If you’re a SaaS firm, providing an extraordinary customer experience is what you should be focusing on. This is the true competitive advantage in today’s world. To attain that goal, you need- DATA! Yes. You need advanced analytics on customer data and their behaviors. But the real question here is- Is a dedicated Customer Data Platform (CDP) enough for that purpose?
Well, we know for sure that to succeed in the SaaS business, a CRM (Customer Relationship Management) tool is not enough! It is because connecting different platforms via which cross-functional teams interact with your customers requires much more than a CRM.
When CRM came into the picture, a 360-degree perspective of customers and their customer data analytics got a boost. As a result, businesses were able to design efficient customer experiences. However, these customer interactions occur across a range of channels, not simply sales and customer service. Hence, it was clear that the CRM lacks a standard data model.
As a result, rather than being concentrated in one convenient area, the data is dispersed over a variety of platforms. Customer Data Platforms (CDP) address this issue of “data silos” at the core. Multiple streams of client data are merged into a single platform for enterprise applications.
What is a Customer Data Platform (CDP)?
According to the CDP Institute, a CDP “is packaged software that creates a persistent, unified customer database that is accessible to other systems.” The system enables users to combine massive amounts of data gathered from many channels and sources.
The resulting data gives you a single customer perspective,’ allowing you to create a better customer experience. Customer Data platforms overlap with a variety of other relevant technologies, according to Gartner. There’s a significant overlap with CRMs, and with data infrastructure providers like data warehouses.
CDPs, to be honest, are not platforms. A CDP is more like a piece of software than a platform. That’s OK, but using the phrase platform contributes to the uncertainty about what these tools are for.
Examples include- Mixpanel, Amplitude, Segment, etc.
Difference between a CRM and a CDP
Let’s list out the differences clearly to understand how both the tools compare with each other.
|Manages Customer Relationships||Manages Customer Data|
|Arranges and handles customer-facing interactions with your team||Collect data on customer behavior with your product.|
|A client’s identity, history of engagements with the sales team, and support issues they’ve filed can all be found in CRM data||It may show you every single step a client has taken since first contacting your firm, from how they found you to how they use your product.|
|CRM is for customer-facing roles.||CDP is for non-customer-facing roles.|
|Data is collected manually||Data is collected automatically.|
Benefits of Customer Data platforms
Customer Data Management
This type of data is the most valuable in terms of marketing because it is obtained directly from customers and contains precise information about real people. Furthermore, because your consumers give the data, you have complete control and access to it. As a result, CDP eliminates the privacy concerns that plague other platforms.
Unified Customer View
This is a phrase that refers to a single customer’s perspective. The information gathered from many sources and through various channels is combined into a single record that gives you a complete picture of the client’s journey. This, together with the retrieval of first-party data, yields a holistic “unified customer view.”
Data Security and Privacy
The General Data Protection Regulation (GDPR) and some other data privacy rules have made it more vital than ever to respect your consumers’ data privacy. Data protection, privacy, and compliance with specific data privacy regulations can all be improved using CDPs.
You can quickly integrate a CDP with the other platforms without having to go through the trouble of creating specific integrations.
Customer analytics that is more insightful
Customer analytics entails analyzing customer behavior all through the customer journey to aid in marketing, product development, and sales decisions, among other things.
Customer analytics is made up of four basic components:
1. Collecting Data gathering
2. Sorting Data
3. Storing Data
4. Analyzing Data
Every one of those components isn’t particularly valuable on its own, but when you utilize a CDP to connect them together, you’ll have a formidable customer analytics platform. You may also dramatically boost client loyalty and retention by implementing a proper customer analytics system and, therefore, customer lifetime value.
Problems with the CDPs
You must be wondering if CDPs are so great, then what could possibly go wrong with them?
Restricted and/or Unstructured Data.
When working with unstructured data, you might run into problems since uploading, using, and visualizing this type of data can be tough. Adding another data customer to your total data infrastructure just complicates matters further. So, either you sacrifice the quality of your data, which will cost you in terms of the implementation of your marketing initiatives, or you compromise the impact of the marketing campaigns.
Not understanding the ‘why’.
While customer data is valuable, the real challenge for organizations is what they can do with it. As a result, it’s critical that the user completely comprehends what they can accomplish with the CDP. As a user, you should know why do you need the customer data platform. It is possible to choose CDPs on the basis of segmentation, cross-channel orchestration capabilities, real-time access, and so on. All CDP point solutions might not meet your requirements.
Advanced Analytics are lacking.
We do live in an era of AI (artificial intelligence) and (machine learning). Simple inquiries and straightforward interfaces have a high value for human users, but they do have a poor value for these technologies. How can you include these new technologies into your CDP? This is an issue that many data warehouses are trying to solve.
What you need is a-Customer Success Platform!
Yes! For your Customer Success Manager and the CS team, you need a Customer Success platform like CustomerSuccessBox. Why? As these software tools help you in deriving insights from the data that your data platform provides you.
Let’s see what differences are there between a customer data platform and a customer success tool.
|Customer Data Platform||Customer Success Software|
|Exists since the ‘Pre-sales‘ stage||Comes into the picture only ‘Post-Sales‘.|
|Built for product managers.||Built for customer success managers, account managers, implementation managers, etc.|
|Looks at all customer accounts together.||Looks at a particular user account in detail.|
|Gives you all the data.||Provides you the relevant insights.|
|Example- Segment, Mixpanel, Amplitude, etc.||Example- CustomerSuccessBox, ChurnZero, etc.|
So you see, the prime difference is that a CDP won’t provide you the insight that you probably want to have right now. Remember, data is not an insight. It is just curated information. The answer to “what needs to be done next?” is given only by a customer success platform.
Every customer success team’s job is to ensure that every user has a positive experience with the product and returns for more. The customer success team will have a difficult time accomplishing that goal if they can’t figure out who is and who is not adopting their product.
Include an analytics suite in your Customer Success tech stack. A customer data platform can take you only this far. So, include effective user capabilities and more complex features like segmentation choices in your customer success solution.
This will ensure that you know who to contact next, what kind of content to create for users, and, of course, how efficiently you’re carrying out the tasks.
Suggested watch: Difference between Analytics Software and Customer Success Software
Final thoughts on the Customer Data Platform
CDPs are large, complicated programs. When used effectively, one can provide you with a wealth of information on your customers. After that, you may apply what you’ve learned to better your marketing, sales, and even your product.
A CDP could be the right solution for you if you’re ready to take the next step in understanding your customers. But clearly, that won’t be enough! You need to have a Customer Success weapon in your arsenal. To drive home insights and to take the next best action!
P.S. – The main image has been taken from pexels.com