Customer data platforms serve as a single point of truth for customer information. They allow you to gather information from many different channels, platforms, and devices into one location to create a whole and up-to-date view of your customer. They do more than sort and file information. They also scrub the data to create a clean and unified record and make that data available to marketing teams and any other stakeholders that could benefit. This in turn allows you to create even more personal and relatable marketing campaigns and content, and to create unique customer experiences that will improve their satisfaction with your company. Indeed, Forrester found that companies effectively using them enjoy 2.5 times more in customer lifetime value than those that don’t. So, is it time for your company to explore customer data platforms? And how should you go about it?
Customer Data Platforms: Are They Right for Your Company?
It depends. While they are valuable in theory, they aren’t actually necessary for every company. If your marketing stack is limited, your customer data is fairly simple, or your product / service does not lend itself to personalization, you may not need to invest in a customer data platform. That’s because the value they bring is the amalgamation of hugely complex amounts of information. If you aren’t working across channels and devices to create incredibly specific and up-to-date profiles of your customers, this type of technology won’t be worth the investment.
However, if you are in the game of tracking lots of user data like social platform experiences, purchasing experiences, etc., and using that data to create marketing campaigns that improve customer experience, then customer data platforms are definitely something you need to consider right now. In fact, they aren’t just something you will want to consider—they’re something you need to implement. There is simply too much valuable information about customers floating right now for any human or human team to keep up with it otherwise.
If you’re thinking, “But I already have a CRM—isn’t that the same thing?” the answer is “no.” A CRM is designed to help your company engage the customer. A customer data platform is like a CRM on steroids. It doesn’t so much help you engage the customer as help you engage them in an even more meaningful way. Likewise, it isn’t a content delivery platform. It simply makes your content delivery that much more personal and effective.
Customer Data Platforms: Are They Only for Marketing Teams?
While the most obvious source of value driving the adoption of customer data platforms is marketing, that’s not the only team in your company they could benefit. For finance teams, for instance, real-time customer data can help make smart, quick decisions about products, services, and other company investments. For IT teams, it means fewer interruptions requesting data pulls and analytics; marketing teams can manage those on their one. For development teams, better data means better decisions on how much product to produce where and when. And obviously, better data means better decisions for the C-suite overall.
Customer Data Platforms: When to Invest (And What to Expect)
The same reason you’re looking to invest in a customer data platform—complexity—may be the reason you need to lower your expectations about what your customer data platform will be able to do for you. Indeed, there’s still a lot of confusion among users about what customer data platforms are designed for. More than half of companies using customer data platforms said their technology wasn’t able to ingest data from any channel. Even SalesForce has had its issues. Meanwhile, 85 percent of satisfied users said they were planning to change providers to see what else is out there.
As with any new or breaching technology, there are going to be some growing pains in getting the technology right. Regardless, most agree customer data platforms will be a must-have as we continue in this unprecedented age of data and customer experience.
Please check out my interview with Satish Thomas, Director of Product Management for Microsoft Dynamics 365 for more insight on data, marketing technology, and customer insights in our current situation: The Future Of Customer Data Platforms.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
The original version of this article was first published on Forbes.