<p>A customer data platform, or CDP, is an increasingly important tool for businesses looking to deliver personalized customer experiences at scale. A CDP provides a single, unified view of each individual that powers targeted campaigns and interactions across channels by consolidating customer profiles and data from various sources.</p>
<p>If you've been considering implementing a CDP but aren't sure where to begin, this post will give you a high-level overview of the key steps to get started. By the end, you'll have a solid understanding of what's involved in a solid groundwork for a CDP to improve your marketing efforts and customer relationships. Let's dive into the foundational knowledge you need to make the most of this powerful technology.</p>
<h2>The Rise of Customer Data Platforms (CDPs)</h2>
<p>In the digital age, data has become the lifeblood of businesses, driving critical decisions and shaping customer experiences. As data sources multiply across CRMs, marketing automation platforms, analytics tools, and more, piecing together fragmented information on customers and prospects becomes an increasingly complex challenge. This data disunity leads to inaccurate reporting, poor personalization, and ineffective experiences that hamper growth.</p>
<p>To harness the promise of customer data, businesses need solutions that consolidate disparate sources into unified profiles and insights. Enter the <a href="https://www.lifesight.io/cdp">customer data platform (CDP)</a>. CDPs ingest data from all channels and systems, resolve identities, and centralize information to form complete pictures of each customer.</p>
<p>With holistic records constructed in real-time, CDPs empower personalized messaging and experiences. They equip marketers to micro-target campaigns, tailor product recommendations, and optimize spend. Unified data unlocks unified customer understanding.</p>
<p>As privacy regulations evolve and third-party cookies decline, CDPs provide the customer intelligence needed to navigate the future. They future-proof data-driven marketing strategies and personalization. Implementing a robust <a href="https://www.lifesight.io/cdp">customer data platform</a> is a strategic imperative for brands seeking to optimize engagement, retention, and growth.</p>
<h2>What is a Customer Data Platform (CDP)?</h2>

 ![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image3_43387e525c.webp) 

<p>At its core, a <a href="https://www.lifesight.io/cdp">customer data platform</a> (CDP) is a centralized system that collects, organizes, and activates customer data from various touchpoints, creating a unified customer view. CDPs consolidate first, second, and third-party data to build detailed customer profiles that feed personalization, <a href="https://www.lifesight.io/identity-graph">retention</a>, and acquisition initiatives.</p>
<h3>There are two primary CDP architecture types:</h3>
<p><strong>Packaged CDP:</strong> An all-in-one CDP that includes data collection, identity resolution, profile management, and activation. Packaged CDPs are pre-built turnkey solutions requiring less IT effort to implement. They provide an end-to-end data management workflow.</p>
<p><strong>Composable CDP:</strong> A modular approach that combines best-of-breed components for data ingestion, identity linking, profile building, and more. Composable CDPs provide flexibility to pick customized elements. However, they require more integration work.</p>
<p>In both forms, CDPs create a persistent, continuously updated customer database. They seamlessly link behavioral, transactional, and observational data at an individual level in real-time. Powerful identity resolution connects data from anonymous sources to known individuals.</p>
<p>This holistic data foundation powers personalized messaging and experiences. CDPs activate unified profiles across channels through audience segmentation, campaign management, and integration with operational systems.</p>
<p>As privacy laws tighten and third-party cookies decline, CDPs will only grow in importance. Their ability to ethically centralize consented first-party data provides the customer intelligence needed for the future.</p>
<h2>How does a CDP differ from other Data Systems?</h2>
<p>

 ![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image2_faad393c72.webp) 

</p>
<p>While there are multiple tools that manage customer data, CDPs stand out because of their real-time data unification and activation capabilities.</p>
<p><strong>Compared to CRMs:</strong> CRMs like Salesforce focus on sales and service data. CDPs consolidate broader sets of behavioral, transactional, and engagement data across marketing, sales, service, and more. CRM data remains siloed while CDPs unify data enterprise-wide.</p>
<p><strong>Compared to DMPs:</strong> DMPs (Data Management Platforms) manage anonymous audience data for targeting. CDPs create persistent, individual customer profiles. DMPs lack identity resolution to tie data to real people. CDPs enable known, personal engagement.</p>
<p><strong>Compared to Tag Managers:</strong> Tag managers like Google Tag Manager deploy tracking scripts. But they don't actually unify data at the customer level. CDPs build detailed individual records for messaging and personalization.</p>
<p><strong>Compared to BI Tools:</strong> BI Tools report on structured data sets. CDPs integrate structured, unstructured, and time-series data. BI tools lack identity management and profile building in real-time. CDPs activate data.</p>
<p><strong>Compared to Analytics Platforms:</strong> Analytics platforms enable collection, measurement, and reporting. But they don't directly power customer engagement or personalization. CDPs activate insights.</p>
<p>The centralized, real-time customer records within CDPs uniquely empower personalized omnichannel experiences. No other marketing data system provides the same holistic capabilities in one solution.</p>
<h2>Key features of an effective CDP</h2>

