Customer Data Foundations: Evolution, Challenges, and Solutions

A deep dive into customer data foundations.

Vishal Amin, 

19 March 2024

At Plinc, we stress the importance of solid customer data foundations for effective marketing and insight. But what do we mean by “solid customer data foundations”, and what are the challenges that stem from bad data foundations?


What is a Customer Data Foundation?

You must have heard the saying, “Data is the new oil.” In today’s new data economy, customer data has become the lifeblood of every modern business, having the power to fuel operations and growth. Customers provide businesses with a wealth of data — from browsing behaviour and transaction history to channel engagement — but with so much information at our fingertips, how do we make sense of it all?  

The roots for this new way forward start from building a strong core data foundation. Essentially, a platform that collects, stores, and analyses customer data from various touchpoints to create a unified view of the customer. It’s about consolidating disparate data sources into a centralised system to drive insights and actions that benefit both the customer and the business. 

This blog delves into customer data foundations, exploring their evolution, limitations, and the path to integrated, future-proofed solutions for businesses. 

The Evolution of Customer Data Management

Over the years, database management systems have become more intelligent, allowing critical business units to organise customer data and associate related data into one location. By aligning systems, businesses have progressively harnessed the flow of information, establishing a connection between data for improved performance and accessibility for decision-makers. The rise of data led to marketers relying on numerous software-as-a-service (SaaS) apps, which, in turn, increased the need for customer data management (CDM). 

Coming to the present, CDM is the process by which businesses collect and analyse customer information and obtain feedback. CDM includes various software or cloud computing apps that help provide data-driven businesses with quick and easy access to customer data. A solid CDM strategy must be built from the ground up. It requires establishing a strong data foundation and connected data sources to turn customer data into detailed and insightful customer profiles that a company’s sales and marketing teams can use to improve customer interactions, increase customer engagement, and retain customers. 

Key Components of Customer Data Foundations

CDM includes various components to manage and leverage customer data effectively. Among these components are Customer Data Warehouses (CDWs), Single Customer Views (SCVs), and Customer Data Platforms (CDPs). Each plays a crucial role in storing, organising, analysing, and activating vast customer data to enhance marketing strategies and drive business growth.  

Customer Data Warehouse (CDW) 

A CDW provides a centralised repository for storing, organising, and analysing vast quantities of data. CDWs offer long-term data storage and support analytical processing.  

Single Customer View (SCV)

An SCV aggregates datapoints across channels to create accurate customer profiles, unifying data from across channels such as purchase history, digital behavioural data and more. SCVs enable a number of marketing strategies including segmentation and targeting.  

Customer Data Platform (CDP) 

A CDP is a real-time infrastructure that collects a business’s customer data from online and offline sources, verifies it according to a predefined data strategy, and builds a comprehensive 360-degree customer profile. This holistic view allows businesses to see ‘the big picture’ and take a unified approach to their marketing strategy. 

Why Traditional Customer Data Solutions Are No Longer Sufficient

Given the substantial returns associated with data investments, executives are dedicating considerable resources to identify the optimal solution. With multiple types of CDPs available and each claiming to tick all the boxes, finding the perfect solution can be tricky. A study by Forrester revealed that whilst 66% of respondents believe CDP adoption is a strategic priority for their business, only 10% of CDP users feel their existing solution meets today’s needs.  

So, where does this hurdle stem from? 

Evolving Business Needs and Data Capabilities

Businesses are constantly evolving, and so are their data requirements. With vast amounts of customer data coming daily into the CDP, traditional CDPs in the market fail to operate from a holistic, 360-degree view of the customer, leading to inefficiency and high costs.  

According to our latest research, “proving the value of customer marketing to protect and increase my budget” is the number 1 cause of stress for senior customer marketers. In fact, 68% of respondents agreed that the level of resourcing and funding for their department is holding their team back from driving business growth.  

To prove their value, marketing teams need precise measurement frameworks and advanced reporting tools to demonstrate the direct impact of marketing activities on the business. With just 26% of respondents reporting incremental revenue from the campaign, 25% reporting incremental profit, and 23.5% reporting overall incremental revenue generated by a channel or program, this shortfall presents a considerable challenge in advocating for budget allocation. This affects the effectiveness of accurately showcasing the impact of marketing efforts. 

