4 Ways Customer Data Platforms Help CIOs AND CMOs
Data-driven marketing delivers results — such as more personalized experiences, more efficient decision making and more effective segmentation of audiences. Yet marketing teams often need outside help to make full use of their companies’ customer data, especially when massive amounts of data are scattered over different regions, divisions, channels, and formats. So for IT, the wrong data-driven solution can add to additional work — and headaches — for the whole team.
At data-driven companies, IT often has a LONG line
And at companies striving to achieve more data-driven marketing, IT departments are often already facing their own challenges with the growing emphasis on data — including demands on their time and expertise from other line-of-business divisions besides marketing.
Customer Data Platforms (CDPs) Offer a Win-Win for IT and Marketing
This situation calls for tools that let marketing handle more of their own projects without heavy extra demands on IT, while also addressing IT’s internal concerns with efficiency, data quality, and security. Customer data platforms (CDPs) can play a key role in this technological mix related to customer data management.
Master Data Management (MDM) vs. CDPs
With so much data fragmented and spread across organizational silos, some IT departments have turned to Master Data Management (MDM) to ensure accuracy and consistency throughout the enterprise. This approach, however, has real limitations for companies seeking to extract as much value as possible from their customer data.
Among other things, MDM can handle basic customer attributes: for example, an MDM platform can record a customer’s change of address with ease. But such systems fail to capture event-level data on user behavior in a way that informs marketing decisions. And they were never developed specifically for marketing automation, so adapting them takes a lot of extra IT work and budget.
What Does MDM Miss?
Someone who makes a purchase and signs up for a company’s loyalty program, for instance, may be a strong candidate to become a premium customer. MDM alone won’t provide marketers with the information required to make such a decision, and it certainly can’t assist marketers with taking action on that decision. Without this level of insight into customers, data-driven marketing is dead in the water. And while an MDM might be able to handle mass-market emails or one-size-fits-all offers, it isn’t up to the task of more sophisticated targeting, segmentation, and customer behavior modeling.
As giant worldwide beauty company Shiseido’s chief analyst for direct marketing recently put it, “Blasting emails who tried samples or bought a particular product won’t lead to customer delight. But detecting a mood swing in each customer and changing the tone of push notifications does.”
Lower Demand for IT and Engineering Support: A Less Publicized Benefit
Shiseido recently transferred all of the marketing data that the 150-year-old company was using, consolidating it into a CDP, and eliminating the need for the company to maintain many disparate platforms. The company saw a 20% in-store revenue increase per loyalty program member, and an 11% revenue increase, resulting in a 38% growth in net income, a tremendous win for the company.
But one of the less well-publicized benefits, company officials say, has been the minimal need for engineering time and the complete ownership of the entire data platform by the marketing team.
The CDP Advantage: 4 Important Benefits
CDPs are a more potent solution for IT departments trying to collaborate with marketers on data-driven initiatives and deal with growing, frequently siloed stores of customer data. That’s because, unlike an MDM system, a CDP collects comprehensive data from many different sources, persistently storing it to provide a unified view of the customer — and delivering actionable insights that improve acquisition, retention and lifetime customer value.
To see this, let’s look at the advantages CDPs offer for IT teams.
Let the Machines Do It: Efficient Data Collection and Management
A CDP takes over the hard work of collecting, searching and managing customer data, which is tedious and time-consuming for human beings. This results in greater efficiency for IT and a more efficient allocation of departmental resources, as well as serving as the basis for CMO marketing plans.
CDPs can automatically ingest all types of information from virtually any source, including real-time data, fine-grained data, and unstructured data such as weblogs, batch transactions, and other offline events. CDPs can also take in data without a predefined schema, reducing the complexity and cost of data collection. Plus, they can consolidate data, reducing the number of platforms that IT needs to support.
In addition, a CDP can automatically store and manage persistent data without any time limits, enabling companies to assemble a historical view of customers and their activities for detailed and advanced analysis — for example, predictive scoring and content affinity modeling.
Let the Tools Keep It All Together: Automatic Unification of Customer Views
A CDP automates the process of maintaining a single, unified view of individual customers. Such automation provides efficiency gains by reducing marketers’ demands on IT’s time and resources, and the number of disparate systems IT needs to set up, integrate and maintain. Integration connectors are built-in and assist with collection, while pipeline management helps keep data maintained on a regular schedule.
CDPs not only incorporate automated routines for data pipeline management, but also enable users to retrieve data with well-known query tools and languages — no special skills required. By using automatic unification logic, CDPs take the heavy lifting out of identity stitching, weaving separate events into a coherent picture of each customer’s attributes and behaviors, for the CMO, and reducing maintenance and new work for CIOs.
Less Handholding, So CMOs Can Do More: Self-Service Marketing
A CDP bridges the gap between different functions of the business and increases marketers’ autonomy from IT. This saves valuable time for IT departments as they respond to many different demands throughout their companies.
Through marketing-specific connectors, CDPs can integrate with all major sales and marketing systems, including offline sources of data, such as Point-of-Sale (POS). Meanwhile, a full suite of ready-made tools helps marketers build customer segments for personalized communications, offers, and advertisements. A CDP also provides built-in customer profile metrics and makes every level of customer information visible to users. Paired with pre-built reports for marketers, such features help keep time-consuming requests for reporting off of IT’s backlog, and free up IT departments to engage in other valuable activities for the business.
IT Gets More Built-in Protections: Better Data Quality and Security
A CDP assists in keeping customer data accurate, reliable and secure — a key advantage for IT organizations charged with data governance and quality assurance. As marketers use a CDP’s tools to reach target audiences more effectively and generate more engagement, they can gather more high-quality data on their customers and feed it back into the system. In this way, CDPs promote a virtuous cycle where data is constantly being cleaned, translated and updated, so its quality improves over time.
Today’s IT departments have to comply with stringent requirements for data privacy, causing extra work for CIOs, especially with the passage of new government rules such as the European Union’s General Data Protection Regulation (GDPR). The right choice of CDP contributes to this goal by providing for secure management of customers’ personally identifiable information. And teaming a CDP with a consent management system is definitely a nimble, automated way to deal with new privacy requirements.
Reduce Shadow IT
It would be an incredible stretch to say that CDPs will end “shadow IT.” But CDPs were developed, in part, to help marketers do more for themselves, and they have many features to reduce work for other departments, especially IT.
In an era when data rules, this core capability of marketing self-reliance makes such systems a useful asset for IT departments as well as for marketing and sales teams. Marketing gets what it needs and is in charge of its own destiny. IT has to support less due to consolidated platforms and a UI that helps marketers to self-serve. And the customers win, too, when marketers present them with more tailored, meaningful experiences and products that make them happy, something that also results in more successful brands.
To learn more about Treasure Data enterprise CDP, request a demo or call us at 866-899-5386.