Exploring the Composable CDP Potential for Effective Marketing

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Marketers can improve their customer experience strategy by gaining a single access point to client data by combining all online and offline sources.

First-party customer data is one of the most valuable assets for contemporary digital organizations. The emergence of the privacy-conscious consumer has significantly moved away from third-party tracking techniques.

Companies are rushing to implement a data architecture that can support personalized interactions. Their method is to exploit first-party data.

Businesses must layer actionable intelligence on top of their first-party customer data to engage customers effectively. To develop intelligence that can continuously improve customer experience, a company must:

  • strengthen its relationships
  • gain customer trust
  • then gather first-party data

It was not easy to compile a comprehensive behavioral data set reflecting client interest and intent earlier. Using the data to draw accurate conclusions and predictions about specific customers was even harder.

Additionally, activating such intelligence across many customer touchpoints and marketing platforms took time. This is the point where CDPs come in to ease marketing efforts. Customer data platforms (CDPs) help businesses overcome these key obstacles.

What are customer data platforms (CDPs)?

Cloud CDPs provide a ready-to-use method for gathering, purifying, and activating consumer data. Yet, organizations that have adopted them have long suffered with their restrictive data models.

They have protracted onboarding processes and data duplication across analytics and marketing platforms. In the fiercely competitive retail sector, most goods are readily available online.

The customer journey must spread across all points of contact and marketing touchpoints. Paying attention to their demands and meeting their expectations can assist in enhancing conversion rates (CR) and boosting customer retention rates (CRR).

Businesses aiming to boost profits and spur growth to invest in:

  • marketing automation
  • digital sales channels
  • customer relationship management software

One of the most important elements of the CX portfolio is the Customer Data Platform, which focuses on managing consumer data. It offers capabilities to assist representatives of various departments who define multiple stages of the customer experience.

With CDP, all data from various dispersed sources may be combined, including sales data from CRM systems, customer service center interactions, and transaction histories kept in stand-alone software.

Marketers can improve their customer experience strategy by gaining a single access point to client data by combining all online and offline sources.

CDPs allow for analyzing individual-level consumer behavior across time and optimize the timing and targeting of messages, offers, and customer engagement activities.

The elements that make up conventional CDP offerings comprise the following groups:

  • Data Gathering: CDPs gather customer events from various sources and add these actions to the customer profile. These events include metadata for precise context regarding the customer’s digital engagements. Event gathering typically aims to help marketing use cases like marketing automation.
  • Data Modelling and Storage: CDPs offer a private data repository that collects and maintains various sources of consumer data from the majority of the company’s SaaS and internal apps. The unified database provides a 360-degree view of each consumer and serves as the company’s single source of truth. Most CDPs offer tools for building bespoke user attributes and out-of-the-box identity stitching functionality.
  • Data Activation: CDPs allow users to create audience segments using the platform’s data. These audiences and other consumer data points can be delivered to and from different marketing channels using various pre-built connections.

Introducing the Composable CDP

An off-the-shelf CDP includes a composable CDP:

  • Data collection
  • Data storage
  • Modeling
  • Data Activation

Organizations may build a much more extensible CDP solution that can handle challenges beyond the popular use cases of off-the-shelf CDPs.

It implements a product at each layer of the composable CDP. When developing their composable CDP, teams may make the best architectural decisions by thoroughly understanding each element.

The Advantages of a Composable CDP

There are four major advantages to using a composable CDP as opposed to an off-the-shelf CDP:

1. Improved data governance

Taking ownership of and maintaining total control over consumer data is essential in today’s privacy-conscious society and with constantly changing data legislation.

A composable CDP gives complete transparency, assurance, and audibility at every stage of the client’s data architecture instead of an off-the-shelf CDP managing all the customer data.

Brands may guarantee that they comply with GDPR, CCPA, and any upcoming regulations by managing the following:

  • Personally identifiable information gathered
  • How data is stored and modeled
  • What data to share with marketing partners

2. Better Data Quality Leads to Better Results

Businesses need a constant source of behavioral data that is well-structured, trustworthy, accurate, explicable, and compliant. It should describe what clients are doing minute-by-minute. That is necessary for advanced personalization and segmentation of campaigns.

Marketers can choose the events and entities appropriate for their company’s operations and how to model data for activation with a composable CDP.

Although firms can export behavioral data from a commercial CDP, they never use data models outside their platform. Before activating the data, CDP data exports from atypical table architectures necessitate complex joins and transformations.

Instead of relying on the black box models provided by off-the-shelf CDPs, teams can directly leverage the behavioral data. Marketers can expand their opportunities and increase campaign revenue with more accurate models.

3. Future-ready and modular by nature

When you use composable CDPs, avoid the off-the-shelf CDPs. They come with challenges of vendor lock-in and one size fits all approach. Buying a customized one will allow to select each component’s top-tier collecting, storage, modeling, and activation tools.

As a company’s needs change, marketers may add to Composable CDP to meet the needs of each of the teams. This is better than starting from scratch with a new stack, which would be risky and expensive for a company.

To ensure that the team can produce correct and legal marketing efforts, teams also have the freedom to choose their identity resolution strategy with a modular design.

Utilizing all accessible consumer data points, an organization has complete control over how and when to assemble user identities.

4. Across the marketing team and other teams, a single source of truth

Teams can do more with their lakehouse, rather than adding another data silo to the tech stack. All teams can access complete customer profiles and insights from throughout the business.

Data lakehouses serve as the composable CDP’s single source of truth. They can activate it through a simple UI and procedure. CDPs can use a single source of truth in situations ranging from internal reporting to product analytics.Therefore, its uses are not limited to marketing use cases.

Also Read: Data Management Platforms (DMPs) Vs. Customer Data Platforms (CDPs)

5. Getting Going

Implementing an off-the-shelf CDP, especially at the enterprise level, can be difficult. Product engineering teams must deploy data gathering because CDPs focus on their customer databases.

To do this, they must track user characteristics and events across numerous websites, backend services, and apps using CDP APIs and SDKs.

Before marketing initiatives can even start, the implementation frequently takes 3-6 months.

Brands can choose the optimal solution and parts for the business in stages. The Composable CDP can solve the most significant problems, progressively. Through the process, marketers can educate themselves, future-proof their work, and swap out key parts when their needs change or a certain tool isn’t “cutting it.”

Swapnil Mishra
Swapnil Mishra
Swapnil Mishra is a global news correspondent at OnDot media, with over six years of experience in the field. Specializing in technology journalism encompassing enterprise tech, marketig automation, and marketing technologies, Swapnil has established herself as a trusted voice in the industry. Having collaborated with various media outlets, she has honed her skills in content strategy, executive leadership, business strategy, industry insights, best practices, and thought leadership. As a journalism graduate, Swapnil possesses a keen eye for editorial detail and a mastery of language, enabling her to deliver compelling and informative news stories. She has a keen eye for detail and a knack for breaking down complex technical concepts into easy-to-understand language.

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