In the business world, it’s easy to be so focused on just getting something done, that you forget about why you were doing it in the first place. You aim to send a certain number of emails, publish a certain number of blog posts, attract a certain number of website visitors — but lose sight of what you were trying to accomplish in the first place. As a result, you may find that you’ve done a lot of work, yet your business isn’t seeing meaningful benefits from that work.
The same can be true about investing in new marketing technology. You can get so caught up in the process of selecting and onboarding a new solution, that you lose sight of why you wanted that solution in the first place. As a result, you may find you have an impressive piece of technology, but not the ROI.
If you’ve been following the latest developments in marketing technology, you may be looking into a customer data platform (CDP). But if you’ve experienced anything like what I’ve just described, remember to have your end goals in mind from the start. In this blog post, I’ll explore what a CDP is, what your goals with a CDP might be, and why it’s important to always have them in the back of your mind as you get started with a CDP initiative.
What is a CDP?
The CDP Institute’s official definition of a CDP is “packaged software that creates a persistent, unified customer database that is accessible to other systems.”
In our view, there are three levels of CDPs. A Level 1 CDP brings together first-party customer data from multiple sources and stores it in a central location — creating a single view of each customer with a universal ID for each person. Level 1 CDPs do not pass the data to other systems, nor do they take any action on the data themselves. They are used exclusively for analysis.
A Level 2 CDP can pass segment-level data from the CDP to other systems, while a Level 3 CDP can pass data to other systems, as well as act on the data itself to deliver personalized experiences across channels.
This white paper provides a more in-depth analysis of the three different levels of CDPs if you’re interested in learning more.
How do you decide which type of CDP is right for your organization? The CDP you pick should be dictated by your end goals. In your vision of the future — when you have a CDP fully implemented within your tech stack — what do you want to be able to do with it? How do you envision using that data? No one goes through data integration projects just for fun. You definitely want to have an idea of what you’re hoping to achieve.
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This is where the conversation about CDP data activation comes in.
What is activation?
In this context, activation means using the data you collected and stored within your CDP to affect a customer experience in some way. At Evergage, we refer to this process as personalization — because you are using something you know about a person to deliver a more personally relevant experience.
Activation of CDP data can take many forms. For example, you’re able to:
- Determine which promotions or offers to target to each person based on his or her past behaviors, interests, loyalty program status, etc.
- Deliver digital ads only to people most likely to be affected by them — and avoid spending money advertising to loyal customers who are more likely to purchase on their own.
- Talk to target ABM accounts or open sales opportunities in a specific and targeted way across channels.
- Ensure web and email CTAs are always relevant to the recipient (for example, removing/changing CTAs for actions a person has already taken).
- Recommend content, products, brands, and more based on everything that is known about that person in the moment while they’re on your site or in emails.
Any time you tailor an experience to someone in a particular channel based on the information you have gathered in his or her customer profile in the CDP, that’s activation.
Is activation your end goal?
As you’re dreaming up your ideal customer experience, answer this question: do I want to take action on the data I compile to provide a more personalized and relevant experience? The answer will dictate the type of CDP you invest in.
Note that organizations with a Level 1 CDP can’t act on the customer data being stored. There are some cases where a Level 1 CDP is all a business needs — but those situations are typically in the minority. The most common reason businesses have a Level 1 CDP is that they have embarked on a long-term project to bring their data together, only to find that the data can’t easily be used because activation capabilities weren’t built in or considered from the beginning. In those instances, companies may find themselves with a Level 1 CDP unintentionally, where they would have been better off with a Level 2 or Level 3 CDP.
You don’t want to find yourself in this situation if it’s not your intention. If you’re looking for data activation with your CDP, make sure you pick a solution from the start that will allow you to do so.
Final Thoughts
Bringing all of your customer data together in one place is a major challenge. You don’t want to undertake such a project without a clear end goal. More often than not, that goal should be activation — because it doesn’t make sense to bring data together if you don’t plan on using it to affect customer experiences.
