What is a customer data platform (CPD)
A customer data platform is a relatively new tool for marketers that is designed to cull far-flung
data about customers across silos and systems and then provide a unified view of a customer
and his or her behavior into an always-processing profile, according to the Customer Data
Platform Institute (CDPI), which was founded in 2016 and is financed by industry vendors.
Earley cites this organization in his paper.
“The CDP acts as a centralized clearinghouse and repository for all sorts of data from various
internal and external systems. Consider any place where a customer interaction is recorded,
tracked, or managed. Past purchases constitute a big category of customer behavior, of
course. But so do social media interactions and website visits, even when nothing is actually
purchased. Collectively, this data produces signals that can be thought of as ‘electronic body
language,'” Earley writes.
“Some data is reasonably straightforward (such as name, address, and demographic details).
However, some information requires processing and interpretation. Clickstream data, for
example, tracks part of the customer journey and can be very informative, but understanding
what it means requires effort and human intervention. Data about website behavior can be
stored in a CDP, but the dataset is large and has numerous components that are time- and
context-dependent,” Earley says.
What a customer data platform reveals
Earley lists four basic functions of a customer data platform:
They can summarize and analyze hundreds of log lines from a customer’s website visit
to detect interests and trends.
They can accommodate different data types and formats that might have varying
structures and naming conventions. whether that data comes through a live feed via an
API or web service layer, a batch basis through a file transfer, chat logs, Facebook
conversations, tweets, and even Instagram images.
They can cleanse and process data by eliminating redundancy and reconciling missing
details or incorrect data with another system.
They allow other systems to access data, which saves, for example, constantly
repeating your personal information or order number over and over to different
departments.
Why a CDP is better
Earley says, “A CDP can provide some of the functionality of other marketing systems and
customer engagement platforms, but it is fundamentally different in design and function.”
Earley describes older marketing automation systems that can integrate with other tools but
usually in a limited way. CDPs gather far more detail from many diverse systems and analyze
it in more extensive ways.
“CDP tools are designed from the ground up to talk to other systems. They also retain details
from other systems that the engagement or automation tool does not. This is valuable for
trend analysis, predictive analytics, and recommendations that can leverage large amounts of
historical data,” he writes.
Customers can be described with explicit metadata from a variety of source systems.
How CDPs tell a story about customers
Earley asks what kind of details can be gathered about customers to create a more
personalized experience.
“It might be the customer’s age, or whether they were active on social media, or whether they
had children. The CDP stores data about the customer that can be leveraged by various
downstream systems to predict and influence the customer’s behavior,” says Earley.
This data can be culled from many sources including account creation, browsing behavior,
shopping history, social media activity, and restaurant ratings.
Implicit metadata about a customer is based on judgment and/or derived from other data sources.
Earley divides metadata into two kinds: explicit and implicit.
Explicit data is easier to gather and analyze because it is usually provided to the company
directly from the customer. It includes customer type (consumer/business/nonprofit), age,
gender, language, location, income level, account, name, address, contact phone, email,
account details, and so on.
Implicit data is gathered in other ways and includes activity and profiles on LinkedIn,
Facebook, Twitter, and Instagram. It also includes loyalty, length of relationship, purchasing
history, and prior responses to marketing campaigns. This type of data is gathered in a
unique way and can reveal what motivates customers to buy products and services.
“Clickstream tells us something about how customers are consuming content and traversing
the website: whether they click through an offer, whether they respond to a promotion, or
whether they are able to complete their purchase. The data tells a story—the question is how
to understand that story,” says Earley.
How CDP metrics analyze customers
After data is gathered, analysts must know how to understand it and what to do with it. Earley
says these things change over time, which is why the questions have to be asked over and
over.
For example, when analyzing metrics that reveal how quickly a customer leaves a website, an
analyst might say “When users browse to a certain point and then leave the site, they were
unable to complete their task. What can be changed to impact this behavior?”
Earley says the goal is getting to know the customer well in order to meet their needs.
“In the physical world, this is what a great salesperson does—they know the customer and
offer solutions based on that knowledge. Digital technology is the stand-in for the best
salesperson in an organization,” he says.
