The Evolving CDP: What Retailers Need To Know
By Tom Treanor, CMO of Treasure Data
Data is the final frontier for marketing. The best way to earn people’s attention in the age of information is through hyper-relevant, personalized content. And the only way to deliver personalized content is through mastering data, both internally and from customers.
This imperative to put data to work is sending marketers rushing to Customer Data Platforms (CDPs). In its recently issued 2021 report, the CDP Institute estimates industry revenue will reach $1.55 billion in 2021, a 20 percent increase over 2020.
In other words, we’re deep in the hype cycle for CDPs right now. Before your organization invests, it’s crucial to make a clear-eyed assessment of these platforms. Let’s cut through the hype and look at what CDPs can do now and what they’ll be capable of in the future.
What Is A CDP?
A Customer Data Platform is a marketer-controlled database that brings together data from multiple sources across the organization. The platform enables marketers to consolidate data, reconcile duplicates, run analysis, and ultimately, better personalize their marketing.
CDPs can connect with data from a wide variety of sources, including Google Docs, Excel spreadsheets, marketing automation platforms like HubSpot and Marketo, ad platforms like AdWords and AdRoll, and many, many more.
What Do Retailers Do With A CDP?
There are hundreds of use cases for a CDP — it’s an extremely versatile tool. The most common use case that marketers start with is getting a 360-degree view of customers.
For example, you may have a record in Google Analytics of someone visiting three specific pages on your site. Then you might have an email address in your email newsletter, stored in your CRM. Then your customer service team might have a record of a specific call, and your brick-and-mortar store has the record of someone making a specific purchase.
By connecting all these data sources to the CDP, you can see that all four of these people are the same person. You can understand better how they went from exploring options to making a purchase decision. You can then automate more personalized follow-up to customers who fit that profile, and over time refine your personas and get a better map of the customer journey.
How Should Retailers Get Started With A CDP?
As the CDP market is still a young one, most retailers aren’t using their CDP to its full potential. That’s to be expected, and it’s okay to start slow. Don’t worry about using every bit of functionality; focus on just the few use cases that you feel will make the most difference in your marketing.
Connect a few data sources within your department. Add in data across silos if you can — customer service and sales are the best places to start.
So, start slow, but do get started. As data becomes ever more central to marketing, CDP adoption is only going to grow. I believe it will be a fundamental requirement of business soon. Customers are going to want more personalization, businesses are going to need more efficiency, and data drives both of those needs.
What’s Next For CDP?
CDPs are continuing to grow and evolve in ways you would expect: More sophisticated analytical capabilities, more compatibility with more data sources, more intuitive interfaces. Beyond that, there are two trends retailers should prepare for:
- Data-Driven Everything. Data isn’t just for marketers, and a data-driven approach to business will extend far beyond the marketing department. Retailers can help bring data-driven decision making to the entire business — HR, store configuration, web optimization, support centers, and more — to help further consolidate data for even smarter analysis.
- The internet of Things. IoT devices are already a major source of data for huge B2B industries like transportation, renewable energy, and construction. As these devices continue to proliferate in the consumer environment (think “smart” thermostats, door locks, coffee makers, etc.), they will become a rich source of data for retailers, especially those with connected brick and mortar locations to analyze inventory, foot traffic, interactive marketing, and other critical aspects related to sales.
Customer Data Drives The Most Effective Marketing
Consumers are now accustomed to personalized content. From Facebook to Amazon to Twitter, algorithms constantly use their previous habits to serve up the most relevant videos, posts, or recommendations.
As such, people expect tailored, relevant content from marketers, content that reflects their ongoing relationship with the brand. Anything less is an annoyance to be ignored in favor of the brands that are getting it right.
CDPs make it possible to deliver that quality of content at scale, and they’re only going to get better at it as they continue to evolve.