Entrepreneurship

How Customers May Benefit from a CDP over an ESP

Author Bio: Laura Dolan is the Senior Content Marketer at Zaius. She has been a content producer for over 15 years publishing pieces in B2B and B2C industries. She has also written and edited for international publications in the U.K., Canada, Australia, and India. When she’s not creating content for work, she loves to spend time with her husband, Jeff, four stepchildren, dog, Sparky and cat, Piper. Follow her on LinkedIn, Twitter @Laura_M_Dolan, and Instagram @lauramariejoan to keep in touch. 

If you’re an entrepreneur running an e-commerce business or you decided to pivot and take your brick-and-mortar location completely online, then you might be looking to invest in some kind of powerful data collecting, customer nurturing platform.

There are so many options to choose from out there, from Customer Data Platforms (CDPs) to Email Service Providers (ESPs). The trick is knowing which is the most conducive for your type of business.

What is an Activated CDP and how can it help my Business?

An Activated CDP helps ecommerce businesses consolidate and organize all their customer data and provides advanced analytics that assist in segmenting their audiences, the flexibility to integrate with various applications, creating unified customer profiles, observing the customer lifecycle, and enhancing data activations and marketing automation.

Image Source: Zaius

A CDP is considered a customer-centric, all-in-one solution that is customized toward consumers’ individual demands. A CDP also gives different brands access to all of their data from marketing, services and merchandising, enabling every member of a company’s team to make informed decisions on how to reach out to leads, nurture customer relationships and win back those who have churned. 

A CDP’s omnichannel marketing includes:

  • Advertising & Social
    • Efficient promotion and paid advertising
  • On-Site Personalization
    • Content that ensures the right products are being viewed at the right time
  • SMS
    • Delivering personalized texts directly to customers’ phones
  • Website & App
    • Interacting with shoppers with data provided by customer profiles 
  • Email
    • Inserting relevance into engagement campaigns via dynamic content, A/B testing, follow-up nurture, etc. 

Utilizing a customer-centric tool makes the shopping experience more personal for consumers, helping them associate your brand with the individual attention that will enhance their buyer’s journey rather than making them feel like they’re just another dollar sign added to your profits.

Image Source: Zaius

CDPs are designed to handle high volumes of customer data that is stored all in one place, saving time and creating easy access to metrics that will assist in launching campaigns that are accurate and relevant to each shopper. Once that data rolls in, marketing teams can activate campaigns based on algorithms that indicate the likelihood of completing a purchase, thus, support representatives can get a better idea of Customer Lifetime Value (CLTV) of each customer with which they interact.

Leveraging a customer-centric approach as opposed to a limiting channel-centric approach caters to just how subjective each shopping experience can be. For example, CDPs offer an advanced version of product recommendations, as they are designed to extract data from third-party apps and use those data points for personalization and product recommendations, e.g., follow-up campaigns based on Search Abandonment or Cart Abandonment. 

Consider the following real-life scenario:

A friend of mine, we’ll call her Sam, wanted to buy some dog toys from HealthyPets.com for her rescue dog, Kado. So, she went on their website, browsed their products and being happy with what she saw, she bought a few dog toys. 

Later that same day, her aunt inquired about switching her dog over to a new food. So, Sam ended up back on HealthyPets.com on the same computer and IP address, looking at food for her aunt’s dog, Ollie.

She made a purchase of dog food on her aunt’s behalf. With the website’s current marketing technology, they would automatically follow up with replenishment campaigns based on Sam’s last purchase of the dog food, but because Sam wasn’t buying the food or isn’t planning on switching food brands for her own dog, these interactions wouldn’t apply to her. However, she would be interested in campaigns related to her search for more dog toys down the line. 

An activated CDP would be able to differentiate between the types of purchases and give brands a complete story behind all of their customers’ purchasing history, allowing them to see their buying behavior across every channel and device. 

Customers recognize and appreciate when one of their favorite brands knows them well enough that they’re proactive in determining the timing of when a product needs to be replenished or when an accessory would complement a clothing item they just bought as a follow-up purchase. Customer nurturing helps you stand apart from your competitors, and it’s something your customers will always remember and expect going forward.

