defined set of data quality rules before it can be used. If a customer removes a marketing consent in one system or channel for example, all other systems and channels will hold the same consent information, instantaneously.
Data sets that could help marketers devise campaigns, set budgets, produce content or create triggers aren’t currently catered for in most existing CDP products, and we can expect this to change.
The AI revolution
AI is already embedded into some CDPs. It gives businesses the power to continuously improve decision making so that every marketing communication is relevant and timely for the customer.
In the future, expect AI to be increasingly central to CDPs. It could be used to power personalisation journey techniques like Customer Activated Response Optimisation where each engagement with a customer, automatically triggers the next one. AI should also be central to content strategies where algorithms are joining unconnected pieces of information into content journeys for individual customers influenced by social trends and current affairs.
In the future we can also expect CDPs to offer support for specialist analytics tools and even marketing automation tools like Salesforce Marketing Cloud and Adobe Campaign. These platforms will become integrated as CDP providers start to realise, they can’t be all things to all people.
This also means that CDPs will become modular. You will be able to buy the parts you need and integrate them within existing systems. And ultimately, this will create a new breed of CDP service providers whose job it will be to connect all this disparate martech. We’re already starting to see some of these organisations appear and can expect to see them thrive over the next few years.
Writen by Neil Martin, commercial director at Qbase.
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