Why Should Marketers Know About CDP: What is a CDP and Its Benefits

Imagine you're a brand marketing manager setting next year's goals. You want to review the past year's performance, including new and returning customer revenue, site traffic, and RFM analysis, to evaluate the impact of your membership system. However, data is scattered across GA, CRM, and POS systems, and without engineering support, you can't get a complete picture. Even with an engineer, it might take two weeks to compile.

This fragmented data experience is all too familiar to marketers, often leading to inefficiencies and errors. The solution? A Customer Data Platform (CDP). A CDP integrates data from multiple sources, providing a unified view and eliminating cross-platform data dissonance. It streamlines data analysis and decision-making, ensuring that your marketing strategies are data-driven and efficient. By using a CDP, you can quickly access comprehensive insights, validate past strategies, and plan future campaigns with confidence.

What is a CDP？

Are you still confused about what a CDP (Customer Data Platform) is, despite reading various articles online? Simply put, a CDP is a 'one-stop data platform' that primarily manages customer data. It actively integrates information from different systems, storing both O-Data (Operational Data) and X-Data (Experiential Data) in one place. But a CDP is more than just a storage solution; it also includes data analysis features to unlock the power of your data.

How do we use a CDP? Generally, using a CDP involves 3 steps:

• Step 1: Collect and Manage Data - Gathering data from various sources
• Step 2: Analyze Data and Discover Insights - Extracting valuable insights through analysis 
• Step 3: Act on Insights - Set annual goals and KPI, plan campaigns, and carry out marketing communication with members

Steps 2 and 3 form a continuous cycle, helping brands refine their operations and marketing strategies through constant improvement. Let's break it down further!

Step 1: Collect and Manage Data

The primary function of a CDP is to integrate data from various sources, delivering comprehensive customer profiles. Here are the types of data a CDP can collect:

• Membership Data: From EC, ERP, CRM, and POS systems, including membership registration dates, birthdays, and membership tiers.
• Product Data: From EC, ERP, CRM, and POS systems, including product prices, items, and product labels.
• Order Data: From e-commerce platforms, including purchase transaction dates, amounts, and items bought.
• Click-through Rates: Only available in CDPs with broadcasting capabilities, tracking email open rates, clicks, and conversion values, as well as clicks and conversions from LINE/SMS.
• Behavioral Data: Customer behavior across websites and apps, such as browsing, clicking, add-to-cart, and search history. CDPs can track the individuals that performed these actions, enabling personalized communication, such as offering short-term discount codes to members who added items to their cart between 4 January to 4 March. 

These data points are automatically updated in the CDP via APIs and webhooks, ensuring consistency and accuracy.

Step 2: Data Analysis and Discovering Insights

Just like how raw ingredients need to be cooked to make a delicious meal, data integrated by a CDP needs analysis to extract valuable insights. Common analysis models include segmentation, RFM, member age analysis, cart sales funnel analysis, and product analysis. Each CDP offers different analysis capabilities, so it's crucial to choose one that meets your needs.

From identifying specific member segments for one-time campaigns to setting annual goals based on data insights, the possibilities are vast. Professional consultants from the CDP provider can also assist in addressing specific challenges, ensuring you get the most out of your data.

Step 3: Act on Insights

The final step is the most essential. After data analysis, marketers should implement and execute practical improvement procedures. This should follow the PDCA (Plan-Do-Check-Act) cycle for continuous improvement. For example, if data shows a decline in new customer registration rates in March, marketers can opt for promotional activities, or collaborate with KOLs to boost registrations and conversion rates. With the CDP, marketers can then analyze the data to assess the effectiveness of these activities, making adjustments as needed. The usefulness of data lies in terms of identifying issues, developing solutions, and making informed decisions for better outcomes. 

How Does a CDP Help Marketers Improve Efficiency? 

Now that you know the functions of a CDP, storing data and providing convenient access to customer data management, how does it really enhance a marketer's productivity?

Improvement 1: Capturing Online Traffic and Reducing Churn to Increase Revenue

We know that watching traffic gradually drop off on GA, with no way to intervene can be frustrating. With a CDP, marketers can precisely track all customer journeys, which allows them to take subsequent actions when needed. For example, the CDP allows marketers to access data such as when a member visits their website but doesn't make purchases, showing if it's within 3 hours, 1 day, 3 days, or 7 days. With this awareness, marketers could automatically reach out to the member via Line, Email, or SMS, reminding them to complete their purchase.

