Data remains the fundamental bedrock of effective email marketing. As the digital world rapidly advanced, the role of the Email Service Provider (ESP) had to evolve, leading to the widespread adoption of Marketing Automation. However, that evolution didn’t stop there. The next essential step in modern marketing technology is the Customer Data Platform (CDP).
The Answer to the Modern Marketing Challenge
Today’s marketing landscape demands the integration of an ever-increasing number of data sources. These disparate data points must then be unified to form a Single Customer View. This comprehensive data then needs to be leveraged across an expanding list of channels, ensuring that all communications convey a consistent message. Crucially, this complex orchestration must occur without adding to the workload of your teams. This might seem like a daunting proposition, but a CDP is the fundamental tool for achieving this. As the diagram below illustrates, a CDP can empower you to tackle these issues head-on, efficiently and comprehensively.
How CDP works to solve the challenge (click for larger image)
Email’s New Frontier: The Customer Data Platform
Just a few years ago, Marketing Automation was heralded as the future of email marketing. Indeed, if you look at ESPs from that period, Marketing Automation was frequently highlighted as their primary offering. However, digital marketing moves at an incredibly fast pace. Marketing Automation has now reached the point email marketing was at three years prior. It can no longer adequately manage the intricate data needs of the modern digital marketer. It’s time to move forward, and the future lies with the Customer Data Platform (CDP).
Why We Embraced Marketing Automation
The primary driver for the shift to Marketing Automation was data, data, data. We moved from managing simple data sets to handling complex information. What began as list loading and a few basic variables evolved into using combinations of behavioral data, transactional data, channel-specific data, and relevant information from in-house systems. This meant drawing from multiple sources, combining them seamlessly to deliver highly targeted campaigns. Marketing Automation allowed marketers to execute far more campaigns, often with smaller, more precise audience volumes. The result: less volume, higher revenues, more campaigns, reduced manual effort, and more time dedicated to optimization.
What is a Customer Data Platform (CDP)?
To provide a clear understanding, here’s a definition of a CDP from Raab Associates, founders of the CDP Institute:
*“A CDP is a marketer-managed system that creates a persistent, unified customer database that is accessible to other systems.”*
How does a CDP differ so significantly from Marketing Automation? This is a crucial question. Let’s break down the key distinctions:
* **Breadth of Data and Sources:** It’s no longer sufficient to merely aggregate some online data and trigger emails based on it. A CDP is designed to pull data from an expansive range of sources across your entire business. This includes data from web interactions, all online channels, customer profiling insights, in-store data, call center records, and more. This comprehensive breadth of data in the modern world is what elevates email marketing, enabling truly one-to-one customer experiences.
* **Turning Data into Insight:** While Marketing Automation’s goal is to drive campaigns from collected and stored data, the core objective of a CDP is to generate profound insight. You will continue to drive increasingly targeted campaigns, but critically, a CDP leverages data insights to inform and shape all your strategic decisions across the business.
* **Real-time Personalization:** Marketing Automation has successfully linked into some channels, particularly email, to power targeted campaigns. However, a CDP delivers genuine real-time personalization. For example, if a VIP customer arrives on your website, a CDP can instantly recognize them and dynamically alter their customer experience accordingly – a capability that transforms engagement.
* **Consolidating Three Products into One:** This is a game-changer – a CDP can not only replace your Marketing Automation platform but also your marketing database. Why manage a separate ESP, Marketing Automation solution, and marketing database? With a CDP, you can achieve all three functionalities within a single solution, realizing significant cost savings alongside vastly improved capabilities.
Evolved Requirements Demand an Evolved Technology Solution
The escalating demands for sophisticated data management were the primary reason for the move to Marketing Automation. These demands have only intensified and will continue to be the key motivator for transitioning to a CDP. Over the last three years, the sheer volume of available data has grown exponentially, and the number of data sources has reached record levels. All this rich information should be driving your email marketing efforts. Your requirements as an email marketer have evolved; you need a system capable of ingesting all these diverse data sources, building a comprehensive single customer view, and making the output accessible – all in real-time. The “real-time” aspect is critical, as traditional database solutions simply cannot meet the demands of today’s digital marketer who needs immediate access to vast amounts of behavioral data.
