What Problems do a Customer Data Platform Solve?
The Customer Data Platform (CDP) market size is expected to grow from USD 730.1 Million in 2018 to USD 1,491.2 Million by 2023, at a Compound Annual Growth Rate (CAGR) of 31.5% during the forecast period. The increasing demand for customer data platforms from business enterprises is the primary factor driving the CDP market growth over the forecast.
But what problems can a Customer Data Platform solve?
Let’s break down some of these challenges.
5 Common Marketing Challenges a Customer Data Platform Can Fix
1. The Time Challenge
Many businesses struggle to utilize customer data fully—in fact, 63% of marketers say they don’t use it as effectively as possible.
If that sounds like your business, you’re not alone. According to Gartner, only 5% of customer data is used for marketing and sales activities, and nearly 50% goes unused altogether. That’s because tracking customer interactions and activities across multiple channels, including e-mail, social media, web browsing behavior, and more, is incredibly time-consuming without technology to help you organize all of it. Luckily, there are solutions out there— Enterprise Customer Data Platforms (CDP). These platforms allow companies to unite customer data from across systems in one place so businesses can quickly gain insights into their customers.
2. The Scale Challenge
Not enough customer data or too much, whatever side of that spectrum you’re on, scaling up your business is always a challenge. To get to where you want to be, you need insights from across your entire organization and beyond. But legacy systems make it difficult for marketers and analysts to get at crucial data from other departments. That’s where customer data platforms come in—they gather information from multiple sources into one place so teams can collaborate effectively and gain insights faster than ever before.
2. The Personalization Challenge
The biggest challenge businesses face constantly changing, making it challenging to deliver personalized customer experiences. A data platform can solve this problem by aggregating all of your customer information in one place, so you have complete visibility into their behavior across multiple channels. With all of your customer information at your fingertips, you can create highly personalized experiences for each of them based on what matters most to them—like their last purchase or order history.
The Analytics Challenge
Customers store more and more of their information online, but most companies struggle to sift through all of that data and learn how to leverage it effectively. It’s difficult for businesses to connect different types of data (such as web analytics, loyalty card data, and purchase history) into cohesive customer profiles that can help them generate more revenue. As a result, companies often don’t capture all of their available insights. But here’s some good news: A customer data platform helps make sense of your customers by integrating your company’s various datasets in one place. That way, you can start learning what drives—and hinders—your business.
The Audience Development Challenge
Audience development is often cited as one of B2B marketing’s biggest challenges. Marketers are tasked with increasing brand awareness and consideration, but existing customer data platforms make it hard to create relevant messaging for particular subsets of customers. A new breed of platform called a customer data platform (CDP) bridges these gaps by providing user-level information about target audiences. This type of technology makes audience development more effortless, more effective, and more efficient than ever before.
It provides both business and technical benefits. Business-wise, CDPs let marketers get under customers’ hoods and peer into their buying habits, behavior, and preferences. This allows you to tailor messaging and offerings to reach your audience at each stage of their journey. This can reduce wasted marketing spending because you’re talking to customers about where they are in their journey rather than trying to push them through it with content that doesn’t matter.
In conclusion, CDPs solve an array of problems that currently plague businesses all over. When you couple advanced functionality with robust security and broad access to data, it’s easy to see why customer data platforms have taken off so quickly. For those interested in trying one out for themselves, Muse Digital is there to help. We also provide tips on how to move beyond essential tools, identify which solution best fits your organization, and manage your campaign effectively. We hope you find our insights helpful!
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