 ![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image5_8d65f19066.webp) 
<p>An effective customer data platform is defined by capabilities that enable real-time, unified profiles and cross-channel activation. Here are 7 key features to look for:</p>
<h3>1. Real-time Data Integration</h3>
<p>Robust CDPs ingest data continuously through APIs, ETL, and reverse ETL to update customer records in real-time. This enables sending timely, contextual messages that match present customer needs, not just past behaviors. Without real-time ingestion, profiles grow stale.</p>
<h3>2. Unified Customer Profiles</h3>
<p>CDPs seamlessly connect identities across channels to <a href="https://www.lifesight.io/identity-graph">construct complete profiles</a>. Collating data from CRM, web, mobile, in-store, and more provides a holistic view of each customer. This powers hyper-personalized messaging and experiences.</p>
<h3>3. AI-Powered Analytics</h3>
<p>Sophisticated CDPs apply machine learning algorithms to profile data to uncover predictive insights. Patterns like churn risk, lifetime value, and purchase propensity can be detected. This prescribes targeted engagement strategies for each individual. AI augments human analysis.</p>
<h3>4. Cross-Channel Orchestration</h3>
<p>CDPs coordinate unified profiles, <a href="https://www.lifesight.io/segments">segments</a>, and messaging across channels for integrated journeys. They sequence tailored experiences across email, web, mobile apps, call centers, retail stores, and any customer touchpoints. Siloed channels become orchestrated.</p>
<h3>5. Data Privacy and Compliance Tools</h3>
<p>Maintaining customer trust is imperative. Robust CDPs ensure regulated data usage, consent management, and access controls. Data ethics matter more than ever. Leading CDPs enable <a href="https://www.lifesight.io/server-side-tracking">compliance and responsible data handling</a>.</p>
<h3>6. Flexible Data Architecture</h3>
<p>With configurable infrastructure, CDPs can accommodate varied data structures and use cases. Extensible APIs and turnkey connectors integrate easily with unique tech stacks. Pre-built connectors avoid custom coding.</p>
<h3>7. Seamless Integration Capabilities</h3>
<p>CDP insights must be actionable across technology ecosystems. Turnkey integrations reduce friction in embedding data, segments, and insights into operational systems. Smooth integrations allow for leveraging CDP intelligence enterprise-wide.</p>
<p>Beyond marketing, CDPs serve use cases like fraud prevention, customer self-service, sales intelligence, and more. Unified profiles enhance processes company-wide.</p>
<p>The most effective CDPs check all boxes as customer intelligence hub - from adaptable data infrastructure to actionable insights. They drive personalized experiences and strategic growth.</p>
<h2>Benefits of using a Customer Data Platform</h2>

 ![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image4_f85ef0d489.webp) 
<p>Implementing a robust customer data platform unlocks a multitude of benefits across marketing, sales, operations, and the entire customer lifecycle:</p>
<h3>For Marketing:</h3>
<ul>
<li>Deeper customer insights inform strategies and personalization</li>
<li>More relevant and timely engagement opportunities</li>
<li>Improved campaign performance through optimization</li>
<li>Accurate measurement of marketing ROI</li>
<li>Future-proofed targeting is not reliant on third-party data</li>
</ul>
<h3>For Sales:&nbsp;</h3>
<ul>
<li>Enriched lead and contact profiles prompt smarter outreach</li>
<li>Understanding of prospect behaviors and preferences</li>
<li>Visibility into marketing-sourced leads for increased conversion</li>
<li>Prioritized opportunities based on customer lifetime value</li>
</ul>
<h3>For Customer Service:</h3>
<ul>
<li>Complete customer history for personalized service</li>
<li>Predictive insights to get ahead of customer issues</li>
<li>Automated self-service recommendations based on profiles</li>
<li>Lower contact rates and improved satisfaction</li>
</ul>
<h3>For Operations:</h3>
<ul>
<li>Centralized consent and preferences simplify privacy compliance</li>
<li>Detected fraud early based on customer patterns</li>
<li>Reduced IT burden through integrated data infrastructure</li>
<li>Enterprise-wide data accessibility under proper controls</li>
</ul>
<h3>For the Customer Experience:</h3>
<ul>
<li>Consistent messaging across all channels and touchpoints</li>
<li>Relevant recommendations matching interests and habits</li>
<li>Seamless experiences based on holistic firm understanding</li>
<li>Proactive service by anticipating customer needs</li>
</ul>
<p>The benefits of unified customer intelligence span the entire organization. CDPs drive growth and efficiency through data-driven engagement, measured marketing, and customer insights. The platform pays dividends across departments.</p>
<h2>Overcoming modern marketing challenges with CDPs</h2>

