2021 is The Year of The CDP

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Year of CDP


A customer data platform (CDP) is critical for creating personalised digital customer experiences. Here's why 2021 is the year of the CDP.

Last year redefined the marketing landscape for many companies. As the pandemic decreased in-person experiences, both consumers and brands relied on virtual tools for everything. Very quickly, it became clear which brands had either already invested in digital marketing tools or which were nimble enough to ramp up digital capabilities.

2021 is looking to be another digital-first year for brands and marketers. In fact, Deloitte’s 2021 Retail Industry Outlook found that 88 percent of surveyed executives named “digital acceleration” as a priority area of investment. The report also found that “only three in 10 executives rated themselves as having mature capabilities within digital and, as such, are planning ‘major’ e-commerce, contactless capabilities and store technology upgrade investments.

It’s clear that brands in retail and beyond will need to expand their digital capabilities to succeed in a digital-first world. Brands need to create virtual experiences that are tailored to each customer. Creating these personalised experiences will require an understanding of behaviour, customer data, and the ability to activate that data. One of the most meaningful tools available today for personalised virtual experiences is a customer data platform (CDP) — and I believe 2021 will be the year of the CDP. Here’s why.

Long Term Customers are the Long Term Goal

Repeat business is good business. In 2020, many companies learned the value of strong, personal relationships with customers — those loyal customers are, ultimately, those who support businesses of all sizes through good times and tough times alike. 

We all like to feel that we’re seen as individuals, and that’s something customers are increasingly seeking from brands. When the right content reaches the right customer at the right time, magic happens — and so do conversions. Plus, customers want to feel like more than just a sale. Small gestures can be meaningful. For example, many brands will send customers well wishes on their birthday, along with a special offer or gift. 

CDPs are an excellent tool in building ongoing relationships with customers, namely because they allow brands to communicate with customers in a more personalised way. Which brings us to the second reason why the popularity of CDPs will grow in 2021. 

Brands Want to Get Personal

As brands look to strengthen their customer relationships, personalisation—already a buzzword in martech — will become an even more important strategy. As noted, CDPs are a crucial tool for personalisation. A best-of-breed CDP allows organisations to pull together data from many different channels, segment customers with great precision, and deliver personalised content that anticipates their needs.

Discounts are an example of where personalisation can generate results. As mentioned above, discounts are a popular way for brands to connect with customers. However, constant discounts can begin to feel impersonal and they can also desensitise shoppers to coupons. The traditional methodology for discounts is a broad email blast, sending the same discounts to everyone. However, with a CDP, brands can segment customers into different likelihoods to buy (LTB) and serve discounts accordingly to each group. By offering a discount that each group will find valuable, brands can reduce the desensitisation of buyers and improve margins.

Data Silos are Breaking Down

Of course, for personalisation to work, brands need access to diverse data sources. Historically, information about customers is all too often piecemeal. It’s siloed in various channels and doesn’t present a meaningful picture of the customer. 

With a good CDP tool, brands can combine information from across channels, such as social media, emails, web, and more. By blending together this information, they can create more personalised offers based not just on purchase history, but interests. This means that customers get content that matters to them. Perhaps that’s a discount, or perhaps it’s an innovative piece of content marketing — such as interviews with influencers, tips on how to use or style a product, etc. Regardless of what the brand is delivering, a CDP helps to ensure that it has value to its intended audience.

AI is Getting Smarter and Smarter

One of the most exciting things about CDPs is the artificial intelligence (AI) layer that uses the power of advanced analytics to find patterns in the data and predict what will happen next. AI is very good when it comes to making sense of specific datasets — it excels at analysing information and creating complex segments in the customer database not possible before. 

While, of course, customer identities and privacy must always be protected, AI can segment customers into more specific categories: such as outdoor enthusiasts who have a special interest in winter sports, like skiing. With machine learning (ML) algorithms, a CDP can identify these customers, help brands send them relevant content, and increase click through rates for email marketing, conversion rates and many other core metrics.

These sorts of results indicate a clear win-win for both the customer and the company — the brand won a sale, and the customer received something they found valuable and actually needed.

CDPs in 2021 and Beyond

The last year re-defined so much in the retail landscape. With traditional models turned on their head and popular new brick-and-mortar strategies, such as pop-up stores, limited by safety restrictions, it’s clear that brands need to prioritise digital strategies. 

Many of the digital habits we’re forming in these strange times will stick around, and it doesn’t take a pandemic to know that strong customer relationships are important. CDPs will offer brands a chance to get to know their new and changing customer segments, regardless of the situation — which will mean a lasting competitive edge in 2021 and beyond.

Looking to learn more about CDPs? Join Acquia in their latest web sesh on Putting CDP Theory into Practice.