Data not included: 4 ways to use first-party data to get the most out of your CDP
Customer data platforms are not a silver bullet, says Peter Rogers of agency Merkle. For The Drum’s data deep dive, The New Data & Privacy Playbook, he argues that they only work well if your first-party data is in order too.
Customer data platforms: only as good as the first-party data they're built on? / Possessed Photography via Unsplash
Activating data to drive personalization has become a must for marketers, making customer data platforms (CDPs) highly desired. However, like the dreaded phrase ‘batteries not included’ on Christmas morning, many CDP buyers are underestimating the importance of building a first-party data strategy to get the most from their platform. The true return on investment comes from leveraging your data asset.
The pandemic has spurred a digital revolution, raising the bar for marketers to comprehend their customers’ needs, preferences, and behaviors – and to deliver relevant and targeted experiences across channels and devices throughout the sales cycle. As a result, CDPs’ popularity has skyrocketed, since they offer a powerful solution for collecting, managing, and activating customer data for the brands that can build the right strategy to power it.
How to get the most from your investment
CDPs are incredible tools, but they aren’t magical, out-of-the-box quick fixes. To get the most out of your CDP, it is essential to focus on four key components: identity resolution, your first-party data asset, organizational transformation, and a use-case-driven approach.
1. Start with identity
Identity resolution is the process of merging data from different sources to create a single, unified view of your customers. It’s crucial for the success of your CDP.
The quality of your customer data determines the effectiveness of your CDP; you need to ensure that customer profiles are accurate, up-to-date, and complete as soon as new data is gathered from your customers and prospects.
This process can be enhanced by incorporating third-party data. With a comprehensive understanding of your customers’ identities, you can deliver personalized experiences and improve customer engagement. By prioritizing identity resolution, your organization can leverage the power of your CDP and unlock its potential.
2. Build your first-party data asset
While identity is at the core of your profile, the ability to gather, cleanse, and enrich your data is equally important in creating a data asset that can be accessed and utilized across your organization. Having a standardized data model is imperative to make your data usable by all business units.
For a first-party data asset to be rewarding, having a common definition of your data is essential. This will allow for enterprise business intelligence that can inform data-driven insights, find new audiences, and enable marketing to create addressable experiences. With identity at its core, a first-party data asset can be integrated with your CDP (or CDPs) of choice and other platforms to drive rich customer experiences.
3. Align your organization
Another crucial aspect of value realization that is often overlooked is organizational transformation. A CDP is not only a technological solution but also brings process change to how customer data is approached and activated. This requires buy-in from all teams across the company (including IT, marketing, and customer service) to ensure that everyone is working off the same customer profiles and utilizing the insights collected by the CDP.
Building a culture of data-driven decision-making is essential to empower your teams and maximize the return on investment from your CDP. By doing so, your organization can fully leverage the benefits of a CDP.
4. Focus on your use case
A CDP is only as powerful as the use cases it supports. By identifying the most important use cases for your business, you can ensure that your team is using the CDP to deliver the right insights and activations. Whether it’s personalization, segmentation, or predictive analytics, it’s critical to have a clear understanding of what you want to achieve, so that your IT can support your goals, and marketing can organize and collect the data needed to power them. Select these use cases before making a purchase; various vendors have a homed-in focus that might better suit your organization’s needs.
To read more from The Drum’s latest Deep Dive, where we’ll be demystifying data & privacy for marketers in 2023, head over to our special hub.
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Merkle is a leading data-driven customer experience management (CXM) company that specializes in the delivery of unique, personalized customer experiences across platforms and devices. For more than 30 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios.Find out more