That’s what a CDP can do. It’s a game-changer for the B2C marketing industry. Creating customer personas is only half the battle, the rest is seeing patterns in their buying history and creating campaigns aligned with their buying needs.

Image Source: Zaius

Why ESPs’ Capabilities Pale in Comparison to CDPs 

Switching gears to a more channel-centric platform, Email Service Providers or ESPs, such as Mailchimp, for example, provide user-friendly email marketing services to engage audiences for those looking to grow their business. They include tools such as template builders, marketing automation, and real-time analytics. 

Graphical user interface, application, website

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However, due to the channel-centric nature of an ESP, the platform can be very limiting and one-dimensional, as they allow businesses to only perform one function in customer nurturing, in this case, email messaging. 

ESPs also provide A/B testing, survey tools, campaign management software and list broking. With an ESP, businesses are able to create email templates or populate pre-made templates within the platform, uploading and maintaining a list of subscribers that can be segmented into different categories depending on where they are in their buyer’s journey (new lead, potential client, long-time customer, etc.) and monitoring statistics such as open rate and click-through rates. 

One very useful feature of an ESP is A/B testing, which is one of the easiest ways to test different versions of copy or subject lines to determine if one version has more viewership over another. A/B testing allows you to assess and choose which mailing demonstrates the highest amount of engagement including opens rates, clicks throughs and conversions. It is also an efficient way to recognize weaknesses in your messaging practices and make adjustments and improvements along the way. A/B testing provides key performance indicators (KPIs) that will benefit your business’ email marketing in the long run.  

Image Source: Optimizely

ESPs are also conducive for customer nurturing, as it’s definitely the most common way to interact with customers by providing follow-up correspondence in the way of purchase confirmations or product recommendations, which is something Amazon does very well. 

The example below is a message I receive quite frequently from the company, as they provide more book titles based on my past purchases. (I had to split it into two images, as I couldn’t get it all in one screenshot).

This type of nurturing campaign does see a lot of success, as many people do follow through with purchases after a certain item is brought to their attention.

According to Barilliance, “[After] we conducted a study across 300 randomly selected customers. Here’s what we found. Product recommendations account for up to 31% of ecommerce site revenues.”

Barilliance also found that personalized product recommendations significantly increased the average order value (AOV).

“Sessions that do not have any engagement with recommendations have an AOV of $44.41. This number multiplies by 369% when prospects engage with a single recommendation. The effect continues to climb until tapering off around 5 clicks.”

Chart, line chart

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Image Source: Barilliance 

Product recommendations are definitely one of the more undeniable benefits of ESP marketing in how they can increase engagement and profits based on a past-purchase algorithm, but ESPs still don’t even come close to what CDPs can offer.

If you’re an ecommerce business looking to organize all of your data in a CDP, you may be asking yourself the following questions:

  • Are all of my marketing systems in one centralized place? 
  • Am I creating a consistent customer experience across all of my channels?
  • Is my brand reflected in an omnichannel platform? 
  • Who are my customers?
  • Do I know exactly how many customers I have?
  • Do I know what my customers have bought and when?
  • What does a typical customer journey look like on my website?
  • What constitutes a positive customer journey or a negative customer journey among my clientele? 
  • Which customers are most responsive to discounts?
  • Which customers don’t need incentives to consistently buy from my online store?
  • Which specific marketing campaigns have been the most effective or ineffective?
  • What trends should I be on the lookout for that indicate my customers are ready to buy again?

If this sounds like you, you’re ready to invest in a CDP. Activated CDPs are appropriate for established brands with a fully staffed marketing team that are looking to take their companies to the next level of growth.  

In Conclusion 

When it comes to comparing the features of a CDP to an ESP, as they’re both truly robust marketing tools, CDPs take the cake in creating a personalized shopping experience for your customers. 

A CDP does the work of an ESP and then some. You’re not only able to engage with your customers through email campaigns, but also via SMS, websites, apps, and social media, providing a single view of every customer’s engagement across your omnichannel stack. An activated CDP is the tool that will give you the feedback you need to create brand ambassadors out of your most loyal consumers to perpetuate your business for life.  

Pawel Lawrowski Pawel is a Head of Growth at Wisepops and a Lead Generation&Pop-up Expert.

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