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What is Customer Data Platform: The “Simple” Explanation

There are plenty of ways to explain “What is Customer Data Platform”, they often come with lots of technical-terms which are hard to understand. Here will be the most simplistic and practical approach to bring you a better understanding of it:


1. What is Customer Data Platform?

Customer Data Platform is the packaged software that consolidates customer data from multiple sources and creates a persistent, unified and real-time customer database easily accessible to other systems.

If you likely struggle with how to combine your online and offline data, Customer Data Platform will help to put all of your pieces together by integrating data across a variety of channels (which included online transaction, demographics, online behavior) to become one complete customer data profile.

You may find the following scenario is quite familiar to your business, please check it out and let us know how you can solve this?
Helen is 24-year-old and lives in Singapore. She is looking for a new pair of shoes and been searching online through different channels such as Google, Shopping, Shopee to find the right one. Finally, she visits Navy’s website. After checking different type of high heels, she finds the one which matches her style. She manages to complete the purchase online to get delivered to her company, however, she’s afraid that it will not fit so she decides to visit their physical store instead of completing check out.
After few days, She completes her purchase at Navy’s store.
A few months later, she continually buys a new pair of socks from Navy’s website.

  1. How does Navy’s identify Helen is a return customer when she purchases from different platforms?
  2. How does Navy’s store her data and track her on-site behavior?
  3. If Navy’s have a special promotion, how should Navy’s approach her?

A customer data platform will help you solve these questions. This is what we will explain in the next part of this article

2. How does customer data platform work?

Customer Data Platform Visualization

CDP collects data across multiple channels

CDP collects and organizes data across a variety of sources such as website, mobile activities, social media and offline channels.

CDP creates unified customer profile

It helps to unify data across channels to create a completely 360-degree view of customer profile. There are four kinds of data that CDP collects and organizes:

  • Identity Data (Ex: Personal Demographic)
  • On-site Behaviour Data (Ex: Email Open Rate, Website Click, Product View)
  • Descriptive Data (Ex: Lifestyle. Interest, Marital Status)
  • Quality Data (Ex: How do you know about us? How would you rate our services?)

CDP tracks and analyzes customer behaviour and customer journeys

The platform can help to visualize customer behavior analysis and identity graph that provides accurate data insight of customers. Thus, it can offer appropriate recommendations and reliable predictions to enrich your customer experiences.

CDP leverages data insight to enhance customer experiences

Run powerful acquisition campaign by leveraging data insight from Customer Data Platform.

  1. How do you identify Helen is a return customer when she purchases from different platform?

Merging online and offline activities, CDP would help Navy’s to identify Helen’s identity since she first visited the website until she visits your brick-and-mortar store.

  1. How do you store her data and track her on-site behavior?

CDP enables Navy’s to track Helen’s cookies and her behavior since she first visited the website. For instance, CDP system will record the type of products that Helen views on your website. Thanks to AI algorithm, Navy’s could identify the abandoned cart behaviour and set up an auto-send email with “10% High Heel Discount” Promotion Code for Helen to use either online or offline to encourage her to complete the purchase.

  1. If you have a special promotion, how do you approach her?

Since the system has already recorded Helen’s interest with “high heel” so that Navy’s could attract Helen’s attention by following up promotion email which is related to high heel to catch her attention and increase the open rates.
Navy’s could approach Helen outside the website by proactively running an online advertising campaign with useful data to deliver the high heel promotion message at the right time and increase the conversion rate.
You might wonder how business can benefit from this? Now, let’s dive deeper into the following part to get your answers.


3. How does it benefit your business?

  • One-place. All data ⇒ Boost Your Productivity

It’s likely your company has executed lots of marketing efforts to reach and connect with your customers. However, It always costs you a lot of time and energy to collect and organize data from multiple sources to evaluate marketing results. This is where CDP comes into play. CDP primarily focuses on integrating data in one-place which helps to simplify your workflow and boost your productivity.

  • 360-degree-customer view ⇒ Understand Your Customer Better

The most effective way to foster customer loyalty is to give customers what they are looking for. CDP equips your marketing efforts with powerful customer insight and real-time data. In this way, you can easily understand your target audience’s behavior which helps to effectively deliver the relevant message and appropriate product recommendations as they demand.

  • Data Privacy ⇒ Gain Trust From Your Customers

Trust becomes a key for customers to engage with a brand. While customers have more concerns about data privacy, it’s crucial to have a compliant customer data platform that stores in secure environment. According to Forbes, 75% of customers surveyed are more willing to share personal data with a brand they trust. CDP enhances privacy safety with the ability to store data at the sensitive fields. This means customer data is hidden from any data exports or campaign outputs (so it can not be accidentally used), whereas still being applicable for analysis.

  • Data-Driven Marketing & Sales for Promotion ⇒ Generate the right insight to implement marketing execution ⇒ Drive your business growth

CDP drives your business into the next levels by shortening the gap between customers and business. Leverage the meaningful analysis of customer profiles, in this way, business will be able to deliver more practical marketing approaches, building high-quality interaction with customers and strengthening the relationships.
Navy’s is planning to do the promotion with high-heel interest customer, however, they probably don’t know where to start and how to target the right customers. Sending the same promotion for each and everyone could lead to higher unsubscribe rate for customers not interested in these products. In stead of that, Navy’s could leverage powerful data insight from CDP in order to strategize their marketing plan.

4. How to use Customer Data Platform?

We’ve collected what we believe to be some of the most important use cases that are easily achievable with CDP

1. Online & Offline Activities Combination

Create an accurate customer profile in order to identify customers from online and offline activities.

2. Personalized Customer Experience

Tailor personalized customer experiences throughout the entire journey according to their behavioral data.

3. Smart Behavioral Retargeting & Lookalike Advertising

Leverage powerful insights from CDP to enable machine learning effectively connect with retargeting and lookalike target audience outside of your website.

4. Product Recommendations

Create different recommendation models such as “similar products” or “people also buy” to drive engagement and increase up-sell, or cross-sell your products or services.

5. Conversion Rate Optimization & A/B Testing

Deploy smart targeting to quickly transform the appearance of your page to test which performs better with A/B Testing.

6Omni-Channel Automation

Guide your customers through their entire lifecycle with personalized and timely messages sent to their preferred channel, significantly enhancing your opportunities to both acquire and keep a loyal customer.

7. Email Deliverability Enhancement

Thanks to powerful data insight and AI-powered algorithm, you can determine the ideal distribution time for each user based on their email opening habits, and reach them at this optimal hour. Increase email open rates.

If you are considering CDP could be a solution for your business, let’s start to answer those questions:

  1. How could your business use CDP?
  2. Which features of CDP would your business benefit from?

Identify your business use cases, it would help you to easily find the potential vendors which match with your requirements. Request a demo to evaluate your short-list of candidates. This will show you if this candidate is right for you. Make your decision to become a better version of your business!
Gain new and loyal customers by securely identifying and engaging them and delivering relevant experiences with SAP Customer Data Cloud.

SAI Digital is the largest SAP CX Partner in South-East Asia. We are an e-commerce agency committed to deliver best-in-class digital solutions for our clients to best serve their own clients. We have used our business and implementation expertise to develop a CDC Package that allows for faster deployments with predictable outcomes.
Tailor this package to your needs and implement it with us in as fast as 3 months. Click here to learn more about our Customer Data Cloud package!