 ![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image1_24f9d04ca3.webp) 
<p>Modern marketers grapple with fragmented data, proliferating channels, privacy regulations, and more. Customer data platforms empower brands to turn these obstacles into opportunities.</p>
<h3>1. Fragmented Data Sources</h3>
<p>Marketing teams struggle to gain insights when customer data is fragmented across CRM, web analytics, email, and other platforms. Without a unified view, engagement efforts are not coordinated and experiences remain inconsistent. <a href="https://www.lifesight.io/cdp">CDPs</a> consolidate data enterprise-wide into complete, unified profiles with persistent record-keeping. This singular view of each customer finally overcomes stubborn data silos. For example, online and offline purchase data can be merged to understand omnichannel spending habits.</p>
<h3>2. Rapidly Evolving Customer Behaviors</h3>
<p>Considering how rapidly <a href="https://www.lifesight.io/segments">customer preferences and behaviors shift</a>, legacy marketing systems with batch data updates simply cannot adapt in real-time. As a result, messaging fails to match the present interests of customers. Real-time CDPs continuously update profiles by ingesting data streams as behaviors change. This empowers sending timely, contextually relevant messages tailored to current needs, not just past behaviors. For instance, shifting product preferences can be detected and recommendations adapted quickly.</p>
<h3>3. Regulatory Compliance and Data Privacy</h3>
<p>Customers rightfully demand that their data be handled securely, transparently, and according to their preferences. Meanwhile, regulations like GDPR and CCPA impose requirements around ethical data handling. This makes compliance extremely complex. CDPs help by centralizing consent, rigorously tracking data lineage, and enabling data rights requests. Customer trust is strengthened on both fronts.</p>
<h3>4. Multi-Channel Marketing Consistency</h3>
<p>Delivering seamless omnichannel experiences is incredibly difficult with channel-specific data trapped in silos. CDPs overcome this by using unified profiles to coordinate consistent messaging and experiences across all touchpoints. They finally enable orchestrating tailored customer journeys spanning the digital and physical worlds. Abandoned online carts can trigger in-store offers, for example.</p>
<h3>5. Personalization at Scale</h3>
<p>Today's consumers expect personalized content and recommendations tailored to their unique needs and interests. However, legacy rule-based segmentation cannot scale efficiently. CDPs apply unified profiles and machine learning to automatically segment millions of individuals for tailored omnichannel experiences.</p>
<h3>6. Measurement and Attribution</h3>
<p>Understanding marketing impact across multi-touch buyer journeys with many online and offline touchpoints is incredibly difficult. CDPs analyze full cross-channel data trails to finally uncover true conversion drivers across channels. This visibility optimizes marketing spend allocation towards high-ROI high-impact activities.</p>
<h3>7. Adapting to Technological Changes</h3>
<p>As new martech and data technologies emerge constantly, marketing stacks must rapidly evolve. But inflexible legacy systems buckle under the pressure to integrate new tools and data sources. With modular open architecture, CDPs smoothly onboard emerging technologies and data, future-proofing the marketing technology stack. For example, emerging data sources like IOT devices can be onboarded.</p>
<p>While marketers grapple with these modern realities, CDPs empower brands to transform challenges into advantages. Unified data provides the customer intelligence to deliver personalized experiences at scale, orchestrate cohesive journeys, strengthen trust, optimize spend, and adapt to a changing landscape.&nbsp;</p>
<h2>The next steps in your CDP journey</h2>
<p>Understanding the capabilities and benefits of customer data platforms is an important first step. But grasping the basics is just the beginning. As privacy regulations advance and data proliferate across channels, investing time in finding the right CDP becomes mission-critical for data-driven marketing success.</p>
<p>Selecting a future-ready CDP that evolves with your needs is paramount. Seek an open, flexible solution that centralizes consent, orchestrates insights across channels, and applies AI for actionability.</p>
<p>The transformation powered by unified customer data is profound. Marketers must explore their options to connect fragmented information and unlock new potential. Now is the time to spearhead the shift from channel-centric to customer-centric engagement.</p>
<p>Interested in exploring how a cutting-edge CDP can transform your business? Dive deeper with <a href="https://www.lifesight.io/connect">Lifesight's Connect</a> and discover firsthand the power of unifying data across your technology stack. Let real-time profile orchestration provide the foundation to engage, convert, and retain customers in new ways. The future of marketing begins with unified data, so <a href="https://www.lifesight.io/demo">Connect now</a>.</p>

Everything You Need To Know To Get Started With A CDP..jpg

Discover the power of Customer Data Platforms (CDPs) and supercharge your marketing efforts. Learn everything you need to know to get started with CDPs in this comprehensive guide.

