Five signs it’s time to adopt a customer data platform (CDP)

(Source: Klaviyo)

As your brand grows and you incorporate more tools into your tech stack, it’s time to start thinking about how you put all your customer data into action. 

A customer data platform (CDP) is an essential tool for maximising the value of zero- and first-party data – especially when it comes from multiple data sources. The right CDP serves as a single source of truth that unifies all your customer data across different formats, platforms, and systems – all accessible in one place.

Klaviyo – an intelligent marketing automation platform – has a reimagined CDP suitable for businesses of all sizes that can effectively integrate more than 300 tools to empower smarter decision-making by a brand’s marketing team. 

Jia Lee, senior content marketing manager at Klaviyo, says CDPs are emerging as the technology of choice for marketing professionals. 

“Marketers using customer data platforms have access to key performance metrics such as funnel analysis, recency, frequency, and monetary (RFM) analysis, and customisable calculations such as customer lifetime value,” she explains. “These platforms also provide back-office support with tools for data warehouse synchronisation, data transformation, governance, and personalisation.”

So how do you know it’s time to adopt a CDP for your business? And is a CDP suitable for any business in retailing or e-commerce? Last week, we shared ways a CDP can help you power smarter decisions. This week, we highlight five signs it’s time to take a step into the world of CDPs.

1. You want to understand your customers better 

As your company has grown you have likely deployed new software solutions or add-ons for various functions. That might include an email management system, sales management tools, and website content management system (CMS) – or you may have contracted third-party marketing services. Each of those solutions collects data about your customers and your business, from engagement online or via social media, purchasing history, delivery information, and payment preferences – not to mention general demographic information. 

Typically in this scenario, all of the data is stored and siloed in different locations, often making it difficult to access and impossible to synchronise. A robust CDP like the one Klaviyo offers can eliminate that siloing and merge the various sources of data into one, delivering a more accurate, connected and usable data bank to help your brand engage with your customers in a more personalised, and effective manner.  

2. Your business is growing – and you want to grow faster

No business is too small to adopt a CDP. It is likely that if you are not familiar with the concept of a CDP it is because they have traditionally been targeted towards large businesses. Klaviyo’s CDP is designed to scale to fit the needs of businesses of any size – from small, new-to-market e-commerce companies or physical stores looking to build engagement with customers online to large multinational brands. 

Klaviyo has made the CDP accessible to all – and with a scalable pricing structure making it an affordable investment for any retailer. Making the most of your brand’s data shouldn’t require an extensive technical background, additional hires, or a huge budget.

3. Some of your messaging is off-point or not reaching the right people

No one likes to receive messages that are not relevant to them and all of us have experienced a communications faux pas from a retailer at some point. While they might be easily dismissed with a single click, a lot of consumers go further and unsubscribe from a brand’s communications altogether if they do not believe a message is right for them. 

How do such communication failures come about in the first place? It’s simple: inaccurate or incomplete data has been collected meaning email promotions that may have reached a large number of genuinely relevant customers might also be being sent to people with little or no interest. 

Because the data is across multiple programs, there are limitations on how it may be used. Legacy systems may be responsible for collecting poor quality, incomplete or inaccurate data, making it hard to link customer profiles across different platforms used by the business. When data is available but wrong, you can end up making decisions based on false information. 

Once Klaviyo’s CDP has integrated all of your data and sorted it effectively, you can be confident your brand is sending promotions to the right audience.

4. You want your marketing budget working harder for you 

Deploying the right CDP for your business can save costs by eliminating the need for some third-party software solutions and service contracts, and reducing the time it takes to interrogate and use your customer data. By using data more effectively to manage marketing messages by email or SMS, you will achieve better results, leading to higher sales and more profit.  

5. You want to boost your bottom line 

Every brand wants to grow and if you are in the e-commerce business, the best way to achieve that is by boosting sales and reducing costs. A strong, efficient CDP like Klaviyo helps with both. 

Klaviyo integrates the tasks of other platforms and services you might be using into a single source of truth. You can then use Klaviyo’s email and SMS marketing solution to create effective, personalised, accurately targeted communications across your customer base. 

Using funnels, segmentation and a raft of other leading-edge services incorporated into the platform, you can automate communications with different layers of contacts. These groups include people who have visited your site and abandoned their cart without purchasing, customers awaiting delivery of purchases, loyalty program members, your most active customers, your least active – the list goes on. 

With better-targeted communications – sent at a time when the customer is most likely to read the message and respond – your sales will inevitably increase. And the cost of achieving that sale will be reduced, both driving bottom-line growth. 

Adopting a strong CDP should not be seen as an end goal. It is all about building a solid foundation for the growth of your retail business by streamlining your data management and enhancing your customer insights. 

Ready to power smarter digital relationships and sell to your customers better than ever before? Learn how by downloading the free Customer Data Platforms for Dummies today!