Customer Data Platform
The first step in using VRM to anchor a transformation in customer loyalty is to collect all the customer data into a single unified database. Data can come from multiple sources – one needs to look at all the touchpoints that a customer has with the brand.
Here is an explanation from Exponea about what a Customer Data Platform (CDP) does:
…It’s a kind of database software: one that creates persistent, unified records of all your customers, their attributes, and their data. A good CDP should both easily integrate with your existing data and allow for easy retrieval of the data it stores.
A CDP builds a complete picture of your customers on an individual level. It collects 1st party customer data (transactional, behavioral, demographic) from a multitude of sources and systems, and links that information to the customer that created it.
This creates a 360-degree customer profile, also called a single customer view, which can then be used by 3rd party tools or built-in marketing automation tools to execute marketing activities and analyze their performance.
Here is more from the CDP Institute:
A unified customer experience is impossible without unified customer data. Most data originates in separate systems that weren’t designed to share it with anything else. Traditional methods for collecting that data into unified customer profiles, such as an enterprise data warehouse, have failed to solve the problem. Newer approaches, like “data lakes”, have collected the data but failed to organize it effectively.
The Customer Data Platform is an alternative approach that has had great success at pioneering companies. A CDP puts marketing in direct control of the data unification project, helping to ensure it is focused directly on marketing requirements. CDPs apply specialized technologies and pre-built processes that are tailored precisely to meet marketing data needs. This allows a faster, more efficient solution than general purpose technologies that try to solve many problems at once.
The idea of a CDP has been around for a long time – its name has changed through the times. Enterprise Data Warehouse, Customer Relationship Management database, Data Lake, and so on. The key point is to collect all the data to help build a unified view of a customer which is the foundation for all customer engagement activities. With a CDP in place, the next action of calculating CLV can be done.
Tomorrow: Part 11