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Experience

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announcements

<p>Marketing is a world of constant change &amp; thrives on flux, often allowing fractured information to hinder your capacity to drive campaigns at your utmost. With each decision you make, a whisper of self-doubt accompanies, prompting a question: Is this the correct choice?</p>
<p>Welcome to the privacy-first era. An era that necessitates a paradigm shift in how we approach marketing. Today, first-party data has become the lifeline for all customer acquisition and retention strategies. It brings forth an inevitable evolution of the marketing industry, predominantly addressing the lack of privacy (and its repercussions thereof).</p>
<p>We have witnessed this change first hand: across the challenges faced by customers and the diminishing performance of marketing initiatives. Policy usually catches up with technology until now when the customer has clamored for a privacy conscious market. With the tables turned, there is a ripe opportunity to regroup &amp; re-align our strategies for future marketing excellence. With privacy regulations tightening and third-party cookies being phased out, the marketing methods we have become accustomed to over the past decade or so, are rapidly becoming obsolete.</p>
<p>If you have managed or run any marketing activity in the past, some of these thoughts may resonate with you:</p>
<ul>
<li>My data is sitting in silos across multiple apps. I don't own any of it.</li>
<li>I can't take advanced actions using a unified data set.</li>
<li>It's incredibly difficult to orchestrate automated omni-channel campaigns.</li>
<li>My CAC is very high. I am losing money on first purchases.</li>
<li>Am I maximizing the returns on my ad spend?</li>
<li>Are device/browser limitations affecting my match rates?</li>
<li>How can I scale without unnecessary burning through my budget?</li>
</ul>
<p>Sound familiar?</p>
<p>A lot of us need help unifying siloed data, orchestrating automated omni-channel campaigns, optimizing customer acquisition costs, maximizing the returns on our ad spend, and scaling up without straining our budgets.</p>
<p>Our experience, gathered while building Lifesight, one of the leading marketing measurements platform in the world, and working with hundreds of global brands like GroupM, McDonalds, Coca-Cola, Accenture, and many others, has allowed us to study and solve this systemic gap. This experience also positions Lifesight as your best-suited guide through the shifting tides, helping you navigate challenges and unlock opportunities, while maintaining the values of privacy-first marketing. We see a massive opportunity to harness the power of first-party data, reach more customers, build deeply meaningful customer relationships, future-proof measurements and drive growth while respecting customer privacy.</p>
<p>We have carefully re-engineered every aspect of the Lifesight platform in response to these evolving needs. It's designed to address all the challenges you have faced and to unlock new opportunities.</p>
<p>Our platform is now made up of three core pillars - Connect, Engage, and Measure. These pillars of the product are designed to enable a multitude of growth use cases without the need for technical resources.</p>
<h2><strong>Connect</strong></h2>
<p>Connect is more than just a data integration tool, it's a Marketers CDP; it is a purpose-built customer data platform that is the gateway to owning your data, overcoming privacy limitations, and understanding your customers at the most granular level. With the ability to unify data in real-time from touchpoints across the journey, it enables you to improve match rates, recover lost revenue and optimize your spend. Powered by a first-party identity graph, it turns this data into insights that can inform every business decision, ensuring you maximize your data's utility while maintaining the highest privacy standards.</p>
<p><img src="https://mighty-basketball-fd4aeed960.media.strapiapp.com/Connect_04ff8af37e.png" alt="Connect.png" /></p>
<h2><strong>Engage</strong></h2>
<p>Engage allows you to operationalize these insights, by orchestrating personalized campaigns across multiple owned and paid channels. In the privacy-first era, having a solid customer retention strategy and execution built on automation is key. With Engage, you can deliver tailored 1:1 messaging that drives retention and superior customer experiences for any digital-first business. Coupled with our real-time customer data platform, Engage brings advanced segmentation, CRO, AI-powered messaging, powerful automations and much more, to ensure you reach and engage your customers wherever they are at the right time.</p>
<p><img src="https://mighty-basketball-fd4aeed960.media.strapiapp.com/Engage_847a782f38.png" alt="Engage.png" /></p>
<h2><strong>Measure</strong></h2>
<p>Measure ensures that you have the superpower of being able to make every investment decision with confidence. Powered by the latest machine learning algorithms, Measure is a first-of-its-kind measurements suite that offers multi-touch attribution, marketing mix modeling, and incrementality testing in a single app, for you to optimize media spend and scale your acquisition. It helps accurately gauge the incremental impact of your marketing efforts, allocate your budgets with precision, scale your campaigns without overspending, and validate your ROI. All of this, without the need for data scientists, engineers, or analysts. Change your perspective of marketing spend with automated and continuous marketing measurements.</p>
<p><img src="https://mighty-basketball-fd4aeed960.media.strapiapp.com/Measure_9693ddfb68.png" alt="Measure.png" /></p>
<p>We believe that the values of transparency, honesty, and respect for privacy will differentiate the leaders in the modern marketing landscape. Our promise to you is that we will always uphold these values and work tirelessly to keep up with the changes, so you don't have to. Our pricing will be transparent and fair so you can focus on driving sustainable growth for your business</p>
<p>Finally, to support this new vision, we have committed more resources and investment to building the best possible customer support and solutions team, ensuring we can help you navigate this era, promptly and seamlessly.</p>
<p><img src="https://mighty-basketball-fd4aeed960.media.strapiapp.com/Lifesight_Team_c393f041fa.jpg" alt="Lifesight Team.jpg" /></p>
<p>We invite you to navigate this privacy-first era with us. Together, let's leverage first-party data to build meaningful connections with customers, drive growth, and usher in a new age of privacy-conscious, data-driven marketing. We look forward to having you join us on this exciting journey.</p>
<p>Thank you,<br/>
Tobin Thomas<br/>
Co-founder &amp; Chief Executive Officer</p>

