Last Updated on May 10, 2022 by James Ewen
Why Using A Customer Data Platform Will Take Your Customer Experience to the Next Level
There’s no shortage of marketing tools that capture and analyze customer data. The problem? When businesses analyze customer data, each data set is usually treated as a standalone. But siphoning through data set after data set can be costly and inefficient.
So, how do marketers combine different data sets into a single customer view?
They use customer data platforms (CDPs).
What are CDPs?
CDPs are data platforms that capture data from various sources and display it in a single unified customer database. In other words, they consolidate and integrate customer data into one central platform. This way, businesses can pull insights on a specific customer or prospect during various points of the customer journey.
Like all marketing tools, businesses use CDPs to understand their customers’ unique preferences and behaviors.
But what sets CDPs apart from other tools is their ability to help businesses create customer-centric experiences.
CDPs give businesses the data they need to create relevant messaging — all in one place, in real-time. This helps them create messages that are custom-tailored to their customers’ preferences. When customers feel like a company knows them, they’re more likely to stick around.
Let’s take a closer look at how you can use CDPs to take your customer experience to the next level.
Building a sales process
Using a customer data platform can be invaluable to building a sales process that entices your customers to say “yes” without resorting to slimy tactics.
Below, we’ve listed a number of ways businesses can use CDPs.
1. Map out the buyer’s journey
Buyer journeys aren’t simple straight lines that lead to a sale. They zig, zag, turnaround, and zig again.
Today, a buyer’s journey could start on one channel and toggle between several steps. Knowing how that journey ebbs and flows gives your organization a chance to ensure no customer slips through the cracks.
That’s why it’s essential to map out your company’s buyer’s journey.
Every step and interaction a customer goes through during the buyer’s journey produces customer data.
Businesses that study these interactions and look for patterns can predict future buying habits. Understanding this behavior shows you what customers align with and what turns them away.
To sum up: Understanding what actions customers complete before or after purchasing helps you nurture leads and create more enjoyable customer experiences.
2. Craft customer-centric sales funnels
Mapping out the buyer’s journey and analyzing customer behavior gives you a competitive advantage.
When you can predict customer behavior, you’ll be able to:
- Understand buying habits
- Share relevant offers
- Personalize content
- Build long-term customer relationships
- Speak to customers in their preferred communication style
You’ll also be able to craft customer-centric funnels.
Customer-centric funnels use the data you mapped in your buyer’s journey to take customers through a personalized sales experience.
Each stage of the funnel is personalized for your customers. Some people will need more nurturing before making a purchase, while others won’t need much coaxing at all.
For instance, some customers will need a whole series of offers while others will buy after just two.
Funnels also take some of the pressure off your sales team and create passive business revenue.
If done well, they also help you build long-term customer relationships and repeat sales.
3. Analyze detailed customer profiles
The most valuable part of a CDP is the personalized customer profiles. These in-depth, single customer view profiles are what set CDPs apart from other systems.
Profiles detail each person based on data pulled from an array of channels. This means wherever your customer is — you are. Whether they’re in person or online, you have a compilation of their behaviors and preferences.
This helps you craft unique experiences you know a customer will love.
In the end, customers want to be seen as individuals, not as lead prospects. It can get cloudy when you’re analyzing data. Sooner or later, prospects look like sales targets on a spreadsheet. But CDPs have the distinct ability to create comprehensive profiles that feel human.
Every data point serves a purpose, is cleaned, and deduplicated. Next, the datasets are grouped together by theme. Finally, the data generates a unified customer profile.
In a CDP customer profile, you’ll see details such as:
- Their behavior
- Their engagement
- How they feel about your business
- If they’re a frequent user
- If they’re likely to re-engage
- Their likes and dislikes
Personalizing marketing content and promotions
Understanding customer behavior and preferences is essential to personalizing the content that enhances the customer experience.
CDPs help businesses such as SaaS content marketing agencies personalize content and marketing promotions in a number of ways.
1. Relevant messaging
Customers don’t engage with campaigns that aren’t personally relevant. The data you collect from a CDP helps create relevant messaging your customers will connect with. Relevant messaging through target campaigns increases customer experience and loyalty.
For instance, Millennials prefer different messaging than Baby Boomers. Baby Boomers prefer different messaging than Gen Zers.
2. Content optimization
Understanding your customers also helps you optimize content to match a customer’s search intent. This helps you produce the right content at the right time.
You own a simple skincare brand, and you’re looking to increase your product base. Before you start getting creative in a lab, you analyze customer data in your CDP.
After noticing a series of patterns, you realize that your customers are searching for:
- Sun protection sets
- Bath bombs
- Jade rollers
- Beard oil
Not only does this show you what products to create, but it also shows you which target phrases to optimize your content around.
You use those target phrases to plan out content briefs, research secondary keywords, and prepare SEO plans.
By the end of your preparation, you’ve planned out three months worth of:
- Topics to target
- Secondary keywords
- Frequently asked questions to answer
- Content scores to target
- Sales copy
- Blog article outlines
- Social media content
Along the way, you continue to keep an eye on your customer data. If you see a change in pattern, simply adjust your content as needed.
