As the COVID-19 pandemic transforms from an acute crisis to an ongoing health concern, it’s clear that consumer behavior has permanently changed. Now, more than half of US adults buy something online at least once a week. Ecommerce retail sales in 2022 will exceed $1 trillion. While consumers are staying online, the customer data landscape is changing, with more privacy controls and less third-party data available on the horizon.
Retail success now requires meeting customers in the moment when they’re making buying decisions and giving them something of value, like information, personalized recommendations, or offers that meet their needs. Serving customers in these moments requires data-driven insights that can suggest the next best steps in real time to drive acquisition and build loyalty. With so much data available, unifying and analyzing it can be a huge challenge — a challenge the customer data platform (CDP) is designed to meet.
CDP, CRM, MDM — what’s the difference?
There are dozens of solutions marketed as CDPs, but the term has no standard definition yet, so it’s up to the buyer to understand what each product offers. For example, some CDPs excel at unifying data for customer profiles but lack the artificial intelligence to drive real-time actions. Others are great at capturing data to deliver the next steps fast but lack customer data-merge capabilities.
There are also similar platforms that offer related but not identical functions. What sets true CDPs apart from master data management platforms (DMPs) and customer relationship management (CRM) solutions is the ability to activate unified data in real time — within milliseconds — for marketing use cases.
CDPs and third-party data deprecation
Solutions calling themselves CDPs have been around for about a decade, but as of 2021, a Capgemini survey found that only 45% of marketers had access to a CDP. However, the CDP adoption trend is heating up now because of marketers’ concerns about the deprecation of third-party cookies. CDP adoption can help companies collect and leverage first- and zero-party data after third-party cookies disappear. The right CDP can help marketers build a data strategy based on their first-party data to improve customer acquisition, personalization efforts, and loyalty programs.
CDPs enable data-driven marketing for better performance
The same survey found that only 11% of marketers fit the definition of “data-driven” based on data- and technology-related factors. However, that group of marketers outperformed the others in the survey in four key areas:
- Real-time marketing initiative capacity and value extraction
- Business outcomes derived from real-time data
- Understanding customer needs
- Creative solutions for customer engagement, content, and personalization
These areas came together for one hospitality, restaurant, and retail enterprise, which used a CDP to unify its siloed customer data into single-source-of-truth profiles shared across the organization’s divisions and updated in real time. Now, when a guest checks into one of their hotels, they’re given a personalized welcome that can include related offers that make sense in context.
For example, if the guest were browsing tickets to a nearby concert before checking in but didn’t buy those tickets, their check-in folio can include a discount offer for the show. If they chose to go to the concert, the CDP might generate a text offer during the event for a deal at one of the company’s restaurants that’s a short walk from the concert venue. Finally, the customer might get an email the next day thanking them for attending the concert and offering a deal on the artist’s new music at the company’s retail outlet. In other words, what could have been a single hotel stay has the potential to become four transactions driven by data in real time.
Considerations when choosing a CDP
The CDP is central to effective real-time marketing efforts and to future-proofing the marketing program. Because of this, and because there are many different types of CDPs on the market with different strengths and weaknesses, it’s important to determine what you need first, then select a platform and implement it in the way that makes the most sense for your goals.
Start with the use cases the solution needs to address. For example, real-time capabilities require identity resolution and the ability to link anonymous customer behavior to known profiles. Not every CDP offers this, so it’s important to vet the options carefully and in detail. Once you’ve chosen your platform, set your implementation priorities. There are two key reasons to be selective about implementation.
First, turning on real-time capability only where it’s needed helps you avoid creating an overly complicated architecture that can be difficult to set up and maintain. Second, real-time tools should deliver the value that customers expect in context. Thinking back to the hotel example, the hotel didn’t bring in data from the customer’s most recent online grocery order to serve in-store offers, which would have been irrelevant and possibly unsettling. Instead, deals were offered in the context of their hotel stay and the nearby concert.
Choosing a robust CDP like Adobe Real-Time Customer Data Platform for your business needs and deploying it to focus on solving those needs can help you meet customers in the moment to deliver more value and build more loyalty now — while also allowing you to pivot as data sources and customer expectations change in the future.
Lee Dempsey is a principal and capabilities leader in Capgemini’s digital customer experience (DCX) practice. He is responsible for all Adobe and martech platforms for digital marketing and content management engagements across North America. He brings extensive experience engaging with executives at the C-suite and VP level to understand their business strategies and problem areas and to identify opportunities for improvement. Dempsey has more than 30 years of experience selling and delivering business and technology solutions to large organizations in a wide variety of industries, including retail, consumer products, healthcare, life sciences, insurance, financial services, telecommunications, education, and government. His focus the past 10 years has been on digital solutions, including web content management, digital marketing, ecommerce, and web/mobile development.