Quoting Forbes magazine : We have already seen an explosion of Customer Data Platforms (CDP) in the last few months — and with good reason. Fragmented data from multiple sources can be notoriously difficult to organize, which obviously isn’t ideal for companies that rely on timely, well-curated data to operate optimally. IBM estimates that co-called “bad data” already costs U.S. businesses roughly $3 trillion annually, so addressing this challenge has become a priority for organizations of all sizes.
So what is CDP : Quoting Wikipedia, a customer data platform (CDP) is a collection of software which creates a persistent, unified customer database that is accessible to other systems. Data is pulled from multiple sources, cleaned and combined to create a single customer profile. This structured data is then made available to other marketing systems. According to Gartner, customer data platforms have evolved from a variety of mature markets, “including multichannel campaign management, tag management and data integration.”
CDPs help solve this problem by collecting data from all available sources, organizing it, tagging it, and making it usable for anyone who needs access to it. Companies like Adobe, SAP, Oracle, Treasure Data and Microsoft are already heavily invested in providing the market with powerful new CDPs. New entrants like Segment and ActionIQ impress with new CDP services taking unique approaches to solve the challenge of gaining the coveted 360 customer view.
In spite of significant headwinds in 2020 – a global pandemic, economic uncertainty, technology budget cuts – CDP growth is booming. What happened? In two words, Digital Acceleration.
Businesses – even the most digitally resistant or under-served – have been forced to make the majority of their customer interactions digital – whether that’s e-commerce shopping, on-demand fitness, or virtual doctors’ appointments. New customer behavior has resulted in an influx of new data. New channels have seen tech stacks grow and evolve. And all of this has meant that customer data platforms have become a foundational piece of technology to adapt to this “new normal”.
Analytics platforms, Data Warehouses and Visualization tools, from Cloudera to Snowflake to SAS won’t lose relevancy, but the rise of the customer data platform is going to catch fire in 2021. This will be riding on the fact that business operations have become somewhat more fragmented, in part because of new work-from-home operational models, but also because of the continuing acceleration of data collection across an ever-expanding ecosystem of touchpoints – be it social media, websites and the various other apps . The Smartphone has truly emerged as the go-to devise for one and all. These fragmented pieces of data , especially Big Data, will need careful handling and stitching data to create a layer of complete data points for Analysis, Tracking and Real time decisions. CDPs will become especially relevant in 2021 and beyond.
An exponential rise in customer expectations
The growth in customer data being created during 2020 was matched equally by the growth in customer expectations. now have higher expectations of their digital experience than before COVID 19. As software becomes increasingly commoditized, and product features replicated in a short period of time, businesses are differentiating on the quality of customer relationships. Yet too often, inaccurate or poorly managed data makes quality customer relationships impossible.
Historically, customer data management has been “channel-centric”. Data was collected and organized according to the channel where it was created (email, call center, etc), and kept in siloed, inaccessible databases. Data from e-commerce doesn’t speak to data from retail. Retail data can’t speak to call-center data.
1. Customer behavior (curbside pickup, telehealth, etc) saw people jump from channel to channel like never before. Companies could easily have customer data spread over dozens if not hundreds of different systems.
2. Remote work highlighted the operational inefficiencies of having data spread across disparate systems and functions throughout an organization. Companies were forced to invest in new tools to improve access to data across their organizations.
Rather than take a channel-based approach to customer data management, 2020 witnessed companies integrating their data strategies around the customer. This holistic approach was a net positive for both customers and businesses.
If you are an organisation which is struggling to prioritise and make Productivity enhancing decisions and investments into Technology and Analytics, this is the right time to have a conversation on how well your applications are feeding into meaningful outcomes for your customers – internal and external.
We work with companies who want an audit of their technology platforms and an understanding of what type of productivity enhancing Analytics and streamlining of Insights can be achieved to manage the diverse expectations of the management , stakeholders and customers.
Most companies have spent the last year scrambling to incorporate digital solutions. It is now the right time to work on consolidation with a focus on ROI and productivity.
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