This commitment to custom tailoring content to customers’ preferences enhances their experience with your company.
While every customer has their own preferences and behaviors, it’s common for many to exhibit common patterns.
CDPs give you tools to define your audience by segments based on these shared attributes and behaviors. Segments are based on rules, or they’re built using machine learning and AI. With these tools, you can enrich customer profiles with data you wouldn’t be able to gather on your own.
With the segmenting features, you can:
- Predict customer churn
- Deliver relevant recommendations based on buying history
- Identify customer advocates and frequent buyers
- Identify similar patterns
- Identify upsell and cross-sell opportunities
- Segment your customers using common attributes
- Tailor messages to those segments
Businesses can use CDP segmentation tools to optimize the entire customer journey from discovery to advocacy.
To analyze and segment profile data, look for a CDP that has:
- Prebuilt code
- Visualizations that feel intuitive
- Out of the box features
- 24/7 customer support
An example of audience segmentation
Let’s imagine that your business sells digital courses on personal and career development. You just set up a CDP, and you’re looking forward to trying the audience segmentation features.
After identifying customer patterns and behaviors, you notice you have three main types of customer patterns:
- Frequent buyers that mainly buy career development courses
- Infrequent buyers that mainly buy personal development courses
- Moderate buyers that buy a mix of both
This insight helps you segment your customers into the following customer avatars:
- Career development customers
- Personal development customers
- Career and personal development customers
Later, you improve your marketing strategy to cater to these three customer avatars. You have three different kinds of social media campaigns, email newsletters, landing pages, websites, and paid ads.
You can also repurpose content over time by launching a podcast or producing videos, for example. After this: This helps you produce the right content at the right time.
For your career development customers, you:
Focus your content on career advancement, job skills, and networking tips.
For your personal development customers, you:
Focus your content on personal growth, coping skills, and building self-confidence.
For your career and personal development customers, you:
Focus your content on how personal growth contributes to career growth.
At this point, your content strategy is laser-focused and serves your three most common types of customers.
Over time you keep an eye on behaviors and make adjustments when needed. You also keep an eye out for new customer avatars and buying habits.
Isn’t a CDP just a CRM?
CDPs and CRMs both work with customer data, but the two are pretty different.
You may have wondered, “Why do I need a CDP? Isn’t a customer relationship management tool (CRM) the same thing?”
It’s actually not.
While CRMs contain data you already know (i.e., name, email, and zip code), CDPs collect data you wouldn’t know over a specific time.
But there are more differences between the two tools.
Here are some major differences between a CDP and a CRM.
1. Data capacity
CRMs were intended to keep track of customer and prospect interactions to automate the process for sales teams. They’re great for sales and marketing teams that need to pull customer information quickly.
CDPs are great at handling large amounts of data from various channels.
2. Known data
CRMs only contain known data — they won’t be able to pull anything on potential customers you’ve never met before.
CDPs work with both known and unknown data making them more valuable than most martech tools.
3. Storage information
CRM data stores simple information into a few fields — almost like a flashcard. It includes basic customer information such as name and contact information.
CDPs have detailed information about a customer’s buying patterns, online and offline activity, and behaviors.
4. Data format
CRMs can’t handle data in a free-flowing manner. The system can only recognize data if it’s formatted in a specific way (i.e., a CSV file).
CDPs take information from several sources and act as a central hub for customer data. They can handle both simple and robust information while also making sense of complex data. This includes online and offline data and behaviors.
5. Monitoring and engaging
CRMs are helpful for monitoring and engaging with customers and prospects throughout all phases of the buyer’s journey. They work well at managing contact information and also have automated workflows and reports. Solopreneurs and small teams often use CRMs.
CDPs are helpful for tracking all aspects of customer behavior on and offline. They pull information from various sources for customers you know and don’t know alike. They help you segment audiences and refine your messaging. Startups, mid-size, and large companies use CDPs.
Which tool is better for customer experience — a CRM or a CDP?
While CRMs are helpful for engaging with customers at various parts of the customer journey, they’re still limited on information.
The more detailed information a company has about their customers, the more insight they have as to what those customers crave.
First, you have to know what their pain points are. Then, you have to craft messages that align with customer needs. But a CRM can’t help you with that. It can help you manually look up customers and engage with them directly, but it doesn’t use machine learning or artificial intelligence to scour customer behaviors.
That’s why, in the end, CDPs are better tools for enhancing the customer experience.
Ready to transform your customer experience to the next level?
Customer experience affects every aspect of success, making CDPs invaluable to a business.
With a CDP, you’ll understand how your customer thinks, what they’re looking for, and what they like. You won’t need three tools, and multiple data set extraction tools. Instead, your CDP will pull information from various channels for you.
Not only does this save you time, but it also helps you understand how to reach your customers in a profound way.
From knowing how to craft messages to building long-term relationships, a CDP is every business’s trusted tool for up-leveling the customer experience.