Digital customer experience organization, Sitecore has identified 7 ways that a customer data platform helps a business create standout customer experiences and drives personalization at scale.
According to Sitecore, a dedicated CDP captures and cleanses data. It unifies data to create a single customer view. But the CDP’s talents don’t end there. From building loyalty and trust to increasing revenue, the business benefits of a CDP are many and varied.
- Eliminating data silos
This is where the customer data platform really flexes its might. By breaking down data silos, the CDP transforms otherwise haphazard, fragmented collections of names, email addresses, and purchase history into valuable, actionable data that updates dynamically in real time.
Duplicate profiles that impact relevancy and analytics are removed, allowing the customer data platform to create a 360-degree customer view and carry out accurate data analysis, segmentation, and decisioning to deliver the types of personalized experiences that turn customers into brand advocates.
- Unlocking AI-powered personalization
Leveraging historical and real-time data, AI-powered customer data platforms provide marketers with all the insights they need to decide the who, what, where, when, and how of personalized customer engagement.
AI-powered personalization is a valuable marketing tool for several reasons. While brands can use AI to identify opportunities to upsell products and services to relevant customers, they can also predict and identify customers who are unlikely to convert. Excluding uninterested or unsuitable customers from campaigns to focus on higher-value customers saves time, resources, and prevents these customers from receiving irrelevant or “out of touch” messages that contribute to churn.
- Ensuring data protection and privacy
With the ongoing threat of data breaches and GDPR and CCPA enforcement, building and maintaining user trust has never been more important for brands. CDPs enable brands to comply with existing and emerging data protection and privacy legislation by centralizing data – pulling together data sources, creating complete and up-to-date customer profiles, and making those profiles available in real-time. Not only does this centralized approach keep the business and its customers safe from potential threats, but it also means brands can quickly and easily carry out a data audit if, and when requested to do so.
- Building omnichannel customer experiences
Exceptional CX calls for a thorough understanding of both the online and offline behavior of the customers. A customer data platform gives brands a deep understanding of their customers by ingesting data from online and offline sources and unifying it to create a single view of each customer.
Using machine learning and AI, the CDP will segment customers based on criteria such as their demographics, geographic location, and behavior and then activates relevant campaigns via various channels including mobile, email, web, and social media. As a customer’s channel preferences evolve over time, the customer data platform can adapt to these changes and react intuitively.
- Increasing operational efficiency
Seamless integrations with existing tech stacks mean CDPs reduce setup costs substantially and save hours of engineering work and reliance on IT resources. By democratizing customer data, the CDP allows marketers to focus on creating next-level campaigns and experiences, while IT teams can concentrate on tracking, building, and optimizing new data science models.
- Improving customer lifetime value
Customer lifetime value (CLV) represents the total worth of a customer over their entire relationship with a brand. Considering that it costs significantly more to acquire new customers than to retain existing ones, it makes good business sense for brands to look after the customers that they have already converted by delivering engaging experiences that encourage loyalty.
Using predictive insights, a CDP gives brands the ability to identify high-value customers and serve up the most relevant, personalized customer experiences — the kind that differentiate your brand from the competition and increase customer retention, loyalty, and ultimately, CLV.
- Driving revenue
From improving customer acquisition to delivering personalized omnichannel experiences that drive retention, a customer data platform is one of the martech stack’s most powerful revenue generators. In fact, according to McKinsey, personalization can reduce acquisition costs by as much as 50%, lift revenues by 5% to 15 %, and increase the efficiency of marketing spend by 10% to 30%.