Navigating the Modern Markets Landscape - Cover.png

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Trends & Insights

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Retention

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<p>Walking by the brick-and-mortar stores has become common to us, while we see a few customers stepping in to make one or the other purchases, it isn&rsquo;t a denial that online ecommerce stores gain traction as well.</p>
<p>To bring it to your notice, the ease and convenience that an online shopping platform gives can&rsquo;t be felt in the physical stores. It would put you into thinking if you know that <a href="https://www.junglescout.com/blog/reasons-consumers-shop-online/">50.8%</a> of consumers say free shipping is one of the top motivating factors as to why customers choose online over offline as it would save them from having to spend a little extra money in traveling to shop from a physical store.</p>
<p>But adding the clause that they also receive quick delivery, let&rsquo;s say in a day as agreed by 27.7% of users. As it also gives an easy return policy that can&rsquo;t be expected in a physical store once purchased. The 38.7% shoppers say the offers and discounts received on the products are like nowhere else.</p>
<p>If you&rsquo;re thinking about or on the path to building an ecommerce business, we cover the 6 different types of ecommerce business models and how to choose the best one for your brand.</p>
<h2>What is an ecommerce business model?</h2>
<p>Ecommerce represents an online business model that allows businesses to sell products and consumers to buy products in a virtual mode without physical intervention while experiencing the look and feel of the product with a scroll of your phone. Technically giving consumers the leverage to shop at their convenience.</p>
<h2>Different types of ecommerce business models</h2>
<h3>B2B</h3>
<p>B2B stands for Business to Business ecommerce. A B2B business model harnesses modern digital commerce processes and facilitates transactions between two businesses.<br /></p>
<br>

![ecommerce business models-B2B-Alibaba](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image4_ffd0246d72.webp)

<p><a href="https://m.alibaba.com/">Alibaba</a>, is the largest B2B ecommerce company to look at, with nearly 20 million sellers and buyers from 240 countries.</p>
<p>Whether you are a manufacturer or a wholesale supplier, B2B business models can be the right fit to market to the buyers or vendors.</p>
<h3>B2C</h3>
<p>The B2C ecommerce business model is about selling it directly to the consumers and doesn&rsquo;t have intermediaries. It makes space for businesses ranging from small operations to giant conglomerates to sell directly to customers.</p>
<br>

![ecommerce business models-B2C-Amazon](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image2_32991808af.webp)

<p>One such example would be <a href="https://www.amazon.com/?ref_=navm_em_header_home">Amazon's</a> ecommerce business model. It is a marketplace with a vast product range catering directly to consumers. They ensure to provide a seamless <a href="https://www.getmoda.io/blog/customer-experience-automation">experience to the customer throughout their journey. </a>&nbsp;</p>
<p>Business-to-consumer ecommerce model is beneficial to businesses that sell to the customers directly aiding in shortening the sales cycle.&nbsp;</p>
<p>Also adding to the purchase that is driven emotionally. Sectors that seek to build a direct relationship with the customers and want to impact the purchases with an emotional marketing message see this business model as a fit.&nbsp;</p>
<h3>C2C</h3>
<br>

