Customer Data Platforms: Building a Better eCommerce Experience
Customer Data Platforms, or CDPs, remove assumptions from marketing campaigns and customer interactions by bringing together data from a wealth of touchpoints; in this context, touchpoints can be social media interactions, applications, online advertising, and product placement within a corporate or visually conspicuous event. These are used to gain a global view of the route taken by the customer to arrive at their point of purchase, or expression of interest.
Unifying data generated by a single customer using a number of different devices is key to measuring preferred methods of interaction within certain demographics, how individual products are viewed and bought, and whether optimised content is more effective in generating sales when viewed on certain devices.
The Limitations of CRMs
It is important to understand the unique characteristics of CDPs, as well as how they differentiate from what would be regarded as their forerunners within consumer data management protocols: Customer Relationship Management systems, or CRMs.
CRM systems were (and still are) predicated upon managing customer relationships. However, they typically do not drill down into how the customer arrived at the point of purchase, and merely provide a tool to manage retrospective end-result data. CRM systems, then, are useful to record the transactions of customers with a view to generating additional sales, however, they do not consider products within an enterprise’s range that may first have been viewed by the customer before opting for their ultimate choice.
There is an obvious overlap between the functions of both CDP and CRM systems, with customers being at the heart of what both set out to achieve. For longer-term, more nuanced strategies, CDPs can take businesses into more expansive terrain and zero in on the whole customer journey, for example which touchpoints are favoured by certain demographics, and even identify the products which are most likely to be favoured by users of smartphones or tablet devices.
The Importance of Data to CDPs
It is arguable that to achieve this, it must first have a broad spectrum of touchpoints from which to garner data, and the appropriate means with which to receive, analyse, and store. Whilst no system can ever be 100% accurate, there is a greater chance that data drawn from a wide source of touchpoints coupled with an accompanying CDP will be able to be of significant benefit to any enterprise.
It is suggested that the best way to reduce data ambiguities and errors is to broaden the methods from which consumer data is ascertained, rather than attempting to merge multiple records with questionable accuracy. Even if cleansed, this multisource consumer data is not guaranteed to contain enough relevant information from which effective campaigns can be launched. It can be said, therefore, that deploying a CDP is a balancing act between maintaining accurate data sources and cleansing existing
Our latest research found:
- Customer data platform providers will generate $6 billion globally by 2027, rising from $1.7 billion in 2022; representing total growth of 250%.
- The introduction of AI-based services will be key to unifying multiple data sources on a single platform, reducing siloed data and centralising enterprise access to customer data.
- The ability of customer data platforms to merge different data sources using AI is critical to unlocking more granular user insights, to inform highly targeted marketing campaigns, enable greater personalisation and increase return on advertising spend.
- The retail and eCommerce sector will represent 35% of global customer data platform revenue in 2022, as online competition drives enterprise requirements for in-depth customer insights.
- In turn, customer data platform providers must develop new services that cater to online retailers, and investment be focused on creating more efficient personalisation services.
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