The era of Customer Data Platforms, or CDPs, is just the beginning of a crucial tool for ensuring data privacy compliance. The CDP market is rapidly growing, driven by the desire to enhance customer experiences as well as data security. The need to handle customer data securely is scattered across the board. This is one of the reasons why savvy marketers have begun to understand and confront the challenges of working with customer data. The reason is that marketers want to maintain the trust of customers, who increasingly expect companies to both protect their data privacy and use their data for personalization and customization of their customer experiences (CX). Marketers must see CDPs as an excellent opportunity to manage first-party data correctly in a personalized and compliant manner.
In fact, customers care about their data and their unified customer data profiles, so they do not provide that data to companies that are not capable of managing it. In other words, some companies have access to a wealth of data but do not know how to collect it, what to do with it, or how to leverage it across functional departments. This leads to inconsistent and unsatisfactory customer experiences and a lack of customer retention. However, this disconnection and lack of trust can be easily bridged with CDPs, helping businesses improve customer experiences across channels by understanding the individual needs of each customer and further tailoring experiences to their preferences.
The article below reveals the close relationship between CDPs and customer data privacy, along with how CDPs promote privacy thereafter. It will then list various methods to leverage CDPs for data security.
CDP: Must-have technology
In the world of the digital age, customers are very aware of the digital footprints left behind after every ad they click on. Therefore, to address privacy issues and empower consumers, the Customer Data Platform (CDP) has emerged to bridge the gap between traditional marketing databases and newer digital channels, providing a 360-degree view of the customer.
CDP is the latest marketing technology that helps companies create a comprehensive view of customers by storing data such as website page views, email click rates, and payment transactions. In other words, CDP helps you build a complete picture of your customers at the individual level. Furthermore, when it comes to data protection and consumer privacy trends, CDP stands out. Sounds great, doesn’t it?
A defining characteristic of CDP is that it is a data storage platform, not a campaign execution tool that leverages technology to collect data from customer touchpoints and shares the gathered information across marketing systems. The result is an improvement in marketing interactions and customer relationships. The primary goal of CDP is to consolidate all customer data into one place and unify the data into a single customer profile. Some features suggest and allow you to revisit Customer Relationship Management (CRM). Read to see how CDP differs from CRM and even surpasses it to understand the actual differences.
Increasing Demand for CDP
Significantly, recent concerns about privacy are a consequence of several large data breaches that violated personal data. As a result, consumer data privacy regulations appear to be growing faster than ever. Moreover, how companies handle customer’s personal data has now changed. All thanks to CDP, a force that has become a global wave dominating all privacy-related discussions.
The benefits of CDP are endless for entities looking to excel in the present and future. There is no other choice but to stay away from the Customer Data Platform if you want to effectively manage your customer data. But why is that so? Well, to understand this, you need to realize its advantages. So, here are some of the advantages of CDP that keep its demand high.
Unique Customer Insights
CDP is designed to collect a large amount of customer data from various sources, then unify them to provide a comprehensive view of customers across all devices and ultimately channels, ensuring they are available for other systems. Implementing CDP supports companies in understanding consumers and their behavior. Furthermore, a comprehensive view of customers allows sales, marketing, and service teams to strategically promote tailored messaging to the right people at the right time and place.
Increased Revenue
Alongside demonstrating the best customer data experiences for customers, the ultimate goal of a company is to increase revenue. In fact, CDP, when used in the right direction, can undoubtedly help companies achieve their ultimate goal. CDP allows personalized strategies for each customer, for example, by presenting personalized contact information and suggestions suitable for content and offers that are most likely to convert. In this way, most organizations make use of this valuable data expertise. CDP helps increase customer retention and the company’s overall revenue growth.
Customer-Centric Marketing
Today, customers use more channels and devices than ever before and expect to have a consistent customer experience across all those channels and devices. For example, they do not consider it detrimental to see online ads for a product they have purchased in a physical store. Yes, it’s all thanks to CDP, which has helped companies provide a complete view of customer behavior that can be used to create a seamless customer experience without blind spots. Therefore, it’s crucial for marketers to consider CDP if they want to put customer-centric marketing at the center of their business activities.
Enhanced Operational Efficiency
Before CDP came into play, integrating various different specific solutions and tools to view customer data could consume many resources. However, after CDP becomes operational, customer data centralization becomes easy with ready-to-use integrations. The centralization process helps save time and enhances operational efficiency. Furthermore, CDP allows businesses to build and connect Martech teams to adapt to ever-changing consumer behavior by integrating the keys at hand, thus saving hours of integration work.
