Customer Data Platforms and Data Connectors

Customer Data Platforms (CDPs) provide marketers with a gateway to internal and external data sources and complementary marketing technologies.

External data about individuals can radically boost your knowledge of that person, especially in the early stages when “first impressions” are so critical. External “third-party” data informs call centers, email systems and other communications platforms connected to your CDP with essential details about your prospects’ and customers’ behaviors, intentions and propensities pulled from observations outside your limited scope of interactions.

How Does External Data Improve Customer Interactions?

Two prominent use-cases that benefit from enhanced behavior and propensity data are Segmentation and Personalization. Placing an individual into the proper customer segment will ensure that you recognize their probable journey and can best predict the optimum set of products and services to offer. Personalization based on first-party observations PLUS accurate external data will allow you to engage customers with the most relevant and resonant ongoing messaging and interactions.

What Types of Consumer Data Are Available?

There is more data available about individuals and the households they live in than you can imagine. Literally thousands of data points on everything from brand preferences to purchasing behavior to household economic potential – and including traditional core Demographics that everyone needs to know – are available to enhance customer databases. Data Marketing Strategies can help you to sort through the many available options to determine the best data elements for your specific needs.

How Accurate Is the Consumer Data?

The accuracy of external data depends a great deal on the source. Our recommendation is to work with data sources that compile data from a combination of public and private data licenses. We prefer to work with companies with at least 50 or 100 ultimate sources because the data from one ultimate source corroborates data from other sources.

Accuracy also depends on the data element itself. Some data such as interests and buying behavior are based on actual responses from individuals or observed purchase behavior so these are quite accurate. Others are modeled based on a variety of factors. For example, Estimated Household Income and Net Worth are both modeled. Accuracy for these is typically 90% likely to be within the expected range (e.g., Income $50K to $60K) and 5% above, 5% below the expected range.

Use Only Ethically-sourced Data

We only work with data providers who take extraordinary lengths to ensure that data is ethically sourced and follows all U.S. regulations and Data and Marketing Association best practices and ethical guidelines.

Data licensed from many ultimate sources (e.g., credit card companies) is not allowed to be associated with a specific individual for privacy reasons. However, it is OK to use data from these sources to create models that score households related to their propensity to have a certain behavior. Click here to learn more about Propensity Models.

How Can We Connect Our CDP to External Data?

There are several ways to connect data in your CDP to external data…each has pros and cons.

The ultimate way is through a Data Pipe / API also known as a “connector”. The key benefit is that data can be appended in real-time so that as soon as a prospect self-identified, you are instantly able to learn many things about them and use that knowledge to optimize how you interact right then and there.

Another approach is through an automated batch system where you upload data in a pre-determined format to an FTP site for automatic processing. Typically, this processing would happen weekly or daily, or even several times per day.

Ad Hoc batch via FTP and self-service data appends through a simple user interface are the other approaches for appending data.

Next Steps

Whether you are a Customer Data Platform seeking a data connection or a CDP user, or any data-driven marketer who wants to maximize the benefit of their customer data, we suggest scheduling a free consultation session with one of our Data Experts here at Data Marketing Strategies. They will listen to your needs and provide advice on:

• The best data source and API / connector to use
• The best data elements to choose based on your products or services
• Ways to maximize data value (which leads to improved Life Time Value)

We look forward to hearing from you!