What is a customer data platform?

So what exactly is a customer data platform?

As customers we generate massive volumes of data as we engage across multiple channels using different devices which makes it challenging to capture, integrate and activate this data effectively.

Data repositories are often siloed and not integrated with each other or allow easy transfer of data to marketing platforms. Let us now throw in some GDPR and updates from Apple with identifier for advertisers (IDFA) and the deprecation of third-party cookies by Google.

Today’s customers simply assume that your company knows and remembers who they are, what they have done, and what they want, always and across all channels. Their expectations are high, and tolerance is low. So it is not surprising to see that many marketers have made a unified customer experience their highest priority.

What’s the problem with data?

Not having a single customer view creates many challenges including:

  • Making it more tedious to activate campaigns to the right audience and report on them in a timely manner.
  • Degrades customer experiences.
  • Introduces privacy concerns.

Marketers and marketing technologists know that gathering and acting on unified customer information is not easy. In fact, only a small percentage of companies have achieved this and can truly operationalise their first party data. The rest are battling with technology, strategy, budgets, organisations, staff skills, and other obstacles to success.

Traditional methods for collecting that data into unified customer profiles, such as an enterprise data warehouse, have failed to solve the problem. Newer approaches, like “data lakes”, have collected the data but failed to organise it effectively and enable marketers to activate the data into owned and paid marketing channels.

The Customer Data Platform is an alternative approach that has had great success at pioneering companies. The process of collecting and unifying the data is known as identity resolution which is a core building block for enabling better customer experiences and optimised marketing effort. A CDP puts your marketing team in control of the data unification project, helping to ensure it is focused directly on marketing requirements.

CDPs apply specialised technologies and pre-built processes that are tailored precisely to meet marketing data needs. This allows a faster, more efficient solution than general purpose technologies that try to solve many problems at once.

Customer Data Platform Definition

“A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems”.

This definition has three critical elements:

1. “packaged software”: the CDP is a prebuilt system that is configured to meet the needs of each client. Some technical resources will be required to set up and maintain the CDP, but it does not require the level of technical skill of a typical data warehouse project. This reduces the time, cost, and risk and gives business users more control over the system, even though they may still need some technical assistance.

2. “creates a persistent, unified customer database”: the CDP creates a comprehensive view of each customer by:

  • Capturing data from multiple systems.
  • Linking information related to the same customer.
  • Storing the information to track behaviour over time.

The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results.

3. “accessible to other systems”: data stored in the CDP is then made available to other marketing systems for analysis and to manage customer interactions.

What should a customer data platform do?

In essence, a customer data platform combines all your customer data from online/offline sources and unifies this into a single customer view to enable cross-channel activation and personalisation.

A CDP should integrate into existing and future marketing/advertising technology enabling you to decide which channels to communicate with your customers.

It should enable automated reporting of activity on your key marketing metrics. And of course, it should support GDPR enabling you to check customer consent, action subject access requests and the right to be forgotten.

How does a customer data platform work?

UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.

The identity resolution process: are customers turning into chameleons?

It may be noticeable that, like chameleons, they are becoming harder and harder to identify. And there is a reason for this. They are constantly changing their personal identifiers, like email, mobile numbers, or cookie IDs. The process to properly identify individuals we call “identity resolution”, and failures in identity resolution may sometimes have quite negative consequences.

Customers actively dislike not being recognised, for instance being treated as a new recruit when in fact they have been buying from you for years, or being sent the same message twice, and in addition to that there is a cost for the organisation with added communications costs.

Lack of good identity resolution processes also makes a nonsense of trying to calculate customer lifetime value or undertaking forward business planning based around your expected rates of recruitment and attrition.

 

So what does a good identity resolution process consist of?

We see it as matching all available personal identifiers, from every one of your customers, to get the best possible chance of joining your customer data inputs from multiple sources into actual customer records.

This used to be a relatively straightforward task when the main personal identifier was the postal name and address, although that in itself posed some considerable challenges.

With the usual mix of badly typed addresses, varying address structures, and incorrect postcodes we often find there is a problem just within name and address matching. In a recent case we found 25% name and address duplicates.

But the postal address is just one of multiple personal identifiers, each of which can change at any time.

We have all become identity chameleons, changing our mobile numbers, emails, cookie IDs etc with great regularity.

There is however a relatively simple solution – just keep hold of all the personal identifiers you have been able to link to each individual since you first recognised them, so that you have the best possible chance of identifying them when the reappear.

This is exactly what our cloud-based customer data platform does with the data it ingests; as each individual item of customer data is taken in, its identifiers are matched across the entire customer base.
an example of cdp identity resolution

If you think that you may have an identity resolution problem with your customer data, we can offer you a very low-cost solution; we can trial match all your customer data sources together in UniFida, and report on the amount of duplication that exists between them.

This will tell you how many customers you actually have, and how many duplicates you are carrying.

 

UniFida logo

UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Our data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed, and our ambition is to help our clients stay empowered and ahead in this challenging environment.