Choosing Omni-channel Over Multi-channel
Just three years ago, the focus was on running campaigns across multiple channels – a multi-channel approach. Today, the objective is to be truly omni-channel, meaning the same consistent message and experience across *all* channels. Marketing Automation allowed the shift from weekly newsletters to hundreds of daily campaigns, thanks to enhanced data control and automation. We now need to extend this consistency across every channel. Marketing Automation allowed you to control email communication frequency based on customer preferences; now, this control can be applied across all channels. If a customer prefers not to receive daily emails, what would they prefer? With the recent popularity of Direct Mail (where over 60% of the population looks forward to discovering what’s in their mailbox), delivering a quarterly direct mail campaign could be highly effective. However, a direct mail campaign’s success is amplified if it’s preceded and followed by email and social campaigns that deliver the same personalized message to that specific customer. Imagine someone clicking on an email at lunchtime and then seeing a similar, targeted advertisement in their Facebook timeline that night – this is the power of omni-channel consistency.
A key factor to remember is that email continues to be a master channel. Therefore, ESPs that have proactively evolved to understand and integrate robust data management will be best placed to exploit CDPs. Older marketing database solutions are often not adept at managing email or online data in the dynamic ways required today, and slow-moving ESPs will also struggle to keep up. The sweet spot for email marketers lies with former ESPs that always understood the importance of data, building database solutions directly into their systems rather than relying on external partners. The email address, being the most popular identifier for a person online, makes it more logical than ever for the email marketer to be at the heart of omni-channel marketing strategy.
Meaningful Personalization Reigns King
Utilizing the email address as a digital passport in conjunction with a CDP, marketers can now achieve what everyone agrees is paramount: genuine and meaningful levels of personalization. While Marketing Automation enabled dynamic content in email, we are now moving to an entirely new level. Your email (along with all other channels) should be as close to a true one-to-one experience as possible. You know so much about the person you are communicating with that it would be a missed opportunity (in a marketing sense!) not to make that communication entirely about them. Why do generic subject lines still persist? Why are customers seeing products they have no interest in? Why is there a link to a company’s Facebook account when the customer is already signed up and follows them? It’s time to personalize the entire communication journey, extend that personalization to what customers see on your website, and embed it in every other interaction they have with your brand.
Persistent Data Silos? CDPs Offer a Solution
A couple of years ago, a common overestimation of Marketing Automation’s power was its ability to solve the issue of data silos. Unfortunately, these isolated data pockets remain a significant problem today. This, more than any other point, is where a CDP truly differentiates itself from Marketing Automation. The reason a CDP excels at solving the data silo problem is that it allows you to *keep* them! In an ideal world, we all desire a single source of data. However, attempts to achieve this across numerous projects often yield disappointing success rates. Instead of continually focusing on dismantling silos and delaying your communication evolution, focus on your CDP. Let your external CDP navigate around these silos, gathering and delivering precisely what you need to execute effective communications. You can innovate and drive real revenue growth while others continue to pursue the elusive “no more data silos” dream.
**Real-World Impact: World of Books Case Study**
Converting one-time purchasers into repeat customers is one of the biggest goals for any marketer. World of Books wanted to solve this problem but needed a better understanding of which one-time purchasers were most likely to repeat a purchase, to deliver tailored campaigns. By implementing an AI-driven predictive modeler, they were able to identify the highest propensity segment of one-time purchasers. Then, using a control cell, they delivered specific campaigns to half of this segment and standard email marketing to the other half. The results were outstanding. The targeted cell performed 131% better than the control cell. To clarify, by using AI-driven predictive models, one-time purchasers were 131% more likely to make a repeat purchase.
The Future is Here: Machine Learning and AI
Machine Learning (ML) will be critical to your future. Even if it’s not at the top of your agenda right now, the ability to exploit the power of machine learning will drive email marketing to the next level. Let’s use a simple example to illustrate its importance. When the first behavioral email was sent in the UK (in 2003 for William Hill!), it immediately revealed the immense potential for targeted email without extensive campaign management. As Marketing Automation took off, some feared marketers would lose control. The reality was that Marketing Automation actually afforded marketers *more* control – less time spent on the mechanics of delivering a campaign and more time focusing on the message, brand, and optimization of the email. Machine learning and automated predictive models are no different. While there might be an initial fear of losing hands-on control, what we gain is a system that handles the campaign mechanics, predicts customer needs, and allows you to concentrate on crafting compelling messages. We’ve progressed from generic “push” emails to automated emails based on what the customer tells us about themselves. AI-driven marketing automation will enable us to understand *in advance* what the customer wants, rather than waiting for them to tell us. As shown with the real-world case study from World of Books, AI will not restrict the marketer; instead, it frees them to focus on targeted messages without worrying about the mechanics of how to find the right people.
Conclusion: A Bright Future with Customer Data Platforms
A Customer Data Platform (CDP) empowers marketers to overcome significant challenges. Among other benefits, it allows you to stop worrying about data silos, send more effective, personalized communications across all channels, and even realize substantial cost savings. The future of marketing, enhanced by CDPs, truly looks bright!