Article

Prasanna Chitanand
Prasanna Chitanand 16 August 2022

Why Use a CDP For Marketing Automation?

For marketers, it is not possible to build a business without building strong relationships with customers. Thus, the success of any business depends on how effectively a business exceeds customers' expectations. Hence, there arises a need of using a CDP in marketing automation to focus on quality customer service.

Data continues to be an essential ingredient of email marketing. But with the explosion of data, there arises a need for marketing automation to change the pace of ESP in the next-gen digital world. The evolution is still in progress, and it’s the turn of the Customer Data Platform (CDP) now to be involved in the process. 

After data, what marketing automation requires is the combination of various data sources in order to provide a single customer view. The last step is to make sure that all channels are beaming the same message and not communicating different messages. But remember that these things can be done without adding to your team’s work. A CDP can play a crucial role in this. 

But First, is Marketing Automation Really Required?

That is an important question today. Nowadays, no one is talking about simple data because complex data is replacing it. This includes the use of various types of data such as transactional, behavioral, and channel data.

All of it comes from numerous sources and needs to be integrated, and then the appropriate algorithms and data analytics models have to be deployed to deliver targeted email campaigns. All of this cannot be handled by a team of humans. 

Marketing automation not only provides the chance to deliver multiple campaigns but also reduces manual tasks, leaving marketers more time to do other important tasks.

Benefits of Marketing Automation

B2C and B2B enterprises can make effective use of marketing automation technology. B2C businesses use it most as they want to personalize their messages to audiences.

Businesses use email marketing tools to segment their customers and deliver promotions or offers to a segment of customers. Businesses prepare email marketing lists based on demographics such as age, geographic location, past purchase history, and occupation. They use these criteria for their customer segmentation.

The objective behind this is to send the right message to the right people. Many email marketing platforms such as HubSpot, Mailchimp, etc. will help businesses to gather, and store customer information. This information can be used afterward for segmenting customers. 

So What is a Customer Data Platform (CDP)?

A CDP is a software application that collects customer data from different sources like APIs, exported files, and microservices, and shows the data on a single platform. It brings together data from sales, marketing, and legacy systems, ERPs, and CRMs to create a strong record of the customer, and ensures that data is easily accessible by customer support, finance, and sales teams.  

A CDP lets organizations understand their customer behavior, and helps in retaining, and acquiring new customers. It provides real-time analytics, and reporting, which helps you monitor customer behavior across multiple devices, and channels. 

Standard CDP Features

Businesses expect customized solutions from CDP to meet the requirements of their sectors. It is a powerful marketing system that combines enterprise consumer data from different channels. It offers value-added, and good optimizing options for marketers. CDP integrates specialties of DMPs, ERPs, MSPs, CRMs, and workflow management tools in collecting customer data and analyzing it.

What to Expect 

  • CDPs gather customer information at the individual level and gather first-party identifiers such as first-party cookies and device IDs. 
  • Customers' online and offline activities can be monitored by a CDP. It unifies their social media handles, emails, important communication channels, and phone numbers. 
  • CDP provides the latest segmentation capabilities. With its extensive features, you can create market segments without difficulty. 
  • CDP solutions get data from a raft of sources, prepare that data and classify them to ensure that the data can be used for particular reasons. 
  • A CDP supports automation because the data is sent to analytic tools for processing purposes. This will provide beneficial insights in real-time. 

Difference Between Marketing Automation Platform and a CDP

Here are some ways how a CDP differs from a marketing automation platform: 

Sources of data: CDP can pull out data from online sources, customer profiling, call centers, store data, and the web. 

Turning data into actionable insights: The role of marketing automation is to manage campaigns from the collected and stored data. The role of the CDP, on the other hand, is to provide insights for targeted campaigns. 

Real-time personalization: Marketing automation can link a few channels including email to manage targeted campaigns. But the CDP will deliver value-added, and real-time personalization. If a C-level professional visits your website, you can change the customer experience strategy accordingly with the help of CDP.

Merging three products into one: It replaces your marketing database along with marketing automation. It merges three different aspects like ESP, marketing database, and marketing automation into one solution to save cost. 

Listed below are 5 differentiators:

  1. Purpose
  2. Customer records
  3. Data prowess
  4. Use cases
  5. Flexibility to modernization

Let’s discuss each of these briefly:

Purpose: A marketing automation system saves you valuable time from executing campaigns in a repetitive way via one or many channels. Whereas, CDP uses an ML-oriented processing system to provide a single view of all customers interaction in a single place.

Customer records: CDP has capabilities like data ingestion, and unification to help marketers identify the true records of the customer. Automation is limited to just the interaction data in opposition to structured data present in CRM. 

Data prowess: Marketing automation tools don’t pay attention to unstructured, and anonymous data and absorb only structured data from CRM. Whereas, CDP has various data connectors to ingest different types of data including unstructured or anonymous and structured data using machine learning.

Use cases: A marketing automation system can only serve one major goal of designing & running campaigns, whereas CDP use cases are mentioned below:

  • Compilation of customer data
  • Privacy compliant access to customer records: The CDP platform complies with all compliance regulations (including CCPA, GDPR, PDPC, etc.) suitable in each operating country. 
  • Targeted customer campaigns according to segmentation
  • Improvement in conversion rate using both customization and Personalization

Flexibility to modernization: It’s difficult to expect flexibility to modernization in marketing automation. Whereas, CDP provides if completely flexible to come up with new innovations to improve the product. 

Businesses gain detailed insights into their customer journey using a CDP vs. marketing automation tool. Both marketing automation and CDP are completely different, so marketers don’t need to compare them, and accept their presence to add value to their business. 

Customer Data Platform Use Cases for Marketers

A customer data platform can enable the below-mentioned use cases for marketing teams:

  • As a business, you need to generate automated lists of known customers with real-time information about them to allow the real-time execution of campaigns.
  • As a marketing professional, you need to find out why customers have abandoned a cart, and identify the ultimate way to inform them of the items they abandoned in the cart.
  • You need to track customer journeys across different touchpoints.
  • As a professional marketer, you need to create customer insights and send those to your product teams, so that they can use those to develop the best product. 

Why Should Marketers Have a CDP?

According to the 2019 Selling Challenges Study of Richardson, a major challenge for marketers is to convince their customers to switch products. Marketers fail to identify the factors that influence customers’ buying decisions, so they won’t convert leads.

Here, the CDP plays a vital role by providing real-time statistics on the latest market. This enables marketers to understand the factors that influence customers’ preferences. Hence, marketers can prepare effective marketing strategies to meet the needs of the market.

Richardson’s report also says that 25% of marketers encounter difficulties in providing value to their customers. It indicates that sales professionals create irrelevant pieces of information. They should understand their target market to prepare informative sales videos, social media ads, and brochures.

With CDP Solutions, the marketing team will get content-oriented data related to their customers. As a result, they can create value through both personalized products, and services. 

Final Words

Now, it’s the right time to combine both platforms and let the automation do the remaining work for you. By doing this, you can keep yourself active in your market niche. This combination will help you reach the right audience at the right time with the right message. 

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