Why CDPs are different from the tech that came before

The latest tech, the best results, the most personalised experience – if you’ve worked in marketing over the last decade, you could be forgiven for saying you’ve heard it all before. Marketing technology has been going through a rapid evolution in the past few years, with new trends and new tech emerging all the time. While every new stage has had its exciting developments and advantages, most have fallen short in their own ways.

The focus of all this tech has been on data to improve the customer experience. Systems that pull data together for a complete view of the customer, options that integrate with your CRM and automate campaigns, centralised data hubs – it all sounded good until the limitations came into view.

After all this painful evolution, marketing tech has reached a new high point. The customer data platform, or CDP, is already being used overseas, and more New Zealand businesses are jumping on board. This tech provides all the essential missing features from the versions that came before, and more!

Here’s a look at how tech got there:

CRMs – let down by lack of integration

Customer relationship management (CRM) software was a game-changer when it first came on the scene. This new system promised to give you a complete view of your customers and let you manage your digital marketing at the same time. The complete view part was accurate – many businesses still use CRM software to collect customer data and manage customer interactions, but only for identified customers.

The digital marketing aspect was less successful. Try to connect a web tracking tool or a digital advertising platform to your CRM? It’s not going to happen. Unless your business has very minimal marketing needs, a CRM isn’t the marketing tool for you.

Automating marketing, with minor success

Marketing automation systems came next. This tech was designed to let you automate campaigns to customers on your database, taking manual work off your hands and delivering better results. It connected with your CRM and even some paid media systems – making it a step up from the CRM itself.

In the end, though, marketing automation was too focused on the email channel and identified customers again. Although it could automate a tricky eDM sequence, it couldn’t help you engage with anonymous potential customers, and didn’t offer much beyond email.

Centralising data with a DMP

DMPs – or data management platforms – swooped in with yet another way to centralise customer data. Like marketing automation systems, they could ingest your CRM data to deliver personalised advertising to known customers. For many businesses, a DMP was a useful way to integrate customer data with paid media placement, making it easier to target specific groups and individual browsers.

DMPs had benefits, but again, also came with limits. The platforms could only be used for paid advertising, with no way to integrate social media, email, web or other channels. They didn’t store data long-term, making it harder to look at trends and track performance. Finally, DMPs relied too heavily on third-party cookies – which means they’re facing obsolescence as those data sources are retired.

Why data warehouses didn’t deliver

Let’s not forget data warehouses. This tech was meant to collect all the data from different departments in your business in one place for easier analysis. With data in hand, the theory went, marketers could look at results and gather insights, then translate that into marketing action.

Unfortunately, data warehouses didn’t support real-time analytics or automate marketing processes. They also failed to include privacy consent management tools, which are increasingly important as privacy laws evolve. For marketers, data warehouses had another major downside: they needed to be managed by specialist IT teams, making them less accessible to the people who needed them.

Connecting the dots with a CDP

Despite successive waves of marketing tech, New Zealand marketers still didn’t have a real-time, actionable view of existing and prospective customers. This made first-party data strategies and true personalisation almost impossible.

This all changed a couple of years ago when the customer data platform (CDP) made it to our shores. This new marketing tech is mainstream in the States and widely used in Europe and Australia. And there’s a good reason for that. CDPs manage to combine many of the benefits of past marketing tech, without many – or any – of the downsides.

A CDP collects data from a wide range of sources – your website, online advertising, mobile apps, in-store interactions, call centre, email and even IoT – and brings customer identities together, giving you an accurate, enriched real-time view of your customers. Along the way, the tech uses set rules and predictions to enhance the data, helping you target customers even more precisely – for example, high-value customers might get a different experience than lower spenders. Better yet, CDPs can connect with your other marketing tools and tech, so you can see results in real-time and take action.

The enriched customer profile can then be used in three ways:

Create audience segments. Divide customers into groups according to shared attributes and use them for measurement or targeting. You can create as many groups as you like, based on previous searches, demographics, or even predicted behaviour. e.g ‘High likelihood of visiting again in the next seven days’.
Powerful analytics reports. When all your customer data is unified, you can connect it to your favourite BI tools like Tableau, PowerBI and Google Data Studio, then find new opportunities to influence customer lifecycles.
Activate your audiences. Connect customer-facing systems to your CDP, so each has access to unified, accurate customer data, and can help provide that up-to-date omni-channel customer experience.

Unlike previous tech, which has never quite lived up to its promises, CDPs offer a fully realised marketing package. In an environment increasingly focused on first-party data and extreme personalisation, this tech is changing the game.

Ready to talk CDPs and customer data? Chat with one of our leading CDP consultants.