Customer data platforms (CDP) are growing in popularity however, brands are still struggling to create a unified view of customers according to a Forrester study, commissioned by Oracle.
The report, Getting Customer Data Management Right found brands want to unify customer data but face several challenges in bringing different data types together.
CDPs create a persistent, unified customer database that is accessible to other systems which make better personalised experiences for consumers.
According to a report from industry group the Customer Data Platform Institute, the CDP market grew 65 per cent in 2018 alone with an additional 29 new vendors, 2,600 employees, and $US173 million in funding.
While marketing and advertising professionals understand the critical role unified customer profiles play in personalising the customer experience, the majority of brands are not able to effectively use a wide variety of data types.
According to the report, 71 per cent of marketing and advertising professionals say a unified customer profile is important or critical to personalisation.
Only 11 per cent of brands can effectively use a wide variety of data types in a unified customer profile to personalise experiences, provide a consistent experience across channels, and generally improve customer lifetime value and other business outcomes.
From the study, 69 per cent expect to increase CDP investments at their organisation over the next two years.
Rob Tarkoff, executive vice president and general manager at Oracle CX said, “A solid data foundation is the most fundamental ingredient to success in today’s Experience Economy, where consumers expect relevant, timely and consistent experiences.”
As consumers expect more and more personalised experiences, the ability to effectively leverage customer data is shifting from a “nice-to-have” to table stakes.
The Forrester report noted 75 per cent of marketing and advertising professionals believe the ability to “improve the experience of our customers” is a critical or important objective when it comes to the use of customer engagement data.
Sixty-nine per cent believe it is important to create a unified customer profile across channels and devices and 64 per cent stated that they adopted a CDP to develop a single source of truth so they could understand customers better.
Brands that effectively leverage unified customer profiles are more likely to experience revenue growth, increased profitability and higher customer lifetime values, the report found.
According to the Oracle-commissioned report, brands that use CDPs effectively are 2.5 times more likely to increase customer lifetime value.
When asked about the benefits of unified data management, the top two benefits were increased specific functional effectiveness (eg advertising, marketing, or sales) and increased channel effectiveness (eg email, mobile, web, social media).