A New Approach to an Old Problem
Almost every company grapples with some version of the same challenge: how to use customer data collected from various sources to power personalized experiences that boost sales.
The most common solutions currently positioned to solve this challenge are customer relationship management (CRM) platforms.
CRM platforms are ideal for tracking interactions between your business and your known customers, which then enables better personalized marketing and communications. However, CRM platforms come up short when it comes to utilizing the intelligence gleaned from your customer data to its fullest.
Why CRM Tools Come Up Short in Best Use of Customer Data
Since CRM platforms were introduced, things have changed significantly:
• The digital landscape has exploded, generating new types of data and more of it – more than CRM software was meant to handle. Customers interact with companies across more channels than ever, making it difficult to identify individuals across disconnected touch points.
• At a time when customer experience is one of the most important competitive differentiators, the ability to provide personalized marketing messages has become critical to successful campaigns.
Enter the Customer Data Platform: Getting More Value from Existing Data
To solve the problem, smart marketers need to aggregate every piece of useful customer data into a single location to build a “360 degree” view of the customer.
From there, they need to be able to get the most out of their customer data. They can leverage the data for smarter segmentation and customer journeys, analyze the data using machine learning models, and uncover deeper insights to get additional value from their existing customer data.
One compelling new technology that has emerged to achieve those goals is the customer data platform (CDP). Despite the technology’s recent development, Gartner reported in 2017 that 47% of marketing leaders they polled thought they already had a CDP in place.
But wait – that didn’t sound right to us. Or Gartner.
Businesses Look to CRM Software to Provide CDP Functionality – But Come Up Short
The problem with those survey results? It turned out that most respondents identified their CRM tool as their customer data platform. A CRM platform is indeed a database of customer information – and we understand there is confusion around this - but a CRM platform isn’t a CDP.
While CRMs and CDPs exist to solve the same fundamental problem of understanding customer interactions, their capabilities, functionalities and outputs are vastly different.
CRM Platforms vs. CDPs: Comparison of Functionality and Output
Let’s start with a look at CRMs.
CRM System Strengths
Like any highly mature software market, the CRM industry has a few major players and a number of niche competitors.
Those key players – like Salesforce, Oracle, and SAP - are practically household names and have helped propel CRM tools to become the world’s largest software market in 2017, and the fastest growing in 2018.
As a mature product, almost any CRM tool can reliably accomplish a number of useful tasks:
• Consolidate the information of known customers across basic touch-points, like eCommerce sales, into a single database.
• Automate defined marketing tasks, like sending a follow-up email after a prospect downloads a resource on the website.
• Improve customer service interactions by providing transactional data to agents and automated systems.
In summary, CRMs are highly useful for well-defined tasks in specific channels. The problem is that modern customer data is less structured, and flows at much higher volumes than ever before - which has led to the emergence of disruptive solutions like CDPs, which can better turn data into meaningful insights.
CRM System Limitations
• Difficult to integrate into the full spectrum of customer touch points across marketing and sales channels, preventing one platform from powering an omnichannel customer experience.
• Not set up to quickly and easily create the types of custom audience segments that can power effective marketing campaigns. While CRM software remains in high demand, going forward they won’t meet the needs of modern customer data-intensive businesses.
CDPs are Purpose-Built for Effective Modern Marketing
In comparison, the substantial benefit of customer data platforms is that they’re built specifically to address the limitations of CRM platforms - with marketers in mind. That means that where CRM tools fall short, CDPs pick up the slack by offering:
• Single customer identities across all channels, using both deterministic (phone, email) and probabilistic (location, IP address) data-points.
• Broader data integration, allowing for collection and analysis of transactional data plus massive amounts of audience data from many sources.
• Data analysis for automated generation of key audience insights and smart segments.
• Marketing channel integration with automated marketing across email, mobile, social, website, advertising, IoT and more.
• Marketer control, removing IT as a bottleneck and enabling faster reactions to buying signals.
A CDP, unlike a CRM tool, can serve as the foundation of a modern automated marketing stack. In other words, CDPs can deliver the complete customer view that today’s marketers demand.
Can a CDP Take Your Marketing to the Next Level?
If you’re a data-intensive business, with a goal of increasing customer lifetime value, many of the challenges outlined here likely resonate with you. You may be looking for a higher degree of marketing personalization and automation but are unsure of how to achieve it within your existing tech stack.
A CDP will enable you to collect and take advantage of critical customer data immediately, while retaining ultimate ownership. This allows for a single source of truth about customers that enables application of advanced data analysis to uncover valuable insights and power improved personalization.
A CDP collects and unifies data from multiple sources, providing output that is segmented and actionable by channel.
A CDP can even sit alongside legacy systems while powering new customer-facing channels.
With machine learning and your CDP, it’s possible to quickly find insights such as:
• Which customers are likely to fall out of the funnel and should be reengaged.
• Which products are often paired together and therefore can be recommended to boost order sizes.
• The most and least effective channels and tactics in order to optimize resources and reduce waste.
Given these advances, a CDP is both an evolution of CRM or a highly useful augmentation. Either way, it will enable your organization to derive far more value from those massive streams of customer and audience data.
And if you have an existing CRM tool, a CDP can coexist with, and significantly improve, CRM systems that may have taken years to implement.
Ask your team these questions to help decide if a CDP is the best option to take your marketing to the next level:
1. Do you collect customer data in multiple systems?
2. Are success metrics customer-based or channel-based?
3. Is customer data divided between different teams?
4. Is there duplicate data in your current system of record?
5. Does customer segmentation require a request to IT?
If you answer “yes” to most of the above, you’re ready to improve your existing database solution with a CDP.
Want to Take Your Marketing Data to the Next Level?
QuickPivot offers an integrated CDP that enables marketers to deliver coordinated customer experiences across all channels, measure results in real-time, and refine marketing programs to improve performance. To learn more, or see a demo, contact us at quickpivot.com.