![ecommerce business models-C2C-ebay](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image5_48c3cc742a.webp)

<p>C2C is an ecommerce business model where consumers sell to another consumer.</p>
<p>Think of the <a href="https://www.ebay.com/">eBay</a> platform where a consumer can set up a shop and can sell products. The C2C business model of ecommerce is valuable to those consumers where another consumer no longer finds the need for one product.&nbsp;</p>
<p>The business model can be used to sell personalized or customized products which other retailers cannot replicate.&nbsp;</p>
<h3>C2B</h3>
<p>As the name suggests, Consumer-to-business is where the consumer offers a service or a product to a business. It's like a marketplace where roles have been reversed &ndash; consumers set their terms and invite businesses to collaborate with them!</p>
<br>

![ecommerce business models-C2B-shutterstock](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image7_ddf892a6a0.webp)

<p>An example of a C2C business model is <a href="https://www.shutterstock.com/discover/india-0111?cr=em&amp;ds_ag=FF%3Dbrand-brand-exact_AU%3DProspecting&amp;ds_agid=58700002024098091&amp;ds_cid=71700000017766215&amp;ds_eid=700000001510406&amp;gclid=CjwKCAjwh8mlBhB_EiwAsztdBCJD7rCv2g0DLMJ8BxAnw_bAZJ7A2Rf3N76bRheXlkJFB5F0cTp5sxoCKrcQAvD_BwE&amp;gclsrc=aw.ds&amp;kw=shutterstock&amp;pl=PPC_GOO_IN_BD-618798084857&amp;utm_campaign=CO%3DIN_LG%3DEN_BU%3DIMG_AD%3DBRAND_TS%3Dlggeneric_RG%3DAPAC_AB%3DACQ_CH%3DSEM_OG%3DCONV_PB%3DGoogle&amp;utm_medium=cpc&amp;utm_source=GOOGLE">ShutterStock</a>. A platform with a collection of photos, allows businesses to utilize the images uploaded by the consumers in exchange for a credit.</p>
<p>The C2C model is a right fit when a consumer has value to offer to the business. This value can be defined as freelance work, an influencer with a large follower base, YouTuber with a own brand, or any such value that aids a business in taking your service to uplift or promote themselves.</p>
<h3>D2C</h3>
<p>D2C ecommerce model stands for Direct to Consumers, meaning your brand sells the product directly to the customer online. You get the advantage of having your own customer base rather than having a customer base of retailers.</p>
<p>For example, <a href="https://prose.com/">Prose</a> is a clean beauty D2C brand that sells its products through the online storefront.</p>
<br>

![ecommerce business models-D2C-prose](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image1_d2cd34c4df.webp)

<h3>B2B2C</h3>
<p>B2B2C stands for Business-to-Business-to-Consumer. The model emphasizes on businesses complementing each other with the services given to the same end user.<br /></p>
<br>

![ecommerce business models-B2B2c-playstore](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image3_546678ec32.webp)

<p><a href="https://play.google.com/">GooglePlay</a> is the best example of a B2B2C model. As we are aware this marketplace for apps serves as an ecommerce business to the consumers of the apps developed by other businesses who are the suppliers of the app.</p>
<p>The ecommerce business model makes sense for manufacturing startups to leverage the user base of the ecommerce channel of the other business. It allows them to cut down on the cost of having their own model setup that the other business offers to still be able to serve the end user. That way you only agree upon giving certain commission to the other business rather than having the entire setup of distribution.</p>
<h2>How to choose the right ecommerce business model?</h2>
<h3>Understand your audience</h3>
<p>As an ecommerce entrepreneur, identifying who your potential customers are, is an important first step. It includes segmenting your target demographic by age, gender, location, income level, education level, and occupation, and psychographic segmentation like interests, hobbies, values, and lifestyles.</p>
<p>The next step is to understand shopping patterns and behaviors.</p>
<ul>
<li>How do they shop online and what motivates them to place an order?</li>
<li>How are they feeling about the shopping experience?</li>
</ul>
<p>Especially for business models in emerging ecommerce areas that matters because younger audiences may value fast, mobile-optimized platforms, while older consumers prioritize clear information and customer service over everything else!</p>
<h3>What problem are you solving?</h3>
<p>Understanding the problem you're solving for your customers is important when deciding on an ecommerce business model. Your company's value proposition is tied to the problems that a company solves for its consumers and the business model should align with this.</p>
<p>Identifying the problems involves research. You can collect important data points by conducting surveys and performing competitor analysis.</p>
<p>The thought process would involve answering questions such as;</p>
<ul>
<li>What are the potential challenges that your customers commonly face?</li>
<li>How exactly are your products aiding your consumers?</li>
<li>Is there a viable gap in the market that your business will fill?</li>
<li>Is the problem significant enough for customers to pay for a solution?</li>
</ul>
<p><a href="https://haakaausa.com/">Haakaa</a> is a D2C brand that sells silicone breast pumps to the target audiences. Its copy highlights the key value propositions: electric-free, 100% food-grade silicone, and easy to assemble and use. A quick look at the brand&rsquo;s website shows that it understands the problems of the target audience (new mothers).</p>
<br>

