What does a customer data platform do for eCommerce sales?
Updated: Jan 20, 2022
Find out why and how you should use a customer data platform to fuel your e-commerce growth.
If you run an eCommerce store, you know customer data is essential to your success. What do you do with all that data? A customer data platform (CDP) can help you manage and use all your customer data to increase sales and improve customer loyalty. So, what is a CDP, and how can it help your eCommerce business?
What is a Customer Data Platform
A customer data platform is a perfect way to manage and analyze your customers. The software designed for business allows marketers to have access to all their information in one place. This access makes them more efficient when reaching out, understanding what drives purchases or anything else related to marketing tactics. It's also great for helping track which media best resonates with certain demographics!
A customer data platform is a system that marketers can use to collect and integrate their customers' information. The result will be an organized profile for each individual in this database, with shared data going back out into other applications within the company or outside it!
For a common definition, a CDP is a marketer-managed system designed to collect customer data from multiple sources, normalize it, and build unified customer profiles. The result is a persistent, unified customer database that shares data back to other marketing applications.
Benefits of Customer Data Platforms
There are many ways to realize value when implementing a customer data platform. The technical benefits include unifying data from many sources, breaking down other data silos, and democratizing data to customer-facing business users. The business's financial benefit comes from increasing Revenue per Customer by seeing segments are willing to pay more, return to buy again, or sign up for a subscription. These metrics will lead to getting a return on investment for your CDP.
The benefits of a customer data platform depend on your business value. Good news! Apply your new marketing technology to do many things you need to do. Here are some that give businesses a sales boost.
Increases Revenue through more conversions
Increases Customer Satisfaction through better reviews and ratings
Drives Up NPS with better overall customer experience
Healthy Engagement Scores through better segmentation
A CDP for new customer acquisition
The use of segmentation has been integral in the marketing world for years. It allows companies to better target and serve their customers with a more tailored message, which leads them back into relevance in an ever-changing market landscape. The more time a prospect lands on your website, the greater the likelihood of becoming a customer.
Marketers can more effectively target prospects by capturing real-time analytics of their campaigns. By analyzing customer-centered metrics, marketers can quickly see what is working and related insights. Marketers can run lookalike campaigns with segmented audiences with previously worked promotions and propositions. Lookalike audience has shown a higher click-through rate 90% of the time.
In addition to lookalikes, CDPs impact new customer acquisition by being the central hub for automating digital marketing campaigns across the brand portfolio and the different channels your customers prefer. Customer data coming into your systems must be normalized to understand it consistently. As you create meaningful campaigns, you will then use a CDP to orchestrate personalized customer experience across your mobile app, digital ad campaigns, social media, and retail shop.
A CDP for upselling and cross-selling
Limited data leads to lost opportunities. Upselling and cross-selling can be 10-30% of your eCommerce revenue for upselling and cross-selling. Marketing teams that can't successfully convert on cross-sell and upsell opportunities often don't have the information all in one place. When your Customer needs it most, they are not ready to make conversion happen right away. These marketers are missing out on conversions because of confusing dashboards or spreadsheets filled with separate pieces of content from various business applications (like email campaigns, CRMs). Every business has this problem. It is just to what degree?!?
With the implementation of CDP, marketers build and work from a customer-centric view. Both man and machine work on customer data from past purchases, the timing of past purchases, communication preferences, preferred buying channels, previous categories researched, and loyalty status. The CDP automatically organizes and normalizes the customer data to provide more meaningful insights on what the Customer may need next. If you want to suggest a superior model at the premium price point, your strategy calls for data-driven personalization often driven by a recommendation engine run on a CDP.
A CDP for Customer Loyalty
For a larger enterprise, CDPs tie different customer loyalty programs that sit together at different sites to frequent any site and be rewarded. At the same time, the chain can gain deeper insights into how customers dine and use reward promotions.
Smaller businesses still need to focus on customer loyalty, but instead, for cross-location use cases, a CDP is used to understand customer behaviors that influence repurchase or subscription decisions. Providers of CDP software intended it to be easy enough to use by the business themselves; this includes access to the customer intelligence and analytics the CDP manages.
A great customer experience isn't about making customers happy in the moment; it's building a relationship with them over time. They want to feel trusted and fulfilled by your business - one where they never have any questions or concerns regarding their purchase for future purchases.
So what does a customer data platform do to eCommerce sales? Hopefully, you see that the technology fixes problems that impede delivering a seamless customer experience, whether for the first purchase or using your loyalty points. Marketing automation software helps marketers deliver personalized experiences across channels to reduce friction when converting prospects into customers and loyal brand advocates. The other digital tool that has become critical in optimizing your Customer's journey is a CDP. It provides you with real-time data insights on what's happening with your prospecting efforts, sales campaigns, and post-purchase behaviors so you can get ahead of churn before it happens.