Before buying and implementing a customer data platform, it’s important to understand how you’ll use it to solve different pain points.
Most organizations and businesses invest heavily in a cutting-edge platform but do not always get the ROI they hope for.
The problem isn’t the platform itself.
A lack of clear understanding of how to use the platform is the issue, especially when your team isn’t versed in use case development.
In today’s guide, we’ll explore various customer data platform use cases your team can leverage to improve marketing efficiency and drive business growth.
Let’s get to it.
Do I Need a CDP?
Is a customer data platform (CDP) just another shiny new object, or do you really need one?
Here are some top signs that you really need a top-notch CDP:
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- You Struggle with Fragmented Data: If your business struggles to connect fragmented data from various sources, you need a CDP. The CDP can help you harness the power of a 360-degree customer view with data from your CRM, social media, e-commerce tools, offline interactions, and other relevant sources.
- Personalization Is a Headache: You’ll need a CDP if you are unable to offer truly customized services, products, or content to specific customers because you don’t have a unified view of customer behavior, needs, and preferences.
- Your Departments Are Siloed: A CDP becomes necessary if your marketing, customer service, and sales departments work in isolation or with disconnected customer data.
- Compliance Challenges Are Rampant: Ensure to look for a CDP if you struggle to manage customer consent and maintain data privacy regulations such as CCPA or GDPR, due to scattered data.
- Ineffective Marketing: You’ll want to use a CDP if your marketing campaigns are generic. A CDP is also crucial if you are unable to automate workflows and data management or produce insights for effective and efficient sales and marketing strategies.
- Inconsistent Customer Engagement and Experiences: When your customers receive different experiences or information depending on the department or channel they engage with, a CDP is essential to rectify this unfortunate state.
How CDPs Differ from CRMs and DMPs
Because they all include various customer data aspects, it can be easy to mix up CDPs, CRMs, and DMPs.
A CDP is a centralized software tool that gathers, syncs, analyzes, and unifies customer data from different systems to create a consistent and comprehensive profile of each customer.
A Customer Relationship Management (CRM) solution is a platform that manages all the direct interactions a business or organization has with its leads and customers.
The key differences between CDPs and CRMs include:
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- Data Sources: While CRMs get their data from direct interactions, CDPs leverage multi-source types of data, including engagement, behavioral, firmographic/demographic, transactional, and customer feedback.
- Data Activation: CRMs usually feature data that’s limited to the tool only, while CDPs unify multi-source data and share it with other systems for various functions, such as targeted cross-selling or upselling.
A data management platform (DMP) is a software system that collects, stores, organizes, and interprets customer segmentation data from multiple sources, usually for digital advertising purposes.
DMPs differ from CDPs and CRMs in ways such as:
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- Audience and Data Identities: DMPs deal with anonymized data and anonymous audiences, while CDPs and CRMs deal with identifiable individuals or accounts and data.
- Data Retention: DMPs typically store data temporarily for only a few months. CDPs and CRMs retain data longer for long-term usage.
- Function: While DMPs target anonymous prospects with ads, CRMs manage direct customer relationships, and CDPs help with deeper customer personalization.
Depending on your available budget and current or future needs, you can use the three systems. If your most urgent need is to understand your customers better to personalize marketing, go for a CDP.
Key Benefits of a Customer Data Platform
As a business looking to improve customer engagement and returns on investment, you can enjoy the following CDP benefits:
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- Better Customer Understanding: With unified data and 360-degree customer profiles, you can understand each customer better in terms of behavior, needs, preferences, and actions. You can use these comprehensive profiles to personalize marketing and customer experiences, leading to increased customer retention and sales.
- Improved Omnichannel Marketing: 89% of buyers become loyal customers if a business uses the right omnichannel customer engagement strategies. The right CDP can help you improve or start omnichannel marketing through unified customer data, orchestrated buyer journeys, and cross-functional collaboration.
- Improved Data-Driven Decision-Making: The best CDP not only collects and unifies customer data. It also analyzes the data to provide marketers with actionable insights to help them make better decisions on resource allocation and marketing strategies.
- More Efficient Marketing: Your marketers can use a CDP to tap into marketing automation trends that enhance productivity and lead to higher ROI. For example, a CDP with AI capabilities can help your team create content, make data-informed predictions, and produce high-performance campaigns.
The Risks of Not Using a CDP
Without a CDP, your business is at a disadvantage and can experience risks such as:
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- Inadequate data security and privacy since you lack the safeguards a CDP can offer.
- Ineffective marketing due to generic campaigns that lead to low engagement and dismal results.
- Reduced revenue and lower ROI due to missed sales opportunities for upselling and cross-selling.
- Fragmented and siloed data, which can lead to an incomplete and disjointed view of your customers.
- A perpetual lack of actionable insights to improve products, services, and customer engagement strategies.
- Disjointed customer experiences as your website and other systems do not remember past interactions or customer loyalty.
- Poor operational efficiency since it’s difficult and costly to maintain separate databases, and manual data processing can be time-consuming.
- Inability to track customer lifecycles, which means you struggle to understand customer journeys, identify critical touchpoints, and measure performance.
Top Customer Data Platform Use Cases
Let’s explore various CDP use cases that can transform how your business understands and engages with its customers.
1. Marketing and Customer Engagement Use Cases
You can use a CDP in the following ways to engage your customers and market your products or services:
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- Unified Customer Data: Collect and unify customer data from sources such as websites, CRMs, and apps into a single, consistent, and comprehensive profile for each customer.
- Hyper-Personalization: Use the unified data to deliver tailored content, offers, and product or service recommendations across all touchpoints for highly personalized customer experiences.