![ecommerce business model-problem solving-Haakaa](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image6_9dc8795cf2.webp)

<h3>Revenue model</h3>
<p>The selection of the revenue model depends on the type of product and the audience that you are reaching.</p>
<p>Directly selling to customers is the most common way to generate revenue. Whereas a subscription model can aid in making recurring revenue in exchange for services or products for a subscription fee.</p>
<p>The different pricing strategies for ecommerce business model examples are:</p>
<ul>
<li>Competitor pricing</li>
</ul>
<p>The pricing strategy is based on tracking the prices of the competitors for similar products and considering an average price to sell.</p>
<ul>
<li>Cost based pricing</li>
</ul>
<p>The business focussed strategy to find the optimum price adding the product cost, shipping cost, along with marketing cost and the marginal profit that you wish to achieve aids in the selling price.</p>
<ul>
<li>Value based pricing</li>
</ul>
<p>It utilizes both the cost based and competitor pricing to come with the price of the product that adds value to your customer. Value based pricing takes into account the lowest selling price of the product, the average selling price of the product. On a difference of which we obtain the profit potential.</p>
<ul>
<li>Dynamic pricing</li>
</ul>
<p>Also called a demand and supply strategy where you decrease the price when there is high competition and increase the price when there is high demand and the supply is low.</p>
<ul>
<li>Bundle pricing</li>
</ul>
<p>When a customer is looking out for a specific product, you can bundle the offering with another relevant product to increase the average order value while giving it at a slightly discounted price.</p>
<h3>What is your positioning?</h3>
<p>You might have the best product to sell but what is the point of having if it's not marketed well? The positioning of your brand matters equally along with having a great product.</p>
<p>For example, add a clear copy listing the product features and benefits. Showcase the product in use with product videos. Have user generated content and reviews highlighting how the product solves their challenges. They also serve as social proof, building potential customers&rsquo; trust and confidence in your brand.</p>
<p>In a nutshell, your business-to-business marketing does not have to be fancy. Be authentic, backup your offerings with clear copy and good-quality visuals, and add social proof.</p>
<h3>Supply chain and logistics</h3>
<p>So who are the suppliers, how is the order shipped and delivered? How to optimize the time gap between the order and the delivery with the team of operations? These are some of the aspects the businesses need to look into.</p>
<p>The supply chain comes with 5 stages</p>
<ul>
<li>Supply and demand</li>
</ul>
<p>The supply and demand in the market give an outlook on the pricing of the products. Supply and demand are rarely in equilibrium, and these fluctuations are crucial to respond to fulfill customer orders.</p>
<ul>
<li>Warehousing</li>
</ul>
<p>The place where the products are received, stored, and distributed. Without smooth warehouse management, there isn't a smooth operation. And it is essential for the ecommerce businesses to handle the process efficiently.</p>
<ul>
<li>Inventory tracking</li>
</ul>
<p>Managing inventory is another step that is of great importance to your ecommerce company: be it B2C ecommerce business model or B2B ecommerce business model. The stocks in the inventory must be filled with the right products and in quantities. In order to meet all the orders on time, tracking the inventory implies that you have the products available at any point in time, cut down on excess items, and reduce over-selling.</p>
<ul>
<li>Order entry</li>
</ul>
<p>It is an entry in the record of order handling system for the retailers to schedule the activities to fulfill the particular order on time. Allowing both the store and the customer to be in line with the status of the deliverables.</p>
<ul>
<li>Order management</li>
</ul>
<p>At all stages of the supply chain, order management helps in coordinating with the process of order fulfillment.</p>
<ul>
<li>Distribution, delivery, and returns</li>
</ul>
<p>Distribution acts upon the warehousing and packaging of an item. Distribution is focused on the movement of the products from the supplier to the customer. Whereas the returns is a reverse management that tracks the order from the customer to the seller.</p>
<h3>Marketplace vs single vendor</h3>
<p>If you are a single vendor, it means you are the only one catering to multiple customers. In such instances, the stores usually have limited products to offer.</p>
