For most companies, storing, accessing, and using customer data is a massive headache. Duplication of efforts is almost inevitable, and people rarely feel confident that their data is accurate. Even worse, when one department creates a new source for customer data, other departments often aren’t aware or may be unable to rely on it because it lacks critical data.
To combat these challenges, many companies are turning to a customer data platform. A customer data platform is a single repository that houses information about customer identity, behavior, purchase history, and more. Just storing logfiles of this data has limited utility, however, so companies must expand the capacity of those logfiles by making data more accessible.
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Unlike other data infrastructure, a customer data platform is a single system of record that allows all departments to view their customer data through different lenses in the form of marketing and analytics software. This allows for a holistic view of the customer for deep analysis and powers essential business functions such as marketing automation, sales, onboarding, and support services.
The Growing Need for a Customer Data Platform
Businesses can no longer count on product features alone to distinguish themselves. In a world of unrelenting competition, successful companies look to the customer experience as a source of differentiation. For example:
- Today’s customer interactions occur largely online, which generates massive amounts of data. Mobile apps, desktop sites, emails, payment systems, and CRMs all facilitate the customer journey and generate data.
- All this data offers nearly limitless use. Team- and department-level reporting for goal setting, business analysis, and automation of processes can all be improved by analyzing customer data.
- Customers expect companies to use their data to provide better, more personalized experiences.
- Companies are sprouting up left and right with ideas for how to use customer data, resulting in sudden growth on two fronts: data sources and the point solutions to use them. This creates an unmanageable number of possible source and solutions connections.
- A customer data platform reduces complexity, making new connections just a few clicks away.
Ultimately, a customer data platform makes it easier to collect, analyze, and activate data to enhance the customer experience.
Prerequisites for a Customer Data Platform
Before you can create an effective platform, you need to have a few things in place. Most importantly, you need:
- Pipes that funnel information from all of your sources into the repository.
- A solid choice for what point solutions you want. These should be chosen to empower specific people on your team.
- Pipes from your repository that funnel out to all the point solutions you choose.
- Security for the whole system. Naturally, storing personally identifiable information comes with a great deal of responsibility, and you can’t afford to take risks with it.
Building Your Platform
To create a customer data platform that will benefit your company for years to come, follow these steps:
1. Decide whether to build or outsource
If you want to build it in-house, you need a data engineering team of at least four engineers to build a prototype. If that’s beyond your scope, budget for and purchase a customer data platform that can ingest and distribute your data appropriately. Most organizations should not try to build one in-house because construction is complex, expensive, and usually not a part of their core competencies.
2. Hire a good team
The team you choose to handle your platform must have top-notch data engineering skills and extensive experience building highly reliable systems. Almost all internal data engineering projects suffer from chronic underinvestment and low reliability.
3. Be patient
If you build your own platform, be prepared to wait up to 18 months for the initial team and infrastructure to get in place. For many companies, it can take years for it to be reliable enough for daily use.
4. Make the connections
The team that implements the platform should connect it to each new tool your teams want to use. If not, teams should settle on a single shared business intelligence tool to keep things simple.
5. Trust the professionals
After the platform is up and running, bring all problems to data engineers. If marketers have a solution in mind, they communicate why they believe that solution will be effective while still deferring to the engineer.
How could a customer data platform benefit your business? Have you tried or seen one built internally? What challenges do you face today that a solid platform could solve?