- Omnichannel Journey Orchestration: Automate and coordinate marketing efforts across multiple channels like SMS, email, and social media to create a consistent and streamlined customer experience.
- Advanced Customer Segmentation: Identify and group customers into highly specific segments based on various attributes, which helps you create more precise targeted campaigns.
- Predictive Analytics: Leverage machine learning and artificial intelligence to forecast customer behavior, such as churn risk, the likelihood of buying, and potential upselling or cross-selling opportunities.
- Retargeting and Lookalike Audiences: Connect customer data to advertising platforms to improve the effectiveness of ad campaigns through more relevant retargeting segments and finding new, similar customers.
2. Business Operations and Strategy Use Cases
Here’s how you can use a CDP to enhance your operations and strategy:
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- Customer Lifetime Value Analysis: Get insights into customer lifetime value and how to improve it through better customer engagement and loyalty.
- Marketing Attribution: Understand which marketing efforts drive conversions and optimize ad spend.
- Enhanced Customer Support: Equip your customer support team with a unified view of customer preferences and interactions for faster, more personalized issue resolution.
- Data Governance and Compliance: Manage data, including cleaning and safeguarding it in ways that comply with regulations like CCPA, HIPAA, and GDPR.
- Strategic Business Insights: Get detailed analytics and reports to understand customer behavior, measure how campaigns perform, and make data-informed decisions.
3. Customer Retention Use Cases
Use your CDP to retain customers through:
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- Churn Prevention: Analyze customer data using predictive modeling and artificial intelligence to identify at-risk customers. Once identified, apply proactive strategies, such as personalized offers and targeted outreach, to retain them.
- Customer Journey Orchestration: Pull data into a segment you can use in the marketing automation tool, such as D365 CI – Journeys. CI – Journeys lets you create and coordinate seamless, consistent experiences across all touchpoints to keep customers engaged and loyal.
- Loyalty Program Optimization: Capitalize on insights to tailor rewards and communication to increase program participation and customer lifetime value.
- Reactivation and Win-Back Campaigns: Re-engage inactive or lapsed customers with data-driven incentives and messaging to loop them back in.
4. CDP Use Cases for Growth
A CDP can help you drive growth through:
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- Customer Acquisition Optimization: Use unified profiles and lookalike modeling to target high-value prospects more effectively across channels.
- Expansion into New Segments or Markets: Use customer insights to tailor messaging and product or service offerings to new demographics, firmographics, or geographies.
- Real-Time Personalization at Scale: Deliver individualized customer engagement and experiences across channels in real time to boost engagement, conversions, and average order value.
- Marketing ROI Attribution: Tie customer actions to campaigns using unified data, helping you budget for the most effective value and growth drivers.
How to Choose the Right Customer Data Platform
When shopping around for the best customer data platform, you’ll want to consider aspects such as:
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- Diverse customer data platform capabilities, including types of data formats covered, identity resolution, data activation, and more.
- Ease of use, including the level of training required and whether it has a user-friendly interface.
- Cost, which can include initial purchase, implementation, and maintenance costs.
- Customer data platform integration capabilities with your existing systems or technology stack, including CRMs, website, mobile apps, and more.
- The opportunity to validate your choice through demos, trials, or Proof of Concept to evaluate the platform against your specific criteria and see it at work in your organization.
Check out our detailed checklist for choosing a customer data platform.
At Coffee + Dunn, we recommend Dynamics 365 Customer Insights as the best CDP for driving growth for your marketing team.
We are Microsoft-certified consultants, and we can help you implement the CDP, including custom training programs and a comprehensive Knowledge Hub for different learning paths.
Partner with Coffee + Dunn now to streamline your D365 Customer Insights implementation for optimal marketing outcomes.
Frequently Asked Questions (FAQs)
Let’s address some common questions marketers usually ask about customer data platform applications.
How Long Does It Take to Implement a CDP?
You can implement a CDP in a few weeks or months, or take a year or more.
The time varies depending on the complexity of your data, the type of CDP, internal resources, and whether you partner with the right CDP implementation partner.
What Are the Costs Associated with a Customer Data Platform?
The costs of a CDP include software license fees, implementation and integration expenses, and ongoing operational costs, such as platform maintenance.
Can a CDP Replace My Existing CRM or Marketing Automation Tool?
Generally, a CDP can’t replace your existing CRM or marketing automation tool because they all serve different purposes.
A CDP unifies customer data for a 360-degree view that informs various strategies, while a CRM manages customer interactions. A marketing automation tool focuses on delivering automated campaigns.
You’ll want to use the three together, integrating the CDP’s rich customer profiles and data insights with the CRM and marketing automation tool to create personalized experiences.
What Skills Are Needed to Manage a Customer Data Platform?
To manage a customer data platform properly, your team needs to have a set of skills that include:
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- Technical skills, such as data management and governance, SQL and scripting, data integration, cloud infrastructure and APIs, and CDP-specific knowledge.
- Analytical and strategic skills, such as data analysis and reporting, marketing strategy, problem resolution, and use case development.
- Basic soft skills, such as proper communication, collaboration, and ethical data handling.
Looking Forward
Now that you understand various key customer data platform use cases you can apply in your business, you’ll want to ensure you choose the best platform for your needs.
We recommend using Microsoft Dynamics 365 Customer Insights, which strikes two birds with a single stone by connecting customer data and journeys for a more holistic approach.
Our experts use our tried and tested Plan-Build-Run approach to help businesses and organisations implement the platform and achieve better outcomes faster.
Schedule your free consultation with us today to optimize your Dynamics 365 Customer Insights implementation.
