The Role of Customer Data Platform in Digital Marketing
Data is the fuel that drives the digital economy, and it forms an integral part of making decisions right from inventory management to recommendations, and from consumer insights to long-term strategies.
As companies have evolved, their data management platforms have also developed, and there are consistent improvements in data integration. Some of the known data management technologies are Customer Relationship Management (CRM), Data Management Platform (DMP), and Master Data Management (MDM).
Most of these have a funnel-based approach that includes the customer’s lifecycle from prospecting to purchase. But with the evolution of customer engagement, there is a need to view the customer lifecycle as an infinite loop.
While traditional data management technologies have enabled the transition of customers through the funnel, the new engagement models require a shift in how data management is being done. The communication and experiences have to be personalized for the customers to drive engagement.
The Corporate Executive Board Company, in its report titled “The Digital Evolution in B2B Marketing,” states that “On average, customers progress nearly 60% of the way through the purchase decision-making process before engaging a sales rep.”
In its 2019 survey, McKinsey showed that those suppliers who provide outstanding digital experiences to their buyers are more than twice as likely to be chosen as a primary supplier than those who provide poor experiences.
In B2B enterprises, there will be a growing need to adopt best practices to drive digital experiences to sell and retain. To achieve this, organizations need to adopt new methods for managing their data that can enable them to have a 360-degree customer view.
What is the Customer Data Platform?
Customer Data Platform is the latest advancement in data management technology. As the name suggests, it captures all the touchpoints of the customer in a single platform. CDP also helps all the business domains take action for their customers based on past connections with the company.
The Customer Data Platform collects and organizes data from all the touchpoints where a customer interacts with it.
As quoted by Hubspot, “A customer data platform (CDP) is a software that aggregates and organizes customer data across various touchpoints and is used by other software, systems, and marketing efforts. CDPs collect and structure real-time data into individual, centralized customer profiles.”
Though it was developed in 2013, CDP is still new for most of the B2B companies today. While they are aware of the technology, they might not know how to leverage it or develop the technology in-house. Other reasons why the adoption of CDP might be a deterrent include cost implications, benefits, and overall management.
These questions arise because of the lack of awareness about CDP in the market.
(source:https://trends.google.com/trends/explore?date=today%205-y&q=customer%20data%20platform)
44% of the organizations surveyed by Forbes Insight Report stated that they are using CDP to build customer loyalty (Forbes, 2019). This is collaborated with an increase in the search volume CDP starting in the year 2018.
A comprehensive visualization below shows how a Customer Data Platform looks like.
CDP captures data from all the sources including primary and secondary data, which was a hiccup when Data Management Platform (DMP) was discussed.
Account-Based Marketing (ABM) is a B2B marketing strategy focussing on identifying accounts that can be potential customers. These accounts are then targetted with the help of DMP, which only gathers tertiary(third-party) data and sometimes secondary data. It is unable to map the information to the primary account instead of mapping it to an anonymous account. This leads to a segment-based targeting that may work for all customers in the cluster or may not even work for a single customer.
How will CDP drive customer experiences?
For B2B marketers, the opportunities a CDP offers are as under:
1. Lead Generation
B2B enterprises utilize ABM and Data Management platforms to build strategies for generating marketing leads and identifying anonymous accounts for various marketing campaigns. But CDP helps to unify data at a single place and to identify specific accounts, based on touchpoints, for better lead generation.
2. Nurture Leads
Various programs like personalization and re-targeting are easier to implement with the presence of customer data platforms. Based on the browsing behavior of the customer, it helps identify the interest and hence, recommends similar products real-time.
3. Customer Retention
Depending on the past engagements with the company or identifying at which stage of the marketing lifecycle a customer stands, various loyalty, cross-sell, and up-sell campaigns can be built and targeted.
4. Awareness
Awareness campaigns to promote the brand, and content based on the goal of the company can be strategized to have a positive impact on revenue generation in the long run.
These are opportunities as well as challenges for most B2B companies. Challenges can be anything ranging from a severe lack of skill to a lack of competency. Many companies have the infrastructure to accommodate CDP but lack the knowledge in terms of implementation to come up with a solution.
For example, an e-commerce company has data captured from all possible sources such as web browser data, customer information, social media data, Salesforce, etc. but they all exist in siloes. The company lacks the knowledge to utilize and create a customer journey to come up with recommendations or to increase the engagement with the website, or to give personalized experience based on past browsing behavior.
Here, creating a customer data platform can solve the challenges by identifying unique identifiers that will connect all the data sources and hence, create a customer journey for every touchpoint with the company.
Conclusion:
Customer Data Platforms will be the emerging technology enabler for digital marketers in the coming years. The capability to provide a single customer view across touchpoints will enable marketing to drive business goals by using CDP. But it may not be a panacea to all the challenges as CDP in itself will not drive improved digital experiences. It will act as the backbone of the digital marketing ecosystem, which will provide data for driving digital engagement strategy.
Authors: Akanksha Jain & Nishant Khanna
