Customer data management—Best practice and CDP

Simplifying a process like customer data management can require acknowledging that your existing systems have been outgrown. Solutions like customer data platforms (CDP) are built to manage the ins and outs of data, privacy, and KPIs that businesses have today.

Despite working in a culture that’s rapidly evolving, many of us struggle to cut the cord and abandon systems that were built for a time that has passed.

A customer data platform (CDP is an end-to-end software system that gathers, organizes, and unifies customer data from multiple tools). The topic of data management has been in the news for a few years, though for many people it’s still a mystery.

Some questions people ask around data platforms include: How does CDP benefit my business? More importantly, how can I be so confused by something intended to simplify data management? The first time I heard CDP was a customer data platform I had to hide the glazed eye look of, “Yeah, I still don’t get it.”

So let’s break down the mystery of the acronym that stands to help you unlock data in ways you cannot even imagine. It’s necessary to understand that when the management of data is simplified – which is the magic of CDP – making the most of the data becomes easier, more effective, and CDP also improves the overall customer experience.

With data breaches everywhere, customer data management becomes crucial

Customer data management best practices allow businesses to fortify their commitment to positive relationships. The potential for growth, in commerce and trust, is massive.

Customer data management: How to build a strategy

Data management means having a plan for what you are going to do with data. You wouldn’t buy a cartload of gourmet groceries without having some sense of what you are going to use them in, would you?

Give yourself guardrails for success in building a customer data management strategy:

• 1. Establish standards—Collection, consent, transparency
  2. Set goals—Define how you will use the data
  3. Unify data—Integrate data to create a single source for multiple departments to avoid silos
  4. Safety—Commit to protecting your customers and your organization from hacks or breaches
  5. Research—Stay in the know about regulations like CPRA

How a platform can help to manage your customer data

CDPs are the answer for consumers, businesses, and technology that have evolved beyond the way we’ve always done it. The collective desire for an extensible solution to simplify customer data management (CDM) has grown too. CDPs create a single place for data that is then processed for the benefit of departments across the entire enterprise.

Organizations are inundated with a tremendous volume of data that’s collected. CDP assures that none of it goes to waste, and helps businesses hone in on the specific data needed to achieve their KPIs.

Basically, CDP is the souped-up tech version of the barista who knows every aspect of your drink order or the salesperson at the boutique who meets you once, then forevermore knows your size, taste, and budget—AND never makes you feel ashamed. You’ve probably experienced it when you’ve had something happen to you as a consumer that made you think, “That was so easy!”

The struggle with finding the perfect CDP or the optimal moment for a company to transition to CDP is this:

How on earth do you get marketing, IT, sales, corporate,
and logistics to agree on needs and objectives to
simplify data management?

Benefits of a customer data platform

The more we learn about data, the more we realize that we’re vastly underutilizing its potential. Enter CDPs.

By creating ways to highlight, discard, and transform data, CDPs create a roadmap from what before felt like an insurmountable mountain. They can take you from a position of data languishing to a process of infusing marketing actions and business objectives with salient data that improves revenue and the customer experience.

How a customer data platform can help to manage customer data

Here are 5 ways CDPs make sense of customer data:

1. Data Aggregation—Everyone needs help getting the gist of something, CDPs take data from different places and formats and summarize it in a cohesive way.
2. Discretization—There’s always that one person at a dinner party who monopolizes the conversation, consistently steering it away from the subjects people prefer. Data discretization converts data to a discrete form to eliminate “the noise” of small fluctuations.
3. Generalization—Are you bothered by people who get in the weeds instead of focusing on the big picture? Data generalization, also called “blurring,” takes a data value and puts it in a less precise value to keep the focus.
4. Normalization—You might call this, “Get to the point.” Data normalization reduces redundancies and removes unnecessary characteristics.
5. Manipulation—Remember the celebrity recipe book that “hid” vegetables? This type of data management alters the data to make it easier to swallow.

Data can work for you in new ways

The more data, the more opportunity, particularly when it is accessible to other systems and originates from. unified customer database.

Here are ways party data can be treated through a CDP to tell us more:

1. Attribute Construction—We are all seeking to distill the purest information. Sometimes this means adding attributes to help peel away data that isn’t as relevant.
2. Integration—Do you know the European folk story of Stone Soup? Everyone in the village is invited to contribute something to the soup. By sharing their items, it makes the whole stronger. Integration takes data from a range of sources to make a fine data stew.
3. Smoothing—This technique of addressing data uses an algorithm to take away noise. This allows the data to predicts trends by having specific data stand out.
4. Customer Journey Orchestration—Customer journey orchestration moves data into a customer mindset. It contextualizes a customer’s journey by building on data that informs how to best provide for them in real-time. If a customer does not follow the path historically assigned to first-time buyers, this approach allows for the sales process to adapt and for customer loyalty to be built.

Data management is customer service

The question about CDPs or investing in your CDM is no longer an if, it’s a when. The long and short of it is the more you delay embracing the potential of CDPs, the greater distance you put between what your customers expect and deserve and what you offer. Join hands with data to understand, manage, and satisfy your customers.