OmniSegment CDP can also target members by their purchase behaviors,  such as members who have browsed an item multiple times but has not added to cart, members who clicked on a specific page category but has not performed any purchase, or members who have missed the repurchase cycle. Such data automation allows marketers to effectively nudge customers to return and make a purchase, growing brand revenue.（Continue Reading：暸解購物車未結帳顧客旅程的成功案例）

Improvement 2: Effortlessly Extract Campaign Target Lists

Creating target lists for campaigns used to be a hassle, often leading to these issues:

1. High Costs: Blasting bulk messages to boost conversion rates results in high costs.
2. Low Conversion Rates: Mass texting yields poor conversion rates, without being able to discover ways for improvement.
3. Cost Inefficiency: Struggling to find ways to reduce messaging costs.

Mass messaging isn't always bad, but if we only manage to engage loyal members, it's time to consider implementing market segmentation. The most powerful feature of a CDP is its ability to segment members through automated labeling. By identifying members' spending behaviors and labeling them, marketers can personalize communications and try out different types of communication to find what resonates best with their audiences.

How do you select the right targets for your campaigns? Common conditions to consider include member's recent purchases, website visits, overall contributions, and VIP status. OmniSegment CDP easily cross-references these conditions and uses AI to predict the highest value members. This means marketers can easily create campaign target lists in just five minutes, effectively using communication channels such as Line, Email, and SMS for optimum results. 

Improvement 3: Delivering Solid Campaign Proposals Backed by Data 

Do your campaign proposals often face skepticism from your boss? With a CDP, you can effortlessly demonstrate the effectiveness of past campaigns, analyze revenue composition by market segments, and combine this data with recent member activity, seasonality, and timing factors to validate your ideas.

Evaluating a campaign's success goes beyond total revenue. Using OmniSegment CDP, you can track member engagement during the campaign, identify active and re-engaged members, and gauge new member registrations. This data-driven approach ensures your proposals are backed by solid evidence, making them more convincing.

Additionally, the CDP can analyze ad performance by labeling UTM-tracked visitors, allowing marketers to assess the effectiveness of KOL promotions through metrics like site visit rates, cart additions, and conversions. You can identify which KOLs drive the most value and refine future campaigns accordingly.

How to Choose the Right CDP?

A CDP is an invaluable tool for marketers, but with vast options available in the market, how do you choose the right CDP for your brand? Here are some key considerations:

Evaluating CDP's Third-Party System Integration Capabilities

1. Third-Party System Integration: The CDP must be able to integrate data from various systems like EC platforms, CRM systems, and messaging platforms. Ensure the CDP supports your existing systems to avoid extra costs and delays.
2. Implementation Speed: Check how quickly the CDP can integrate with your current platforms. For instance, OmniSegment CDP can integrate with 91APP, CYBERBIZ, and SHOPLINE within 4 weeks.

By considering these factors, you can select a CDP that seamlessly integrates with your existing systems and meet your brand's needs.

Evaluating CDP's Data Analysis and Automation Features

The primary value of a CDP lies in its ability to perform quick and easy data analysis, and to leverage Marketing Automation (MA) to reduce communication costs and capture traffic, thereby increasing revenue. Before selecting a CDP, you should identify your existing challenges and desired solutions. Determine which automated communications you would like to trigger in the customer journey, for example, reminders for abandoned carts. By clearly defining your needs, you can better assess which CDP meets your expectations and effectively supports your brand's goals.

Evaluating the Quality and Availability of Professional Consultation Services that Comes with the CDP

When integrating and using a CDP, it is common to encounter issues or data misinterpretation. The availability of knowledgeable consultants to assist with these issues is crucial. These experts can guide marketers through the system and provide valuable insights into data analysis. They may even offer industry benchmarks as reference.

OmniSegment CDP provides various consultation service plans to help brands get started quickly. Consultants are experts in interpreting performance metrics, offering actionable recommendations, and generating monthly or annual reports, additionally delivering deeper insights into member engagement and maximizing ROI.

Conclusion

This article explained the introduction of a CDP, its benefits for marketers, and key considerations for selecting the right CDP. A CDP integrates data across multiple platform, enabling better marketers to make better decisions based on comprehensive data collection and analysis. Choosing the right CDP is an important move. Besides performing online research, you can request a direct demonstration from CDP providers to ensure it meets your brand's need! Interested in OmniSegment? Keep in touch with us and let our experts guide you through clicking on the ‘Contact Us' button on the page.