It is very commonly said that successful companies listen to the voice of their customers. For example, Amazon’s CEO Jeff Bezos, has repeatedly said that Amazon’s obsession with their customer and their commitment to fulfilling their needs is what makes the company so unique. Furthermore, there is evidence that customer-centric enterprises outweigh their competitors in market capitalisation. The importance of customer-centricity is the reason why enterprises invest in IT systems that support them in targeting the individual needs of their customers in processes like sales, marketing, and customer services. As a prominent example, many enterprises are employing CRM (Customer Relationship Management) systems, which help them plan, automate, and deploy efficient customer segmentation, personalized marketing, and tailored customer service strategies.
CRM systems are among the most popular enterprise applications. However, there are cases where they fall short, especially when it comes to collecting, consolidating, and processing very large volumes of data from many different sources. In recent years, CRM systems are complemented with new types of enterprise platforms, namely Customer Data Platforms.
Customer Data Platforms (CDP) combine data and information from many different software modules towards creating a unified customer database, which is accessible to all the enterprise systems of an organization. In the scope of a CDP customer data from different touchpoints are collected, cleaned, and aggregated, to enable accurate profiling of every customer. In most cases, the customer’s profile is based on structured data, which provides accuracy and clarity to other enterprise systems that make use of it.
One may argue that most of the above-listed functionalities of a CDP are already offered in the scope of a Customer Data Warehouse (CDWH), which is a core element of every CRM system. A CDWH is an analytical database, which consolidates customer information from many different sources, including all customer interaction touchpoints. On top of a CDWH, a CRM system enables the execution of data mining techniques (e.g., clustering of customers), which facilitate customers’ profiling. Likewise, it also enables sophisticated analytical processes like OLAP (On-Line Analytical Processing). However, CRM/CDWH solutions are associated with some proclaimed limitations that CDPs come to alleviate:
In practice, CDPs integrate CRM systems as one of their main sources of customer data. However, CDPs integrate customer information from other systems as well, including social media platforms, e-mail servers, e-commerce systems and other databases that comprise customer data. In this way, CDPs facilitate tracking of entire customer journeys, rather than being limited to sales and marketing processes.
The rise of CDPs is largely due to the explosion in the amount and variety of customer data, as well as due to their rising importance for sales, marketing, and other business operations. In principle, CDP collect, aggregate and manage the following types of customer data:
Finding a reliable CDP provider is a key prerequisite for a successful CDP deployment. In many cases, companies must employ a CDP consultant as well. This is because there is commonly a need for modeling customer data, defining customer data sources, and planning for the right customer analytics. Hence, it is always a good practice to look for CDP vendors and consultants with a proven track record and good reputation.
If you truly believe in customer centricity it is worth understanding CDPs and how they can elevate the productivity of your customer-oriented processes. It is also important to understand how CDPs are different from legacy CRM and marketing automation systems. Once you do this, the merit and need for investing in CDPs will become crystal clear. We hope to have motivated you to research more about CDPs and the business benefits they can deliver.
Top Five Technology Predictions for 2023
Federated Machine Learning: Enabling Collaborative learning
B2B data sharing: Driving Business Insight and Innovation
Embedded Finance: Enabling New Customer Facing Intelligence
The Last Mile of the Connected Customer Journey
Leveraging 5G technology for optimum business growth
Optimal Neural Network Architectures for Edge AI
Cobots: Robot Human collaboration for Industrial Applications
Blockchain technology for decentralized data provenance and traceability
We're here to help!
No obligation quotes in 48 hours. Teams setup within 2 weeks.
If you are a Service Provider looking to register, please fill out this Information Request and someone will get in touch.
Outsource with Confidence to high quality Service Providers.
If you are a Service Provider looking to register, please fill out
this Information Request and someone will get in
Enter your email id and we'll send a link to reset your password to the address
we have for your account.
The IT Exchange service provider network is exclusive and by-invite. There is
no cost to get on-board;
if you are competent in your areas of focus, then you are welcome. As a part of this exclusive