Marketing automation to customer data platform – is it time to make the switch?
As channels and data sources have expanded over the last couple of decades, the gap between marketers and the data they need to be successful has grown. Until recently, the primary tool marketers focused on to efficiently deliver marketing activity and manage data was marketing automation platforms like Eloqua, Salesforce Pardot, Hubspot and Marketo to name a few.
Within businesses using marketing automation systems, we’re increasingly seeing a trend, particularly at enterprise level, of incorporating or migrating to customer data platforms to unify richer data sets, creating insight that marketers can then drive more meaningful action from, positively impacting the customer experience at every stage.
In this blog we’ll explore:
- The difference between marketing automation and customer data platforms (CDPs)
- Why organizations are beginning to shift their focus from automation to CDPs
- The advantages of incorporating a CDP over just using marketing automation
- The key points to consider when implementing a CDP
- Why Formulayt Solutions is perfectly aligned to support the move to CDPs
Marketing automation and customer data platforms – what’s the difference?
Customer data platforms and marketing automation software are tools that help marketers enhance customer experiences, but they are not the same.
Marketing automation uses software to automate monotonous marketing work. Marketing departments can automate repetitive tasks such as email marketing, social media posting, and even ad campaigns – not just for the sake of efficiency, but also to provide a more personalized experience for their customers.
According to Oracle a customer data platform is software that collects and unifies first -party customer data from multiple sources, to build a single, coherent and complete view of each customer.
CDPs aim to provide actionable insights for marketers to fuel future campaigns, while marketing automation systems aim to drive campaigns with insight focused on a narrow part of the sales funnel .
Ultimately, the key difference is that CDPs take automation a few steps further. CDPs unite data from a broad range of sources including the web, online channels, customer profiles and product usage data. They collect and process this data in real-time, to deliver personalized experiences, drawing on this data to recognize the customer and adjust the experience accordingly. They activate bespoke marketing campaigns, rather than simply segmenting customers based on rudimentary parameters, and they can apply machine learning to lead scoring to improve accuracy when targeting audiences.
Why organizations are beginning to shift their focus from automation to CDPs
According to the CDP Institute, while marketing automation platforms are valuable for taking immediate action when working within a single channel or a small data set, a CDP envelopes multiple channels, firmographics, scoring models, and other real-time consumer behaviors to incorporate the insights that marketing automation platforms neglect.
A 2020 report by Aberdeen cited that large firms typically have more customers, which means they collect more data related to interactions with these buyers and tend to have more complex relationships with each buyer.
Data quality is the number one challenge companies struggle with when using data in their customer experience activities (marketing, sales, service and commerce).
Comparing the performance findings of larger organizations using CDP to those not using one shows there is a direct correlation between firms using this tech and achieving superior business outcomes.
“Good customer experiences start with good data. Great customer experiences start with great unified customer data”.
The Drum, 2022
Designer
Customer data platforms (CDPs) are growing in importance for a reason, and the market for these platforms is expected to grow 34% year-over-year. Why? Because CDPs are crucial to helping businesses understand their customers, build audience relationships, and drive revenue.
Advantages of Customer Data Platforms when compared to Marketing Automation
Marketing automation platforms automate marketing communications and enhance marketing campaigns, which can drive ROI. While marketing automation brings many benefits to businesses, CDPs can take organizations to the next level by enabling access to customer insights across many data sources and through the entire customer journey.
- Build unified customer profiles
A CDP acts as a central hub for all of your customer data. So even if you launch campaigns on social media, email and search, you can gather all audience information in one place. This way, you can better understand each customer’s journey and more effectively reach them with new strategies.
This aggregation is especially important as businesses now have more touch points than ever through which to reach customers. Instead of getting overwhelmed with data management and shying away from trying new platforms, businesses can use CDPs to make sense of all this information and put it to good use.
- Deliver personalized experiences
With more data comes more opportunities to launch personalized, relevant campaigns for your customers which is what customers value when it comes to their individual experience.
As David Raab, founder at the CDP Institute, said: “Customers demand personalization. You can’t meet those demands without having a unified customer profile assembled. CDP is the only system which does that effectively.”
- Increase customer satisfaction
According to Aberdeen, having a CDP can drive a 9X increase in customer satisfaction, a 2.9X increase in annual growth, and a 5.7X boost in average annual spend. The more customers get to enjoy content that actually meets their interests, the easier it is for them to make purchasing decisions, trust brands with their information, and become loyal buyers.
- Save time and money with sophisticated automation
CDPs like CRMs are data hubs. But they are also equipped with the capabilities to activate that data through artificial intelligence and automation.
For example, a CDP may be able to use a customer’s buying history to anticipate how and when they’ll buy in the future. This way, you can meet them at the right time with the right messaging — ensuring that your budget is going only towards campaigns that are most likely to convert.
- Predict future behavior
With machine learning, CDPs can relate different groups of data to predict customer behavior and create new segments of high-quality audiences. Businesses can then use this data to make real-time campaign decisions and stay ahead of the competition.
Key points to consider when implementing CDP
According to Raj Kini on CMS Wire “The biggest mistake companies make with CDP implementations is not bringing IT and marketing teams together to make sure the implementation delivers the promised benefits of the investment.
Many companies make the mistake of evaluating CDP vendors just on technical capabilities without first identifying what the marketing and business needs and use cases are. The use cases could vary significantly and different CDP vendors have strengths that meet certain use cases better than others.”
The following use cases are worth considering when looking at CDP providers:
- Email segmentation and marketing campaigns
- Webform solution
- Web analytics integration
- Social media and paid platform integration
- Data enrichment integration
- Loyalty based personalization
How is GCDC aligned to support the shift towards CDP?
- Clean and consistent data – GatedContent’s reason for being is that it provides clean first party data that you get from the user (Zero Party Data). This is critical when it comes to CDPs as pushing new data into the CDP that is well structured and clean means data is usable and customer experience can be accurately tailored to each individual’s journey.
- Attribution measurement – Formulayt Solutions also has built in attribution measurement allowing you to feed accurate attribution data into the CDP, which can help support the generation of longer term insights.
- Migration – CDPs don’t usually have a native web form solution so migrating from marketing automation to CDP means a web form solution will need to be built or integrated. Formulayt Solutions is web form solution that offers accurate, consistent and reliable data and it’s CDP ready.
- Team integration – implementing a CDP requires bringing together multiple stakeholders including marketing; IT; sales; legal; compliance; product teams and customer success. Formulayt Solutions has already been built around the idea that you have to create a data capture process that all teams have a say in, allowing you to create Governance. As a result the process of involving multiple teams when setting up a CDP in your organization is much more straightforward.
Implementing a Customer Data Platform is an ideal solution to delivering outstanding personalized journeys for your prospects and customers and achieving truly data-driven decision making, and it’s a transition Formulayt Solutions’s technology is ideally placed to support with.
To help support your decision, check out The Forrester New Wave™: B2B Standalone CDPs, Q4, 2021.