You may be more familiar with CRM or DMP solutions, but a CDP is a next-generation data processor that gives you vastly more flexibility than either of these options. Read our guide to the differences between CRMs, DMPs and CDPs to get more insight into what sets each solution apart.
We’ve put together a list of some of the benefits of using a CDP below…
1. Fully understand your customers
CDPs give you a 360-degree view of your customers, collecting masses of information from multiple data sources. This data can include conversion information, behavioural information such as browser interaction data, and geographic or psychographic data. Your CDP can be used to get an accurate picture of your customer base and how they behave, allowing you to accurately communicate with them and predict their behaviour based on past interactions.
2. Personalise your communication
One of the primary reasons a CDP is so useful is that you can use the huge volume of data you’ve collected to create hyper-personalised communication. Personalising their experience makes your customers feel more valued and delivers tailored interactions with your brand. With 70% of millennials frustrated by irrelevant communication and in a world where marketing messages may feel generic, being able to offer your customers personalised communications can help cut through the noise and create a meaningful relationship that builds repeat business and advocacy.
3. Segment marketing campaigns
Not all campaigns work for all customers, so being able to analyse, test and refine campaigns based on data you’ve collected can help you successfully segment your audience and create targeted communications. Whether you’re looking at demographics such as age or location, or psychographics such as interests or opinions, you can slice your audience in many different ways as you want to create highly-targeted lookalike groups to create specific messaging for.
4. Automate processes
A CDP collects, filters and organises customer data, making it easier to automate processes in your marketing activity; such as loyalty programmes, renewal campaigns, or targeted discounts. These efficiencies allow you to streamline your activity and concentrate on aspects of your efforts that strategically push your business forward.
5. Manage multiple channels
With all your data neatly collated in one place and the right set of marketing tools at your disposal, you can use your CDP data across all of your marketing channels to create effective marketing campaigns that increase your reach exponentially over single-channel marketing.
6. Measure eCommerce success
Since a CDP holds all your data in one place, it’s also an incredibly effective analytics tool to measure conversion rates on your marketing activities. Measuring the effectiveness of your communications in real-time will allow you to adopt a ‘test and learn’ approach without spending valuable marketing dollars on ineffective campaigns.
As the saying goes, ‘you cannot manage, what you cannot measure’ – a CDP will help you gain a better understanding of which campaigns are driving business success.
7. Increase your customer lifetime value
It’s generally acknowledged that it’s between five and 25 times more expensive to attract a new customer than it is to keep an existing one. Nurturing customer relationships through personalised communications will allow you to build long-term relationships with your existing customers and increase their LTV (Lifetime Value). Your CDP will help you learn which of your customers represent the highest conversion value and allow you to target them with special offers, early access sales, or discount codes, for example.
8. Create timely marketing messages
Having a CDP is all about reaching customers at a time when they are ready to buy. A CDP allows you to optimise strategies for reaching customers at the right time with a message that’s likely to lead to conversion. By identifying patterns in your database of existing customers you can more accurately target customers at a time they’re ready to buy.
9. Increased consumer engagement
If marketing communications accurately address your customer’s needs, then those customers are far more likely to engage with your brand. You can target them with the most relevant products and services about any number of factors, such as age, lifestyle, or family situation. In a 2020 study, 70% of companies that used advanced personalisation said that they earned 200% ROI or more from it.
10. Keep your customers’ data secure
Almost 90% of people surveyed by the Confederation of British Industry (CBI) said that businesses that protect their data will win their custom. A CDP allows you to hold all of your data in one place, reducing the likelihood of hacks and data leaks and keeping your customer data safer.