Top Benefits of a CDP
- Understand customer behavior
- Automate processes to save time and money
- Anticipate and predict customer needs
- Track performance metrics to optimize customer lifetime value
As a business owner, you know that customer data is essential for growth and success. But how can you ensure your customer data platform works for you?
Fortunately, many experienced entrepreneurs have already gone through the process of setting up and leveraging customer data platforms (CDPs). By learning from their experiences, we can gain valuable insights into how CDPs can help us maximize our businesses’ potential. From understanding customer behavior to improving marketing decisions, these tips will show why investing in a CDP should be essential to any company’s digital strategy.
1. Understand Customer Behavior With a CDP
A CDP is a powerful tool that can help business owners better understand customer behavior. With a CDP, businesses can gather, store and analyze customer data across multiple channels and device types to identify patterns and trends in customer interaction.
“The best thing our customer data platform has provided us is better insights. We can now better understand our customers’ behavior and interests, allowing us to tailor our product offerings more precisely. This has had a positive effect on our bottom line,” Logan Mallory, VP, Motivosity, said.
For example, CDPs can track how often customers visit your website, or how much time they spend on certain pages. This gives you valuable insight into what types of content resonate best with different customers, and allows you to tailor product recommendations across your brand portfolio.
“We use our CDP to understand our customer base better and target them with relevant messages and offers,” Jerry Han, CMO, PrizeRebel, said. “Since our customers come from all over the world, understanding their demographics allows us to tailor our messaging in each market.”
2. Automate Processes To Save Time and Money
Customer data platforms help streamline mundane tasks and allow for automation, letting business owners focus on the more critical aspects of their operations. Additionally, by automating processes, businesses can save money that would be spent on labor costs.
“Automating customer data management with a CDP has saved us so much time and money,” Anthony Martin, founder and CEO, Choice Mutual, said. “We can now process customer information quickly, allowing us to serve our clients better and focus more on product development.”
3. Anticipate Customer Needs and Target the Right Audiences
One of the most essential benefits of a CDP is that they can help target the right customers through customer segmentation. Customer segmentation is when businesses group customers into subgroups based on specific profile attributes, behaviors, and interests.
With access to customer data, you can segment customers into groups according to specific preferences. You can then target them with product offers that match their tastes. This type of segmentation helps business owners target the right customers most effectively and leads to more revenue.
“Not only has customer segmentation helped us improve our customer service, but it also allows us to identify new opportunities quickly. With a CDP, we can track leads and find new customers that fit our target audience,” Amy La Fuente, director of public affairs, Bosco Legal Services, said.
A customer data platform also gives businesses the ability to utilize predictive analytics on different audiences. Predictive analytics is a statistical method for using historical data to identify future outcomes. This allows business owners to understand customer behaviors better and make decisions based on those insights.
For example, a business could use predictive analytics to anticipate when customers need a specific product most to effectively forecast demand. They can also use predictive analytics to understand what kind of promotions customers would most likely respond to.
“Predictive analytics allows us to understand our customers better and anticipate their needs,” Jim Pendergast, senior vice president, altLINE Sobanco, said. “It has enabled us to serve our customers better and increase our bottom line.”
4. Track Performance Metrics To Optimize Customer Lifetime Value
Measuring success with a customer data platform can be done in various ways, such as tracking customer retention and lifetime value, measuring the effectiveness of marketing campaigns, and understanding how customers discover and interact with your business.
“We don’t just market and sell our products, but use customer data to measure performance and make adjustments as necessary,” Jarret Austin, owner, Bankruptcy Canada Inc., said.
Focusing on customer retention is vital to long-term success. A customer data platform will allow you to track the total number of customers who have joined your business over time, and how many are still actively engaging with your services. By understanding the customer journey, you can identify areas where customers may become disengaged, or find an opportunity to increase engagement through optimization.
Similarly, tracking customer lifetime value is another crucial metric that should be tracked to measure success. Customer lifetime value estimates how much each customer has spent, or will spend, on your products or services throughout their relationship with your brand. Again, this can help you understand the profitability of different segments or marketing channels to make informed decisions about resource allocation.
Unlocking the Benefits of a CDP
A customer data platform is a powerful tool for businesses looking to understand their customers better and optimize the customer experience. By using predictive analytics, companies can make more informed decisions about how to interact with customers to increase engagement and sales.
Additionally, customer data platforms help business owners track performance metrics, such as customer retention and lifetime value. This allows them to make more informed decisions about resource allocation. With these tips, businesses can make the most of a customer data platform.
Want to learn more about how to choose the right customer data platform for your organization? Our comprehensive guide explores the key steps needed to create a successful CDP evaluation and selection process – from the capabilities to consider, to the questions you should ask prospective vendors to make sure you’re making the right decision. Access your copy of our guide here.