In the early days of the digital, everything was simple. We managed our work with websites, basic customer information, and a few marketing tools. But like all fairy tales, this one came to an end. Over time, business got more complicated. With the advent of social media platforms, mobile applications, and countless sales channels, customer data exploded, scattering everywhere.
Most customer data — rather like Cinderella and her slippers — has remained separated ever since.
Amid this chaos, CX began to drift away from its promised perfection. Since then, customer data platforms (CDP) have emerged, offering a magical solution to the data management headaches caused by rapidly multiplying customer channels by bringing customer data together and making it actionable.
Why invest in CDP?
Data fragmentation is a worthy villain in the customer data management space. A customer tells one story while browsing your website and a completely different one when speaking with a contact centre. Each system and department knows the customer from its own perspective. There is no unified view of the customer.
And when communicating with them, these silos become a hindrance. This is where the CDP should be the first step towards a happy ending.
How does a CDP work?
Think of a CDP as a Rumpelstiltskin-type character from the Brothers Grimm fairy tales. It collects the data and weaves it into gold. How does this happen?
Data collection: The CDP collects data from all channels that customers interact with. It brings together data from various sources, such as the website, mobile application, contact centre, CRM, and physical stores.
Data integration and identity resolution: The CDP creates a “single customer profile” by combining all traces left by your customers across different devices and channels. Using deterministic and probabilistic ID resolution mechanisms, it unites customer interactions from different devices, and online and offline sources.
For instance, the transactions of the same person on different devices are matched using email addresses or behavioural patterns and combined into a single profile. This technology enables cross-device, cross-brand, and cross-domain tracking, combining the customer’s journey under one profile.
Analysis and Segmentation: The data collected by the CDP covers both known customers and also works effectively with anonymous users. Even if a customer visiting your website does not log in, an anonymous profile is created using browser cookies and device IDs. When they later identify themselves (for example, by opening an email or filling out a form), this anonymous profile is merged with existing data and enriched. All anonymous or known profiles are analysed on the CDP, and meaningful audiences are created by combining all offline and online data.
Activation: A CDP makes the audiences you create transferable to advertising channels, marketing automation tools, customer services, or sales teams.
How does a CDP benefit your organisation?
The CDP does more than collect data at each step of the customer lifecycle. It boosts return on investment (ROI) on advertising spend, deepens customer engagement, and increases customer lifetime value, enhancing effectiveness.
Additionally, it optimises segmentation processes, improves operational efficiency, and speeds up data processing, contributing to greater efficiency.
Aim for a happy ending…
CDPs do more than organise your data; they allow you to build stronger, more meaningful connections with your customers. Because, as with every fairy tale, at the heart of this story are the people. It’s in your hands to turn every interaction into an opportunity and every piece of data into a meaningful story.