How Does CDP Secure Customer Data?
“A Customer Data Platform seems to fulfill the longstanding promise of concentrating all customer data.”
Data is a valuable currency in this world, and its security is the top priority for companies. CDP can open up many doors for securing customer data, so learning how CDP secures data can help you stand out among marketing technologies. However, many companies are still unsure about how to comply with CDP to ensure data privacy. They do not know that CDP can help secure customer data, enabling you to build trust with customers throughout their customer journey.
Still not convinced? Let’s take a look at the following points
More data requires more management
With the rise of the Internet of Things (IoT), businesses now have a great responsibility in collecting data about their customers. Chances are most companies store data in multiple places using multiple sources. This is where CDPs can help companies by serving as a single point of truth for customer information. Yes, you heard that right. CDP is a growing category and suite of solutions that help you collect information across different channels, platforms, and devices into a single location. This in turn creates a single view of your customers, where you can easily determine what data you really need and what data you don’t.
Transparency in data collection
In a world of increasing awareness, customers are no longer stupid and they understand very well that their data is simultaneously valuable and vulnerable. They also know that their data is used in exchange for services that they use for free. This is one of the reasons why they demand transparency about how companies can use their data. A CDP acts as a kind of paper trail for data that customers have access to in order to know where the data originally came from. This is especially important in terms of compliance and privacy regulations such as GDPR and CCPA. Additionally, from a marketing perspective, you do not collect data from third parties and establish direct contact with customers.
Personalization insights
2020 marked a year in which customers not only wanted personalization but also expected it. Consumers often feel that businesses are falling short of personalization expectations, which is entirely unfair to customers. Collecting various meaningful data and being able to provide that data is the differentiating factor that most companies fail to achieve. Well, this can only be accomplished by CDP today because it helps companies understand the value of customer data and how to use it. Moreover, it ensures that marketers have a clear plan to determine how to use the data they collect, at what point in the customer journey, and for what purpose.
Strategies to Leverage CDP for Privacy Assurance
Customer expectations from businesses have risen significantly in recent years. The most evident reason is that customers have experienced well-personalized services and are now looking for businesses that can provide deep, accessible, and well-maintained customer data. There’s no hot news that shows that all of these expectations can only be met by a good CDP. With a good CDP, we mean that integrating CDP will not be enough, and this platform is considered to be used correctly to drive privacy.
Given the immense importance of this issue, the following strategies can be used by brands to leverage CDP to ensure privacy:
Compliance with GDPR and CCPA
First and foremost, both GDPR and CCPA grant consumers the right to request data and information that their respective companies are storing about them. In the absence of CDP, the likelihood of customer data being collected across multiple systems is relatively high. Customer Data Protection (CDP) makes the entire process easier by providing a single accurate source of all customer data. Furthermore, CDP complies with the “Right to Be Forgotten” regulation, helping companies eliminate unwanted customer data quite easily.
Consolidation of First-Party Data
Next, some marketers show a greater dependence on third-party data to create an identity solution, a process used to create a unified customer identification code across various datasets. These third-party data companies, with their best knowledge, match the customer list with third-party data and further enrich that data by sending back a unified customer ID to the brand. However, in this era, where customer privacy is of utmost importance, relying on such sources can be a serious breach of privacy. CDP has its own quality set, allowing them to perform a similar identity resolution process by using only first-party data, thereby avoiding privacy issues.
Implementing Multi-Channel Preferences
Last but not least, CPD has the ability to create a comprehensive gold profile for customer preferences by integrating customer profiles across data sources to create a unified profile. Furthermore, once this gold master has been created, it can be applied to segment rules across different channels to ensure that customers who have opted out of receiving specific communications will not appear on the target list.
In Conclusion
In summary, CDP allows marketers to link data across systems in real-time, enabling them to segment and target their customers better. Protecting customer data can be an essential part of your data security infrastructure, so it’s crucial for businesses to first accurately recognize what CDP can do for them. Creative CDP strategies involve collaboration between marketing, IT, and other departments working together to create a positive and personalized customer journey. Moreover, in the months and years to come, the role of CDP may become even more prominent.
Do you want to position your company on privacy for the long term? Contact us at info@datas.vn, and we will help you explore many opportunities in data privacy assurance.