In a new report, titled “Email Data Quality: Compliant, Correct, and Complete,” we looked at data quality practices based on the type of data platform used. We asked marketers, “Where does your organization currently store customer and email data?”

The marketers responded as follows:

  • CRM system (Customer Relationship Management): 53%
  • ESP platform (Email Service Provider): 50%
  • Customer data platform (CDP): 33%

These answers are not mutually exclusive. Organizations could use two or even all three solutions together.

We noticed the extent of the CDP response. While the CDP approach to managing customer data isn’t brand new, it is on the periphery of marketing consciousness. Apparently not anymore!

What is a CDP?

According to Gartner, customer data platforms have evolved from a variety of mature markets, including multichannel campaign management, tag management, and data integration. And Wikipedia provides a good definition of CDP:

A collection of software that creates a permanent, unified customer database that other systems can access. Data is retrieved from multiple sources, cleaned and combined into a single customer profile. This structured data is then made available to other marketing systems.

With the risk of massive simplification and the ability to further develop the definition of customer data, we can say that CDP is a solution that allows companies to bring all customer data under one roof.

CDPs are designed to process multiple data points from many sources. They collect both online and offline customer data. This can include both anonymous visitors and personalized, specific customer IDs.

There are well-established players in the CDP space already, and G2’s excellent round-up lists well-known names including Exponea, Emarsys, Listrak, Tealium, Optimove, and Salesforce Interaction Studio (among others). In addition, a recent analysis showed that Emarsys customers who also use Validity’s certification approval list see an average increase in open rates of 28% and click rate increases of 35%. CDP platform users clearly understand the important relationship between data and technology.

CDP users and marketing effectiveness

The implicit assumption is that CDP users are more sophisticated in managing their customer data, viewing it as a business good, and trying to maximize their return on investment. Our report supports this view:

  • Companies that use CDPs are much more likely to use double opt-in as an email authorization model (1.5X higher than the benchmark answer). They are also more likely to use real-time validation tools like BriteVerify (1.7X higher). CDP users have made significant investments in their customer data capabilities and have a strong focus on populating their platforms with high quality data.
  • The use of centers of preference is an extremely important part of CDP users’ toolkits for collecting customer data (1.6X higher). This underscores the value of progressive registration: visit customers regularly to learn more about their needs and interests, and then use that information to create relevant content and offers.
  • More importantly, CDP users actually use this data to control their communications. Remember the basic GDPR principle of “minimization”: in short, don’t collect anything that you won’t use! The use of subscriber preferences to encourage customer segmentation is up 1.5X larger respondents from CDP users.
  • This approach also informs about how CDP users measure data quality, using “engagement” almost as the primary key performance indicator (KPI) 10% more likely for CDP users. These organizations intuitively understand that a decrease in engagement could mean poor data quality, and they value the importance of the engagement metric.
  • Because these companies have a good handle on their data, they are better positioned to measure the financial impact of their data-driven marketing. CDP users can calculate email cost per acquisition (CPA) 1.15X higher than that of their peers, while the ability to calculate return on investment (ROI) is 1.2X higher.

What does all of this mean for the effectiveness of marketing? Since the COVID-19 pandemic changed our lives, companies have revamped the way they communicate with customers. As the recent DMA awards highlighted, using high quality customer data is crucial to authentically and credibly implement these shifts.

The added breadth and depth of customer data that undoubtedly put CDP users in pole position in addressing this challenge.

Food stalls for those who don’t use CDPs …

What can non-CDP users learn from the above findings that can be incorporated into their own data quality strategies?

  • Learn from the law. In Europe, the GDPR has effectively incorporated many established data best practices into the law. As a result, more robust approval, clearer setting of expectations, and greater choice of choices resulted in higher levels of trust, with consumers being more inclined to provide better quality personal data. Smart marketers don’t have to wait for new laws to appear before making these changes. You will benefit from it now!
  • Promote preferences. Many marketing programs run large centers of preference where customers can define their interests, choose the content they are most interested in, and determine how often they want to receive it. but they are hidden and therefore few people use them. Customers should be encouraged to use their centers of preference as companies benefit from relevant and up-to-date customer data and thus encourage greater engagement.
  • Make value conversations. In our report, Customer Lifetime Value (CLV) is calculated at an impressive ± £ 35 / $ 50. However, the value is increasingly a two-way conversation. It’s not just about how much customers are spending, it’s also about what value they are getting from the relationship. This value can be specific (discounts, free delivery, etc.), but it can also be less tangible (useful information, additional benefits, etc.). When the exchange of values ​​is in balance, customer relationships last longer and the CLV increases. Programs should periodically review the value they offer in order to achieve this balance.

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Would you like to learn more? Sign up for our next webinar as we look at the rise of the CDP as well as many other fascinating insights into data quality with expert guests Tim Bond (Data & Marketing Association) and Kate Barrett (eFocus Marketing).