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PHOTO: Eye for Ebony

One of the key factors driving the growth of customer data platforms (CDP) is the increasing importance of first-party data to B2C brands.

Forces such as the EU’s new General Data Protection Regulation (GDPR), consumers’ increasing demands for privacy, and the waning influence of anonymous, cookie-based approaches to advertising are spurring marketers to examine how they can more fully leverage their owned first-party customer data. 

At the same time, vendors with solutions for unifying customer data and orchestrating customer experiences across the marketing technology ecosystem are aligning their offerings under the moniker “customer data platforms” in hopes of capitalizing on this sudden demand for solutions that unlock the potential of customer data.

But this is causing a lot of confusion for companies looking to CDPs to solve problems of data silos and increase customer lifetime value. With more than 50 systems identified as CDPs on the market, how should marketers evaluate and rank potential vendors and their products?

The answer is not to start with the product offerings, but to look inward and fully understand which use cases are important to your business before reaching out and engaging with any vendors. Not all of the products sold as CDPs can support all use cases, so entering into the conversation with an informed understanding of how you want to use a CDP and what benefits you expect from it will clear the field.

Related Article: Customer Data Platforms: The Truth Behind the Hype

CDPs — Not Just for Marketers Anymore

Yes, CDPs by definition are marketing systems, built for marketers. And traditional CDP use cases are explicitly for outbound marketing (email, direct mail, SMS), centered on segmenting customers based on value, behavior and attributes, so marketers can deliver one-to-one personalized content for every marketing message. These are CDP bread-and-butter use cases.

But where the prospect of using a CDP becomes really exciting is when a CDP’s customer intelligence can proliferate across an entire company and become embedded in a brand’s DNA. Brands that get the most out of their CDP deployments have made their CDPs available to marketing and nonmarketing teams alike. Any team that can improve its performance by having access to unified, cleansed, deduped customer data and customer intelligence can benefit from using a CDP. A CDP can benefit people throughout the company, from customer support representatives and store associates to business intelligence specialists, IT professionals and even human resources employees — anyone who needs to understand the customer.

5 CDP Use Cases That Directly Increase Customer Lifetime Value

Based on my experience working with large, omnichannel brands with initiatives to unify and activate online and offline customer data, I've identified five use cases beyond traditional outbound marketing that seem to have the biggest impact on customer lifetime value. Anyone considering a CDP should think about the following use cases and consider whether any of them are relevant to their own companies.

Related Article: What's the Difference Between Customer Data Platforms and Data Management Platforms?

1. Digital Advertising

CDPs can be useful for companies that engage customers through digital advertising and use first-party customer data for acquisition and retargeting campaigns. For example, a CDP can be used for ad suppression. Since a CDP unifies offline and online customer data in real time, marketers can use a CDP to suppress customers who browsed online but purchased in the store or through another channel. Marketers can also use CDP segments for smarter display targeting, and for creating lookalike models for Google Customer Match and Facebook and Instagram custom audiences. One large publisher has noted that lookalike campaigns on Facebook using CDP data have twice the ROI of traditional Facebook campaigns using interest targets.

2. On-Site Clienteling

Clienteling apps enable one-to-one personalization during live, in-person interactions that take place in stores, on airplanes or in restaurants, etc. When a clienteling app uses CDP data, the personalization can take into account the complete picture of the customer, including insights such as the customer’s channel preferences, journeys and propensity to buy.

3. Customer Service and Call Centers

When a customer calls into a customer service center, the call center representative must quickly identify the problem, calm and reassure the customer, and resolve the issue. Without access to CDP data, the call center representative can only see transaction data and a history of previous calls. Using a CDP, the call center representative can now access the complete view of the customer, including the customer’s preferred store location, recent website, email or mobile activity, preferred method of communication, likelihood to buy and product return history. With this information at their fingertips, customer service and call center teams can close tickets more quickly and deliver better customer experience.

Related Article: What Can You Do With a Customer Data Platform?

4. Live Customer Events and Workshops

Many big companies offer on-site classes, workshops and events as part of their brand experience. For example, a large athletic retailer frequently holds yoga workshops in its stores and sponsors 5K and 10K races. This retailer ingests event registration and attendance data and uses it to run campaigns to continue to engage participants after the events are over. Participation in on-site events adds an important layer of insight for shaping a single view of the customer; campaigns that use that data can increase a customer’s propensity to buy and turn nonpurchasers into customers.

5. Data Querying and Analytics for Data Scientists

If your company has data science and analytics teams, you should evaluate CDPs that have capabilities that benefit people in those professions. Consider the use cases that are important to data scientists and analysts, such as the ability directly query CDP data and export data to external systems. A CDP should include analytics functionality, and it should be able to support whatever analysis a data scientist needs to conduct.

As customer data platforms continue to deliver results for marketers, they are also moving outward to connect the dots throughout the organization by using first-party data to create better and more relevant customer experiences, support faster customer issue resolution and power the entire supply chain, from end to end.

We live and work in a data-driven world, and that isn’t going to change anytime soon. While it is important to protect customers’ privacy, using first-party data is great way to fuel the customer-driven initiatives companies must offer if they want to be successful.