IT Resource and Expertise Constraints

Imagine how you’d feel if you lacked adequate training for your role. Not a great start, right? Today’s large-scale data projects require specialised skills and resources. Traditional CDPs are often complex to set up and manage, requiring significant IT resource and expertise. Not to mention, many CDPs require analyst resource to interpret the data and create actionable insights from it. With customer data distributed across separate, disconnected systems typically managed by different stakeholders, critically analysing various data points can be puzzling. But what if every individual within an organisation could access data right from their fingertips (and understand it!)? A modern CDP should provide a user-friendly interface so non-techies can utilise the data to make informed, data-driven decisions that put the customer at the centre of their marketing strategy. Removing this “technical” barrier eliminates unnecessary data silos and democratises data and insights – enabling each stakeholder to make better decisions for the business.  

Integration and Activation Challenges 

The complexity of the customer journey is growing with an ever-increasing number of new channels and devices through which customers can interact with businesses. The exponential rise in consumer touchpoints makes it increasingly challenging for companies to unify, analyse, and activate customer data. Having a solution that enables customer data to be captured from online and offline sources in real time to create a complete, unified view of the customer is imperative to create seamless customer experiences. Unfortunately, many brands fail to tick off an essential requirement in their customer data management checklist – establishing a “unified customer profile”. The failure to select a CDP with advanced data unification and matching capabilities can result in ineffective data integration across channels, making effective trigger-based automation, predictive targeting, and the ability to execute real-time, personalised cross-channel campaigns impossible.  

Cost, Complexity, and Stakeholder Support 

As previously stated, more than two-thirds of respondents in our latest report agreed that the level of resourcing and funding for their department is holding their team back from driving business growth. Along with the fact that the ability to prove the value of customer marketing to protect and increase budget remains the most prominent concern for senior customer marketing professionals, marketers need to rediscover innovative ways to make the most out of their existing budgets. Large-scale data transformation projects are at odds with this, and many marketers are left investing in smaller-scale point solutions to fix the “symptoms” of their ineffective marketing rather than resolving the underlying data problems. However, without a solid data foundation, marketers will fail to deliver the expected ROI. As such, now is the perfect time to start fresh – to build your core data foundations for good and get the most value out of your customer data. 

Overcoming the Challenges

Are you ready to finally fix long-standing foundational data issues holding you back? And get your CMO smiling at your Monday morning trade meetings? Unlocking this new way forward is easier than you may think. The first step is fixing your customer data foundation.  

Achieving a Comprehensive Data View 

Before trying to find a solution, step back and evaluate how your business’s data can enhance your customer marketing activities. Business leaders should take a deliberate and objective look at the business through the lens of data and anticipate what needs to happen to achieve the company’s goals.  

The right data platform will provide you with a fully connected and continuous single source of truth. Only then will you be able to get the most out of your chosen CDP. 

Simplifying the CDP Landscape 

Implementing the right CDP within your business can provide benefits and possibilities such as improved data quality, better customer experience and market agility. However, with so many CDP providers in the market, it’s only right to ask, “Which CDP is right for me?” Vendors promise a range of capabilities and solutions, so it is essential to understand your company goals clearly and ensure your chosen CDP will match them. One size no longer fits all. The right CDP must allow access across teams to complete customer data sets and run deep-dive analyses for non-technical marketers and analysts alike. Ultimately, the goal is to take a unified, customer-centric approach with all departments aligned on the core data strategy. 

The Path to Integrated Customer Data Solutions 

Successful businesses in this data-driven economy are the ones that do more with their first-party data. As mentioned previously, there are many CDP solutions in the market; however, many fail to easily unify messy data into an SCV, making it difficult for businesses to unlock value from their customer data strategy. As a result, 36% of businesses are still 4-5 years away from adopting a customer-first approach, where every decision revolves around the customer. 

Although many factors contribute to this delay, there’s almost always a common culprit to blame: inaccessible or inoperable core customer data assets. So, what are the next steps to achieve a fully connected, comprehensive view of your customer data? To achieve a next-gen, customer-first strategy, you must be able to unify, analyse and activate your customer data. This starts by collecting and integrating customer data from all sources — no matter how disparate and no matter what format. In addition, marketers and analysts must have open access to the latest data and tools to generate and democratise actionable insights across the business.  

Are you ready to fix your shaky foundations fast? We have the right solution for you. Schedule a consultation to discover how Plinc’s AI-enhanced, real-time data platform, Unilyze can help you leverage your data to transform your customer experience.  

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