<p>The multiple vendors are more like having a group of sellers in a marketplace selling to multiple customers and indeed having a vast range of products to cater to.</p>
<p>What is more important to understand here is the number of supplies that get involved in each type.</p>
<p>Having a good relationship with one supplier can be more reliable than having to handle multiple suppliers. And with huge volumes, they can reduce the cost of the product while dealing with a single vendor.</p>
<p>On the contrary, multiple vendors can turn out to be a savior when one supplier falls back though it might be difficult to handle and run a smooth operation amongst multiple suppliers.</p>
<h3>Growth and scalability</h3>
<p>Ever wondered how downtime can impact your profitability?</p>
<p>If you think it doesn&rsquo;t really matter much, then you might be wrong!</p>
<p>When Amazon launched Amazon Prime, it had to engage its 100 million Prime members with deals and discounts, the website couldn&rsquo;t handle the online traffic and during the peak volumes, it faced a major issue that cost them to lose <a href="https://www.emporix.com/blog/ecommerce-scalability">$1 million</a> per minute transactions.</p>
<p>The question is that when you start initially, you expect to grow year on year and be profitable. When you know your website is gaining traction and the volume is increasing, it means the number of orders is also increasing, this indicates that your website must be up for taking the traffic it demands and is well optimized for that situation.</p>
<h3>Investment and resources</h3>
<p>So what and all should be kept in mind before you start with one? The upfront cost of creating your platform includes development, design, and technology infrastructure for your website. Besides domain registration, <a href="https://www.lifesight.io/engage">website hosting</a>, security measures, and payment gateways.</p>
<p>Utilizing marketing tools such as <a href="https://www.lifesight.io/engage">Lifesight Engage</a> can significantly enhance your platform's growth by taking personalization to new heights, ultimately elevating the overall customer experience.</p>
<ul>
<li>Engage empowers you to make data-driven decisions for customer retention and personalization at scale.</li>
<li>By analyzing real-time click data, tracking visits, and monitoring expenditures on emails, SMS, and other channels, Engage provides comprehensive insights into user behavior and engagement.</li>
</ul>
<p>Set aside the budget for ongoing expenses such as advertising campaigns, marketing, software subscriptions, and website maintenance.</p>
<p>On the other hand, you need resources to handle the operations, all of this has to be estimated beforehand to seek sustainable growth with the ecommerce business model.</p>
<h2>Importance of choosing the right ecommerce business model</h2>
<p>Are you stuck with choosing the right ecommerce model? Here are the things to think about before selecting one.</p>
<ol>
<li>What product are you planning to sell?</li>
<li>Begin by understanding your audience and focusing on their needs.</li>
<li>What specific problems are you solving for them?</li>
<li>What type of revenue model makes the most sense for your company?</li>
<li>How are you positioning your brand in the market?</li>
<li>What is the approach to marketing and customer reach?</li>
<li>What is supply chain logistics?</li>
<li>Will you be trying up with a single vendor or be in a marketplace?</li>
<li>How are you seeing your business model from a growth and scalability standpoint?</li>
<li>How much investment is required and what are the tools you need to run the ecommerce business model?</li>
</ol>
<p>It is important to remember that the &lsquo;right&rsquo; ecommerce model differs for each individual product and business!</p>
<h2>FAQs</h2>
<h3>1. What are the most common 4 types of business models in Ecommerce?</h3>
<p>The 4 common ecommerce business models are:</p>
<ol>
<li>Business to Customer (B2C)</li>
<li>Business to Business (B2B)</li>
<li>Consumer-to-consumer (C2C) or peer-to-peer (P2P)</li>
<li>Consumer-to-business (C2B)</li>
</ol>
<h3>2. Which tools do you need to support the ecommerce business model?&nbsp;</h3>
<p>The tools supporting ecommerce business model are:</p>
<ol>
<li>Marketing - MailChimp</li>
<li>Analytics - Google Analytics</li>
<li>Sales &amp; Logistics - Shipwire</li>
<li>Customer Service - Zendesk</li>
<li>Communication - Slack</li>
<li>Content Creation - WordPress&nbsp;</li>
</ol>
<h3>3. How to design my ecommerce business model?</h3>
<p>Keep these things in mind while designing an ecommerce business model:</p>
<ol>
<li>Define your value proposition</li>
<li>Identify your target market</li>
<li>Choose a product or service offering</li>
<li>Select an ecommerce platform</li>
<li>Determine your revenue model</li>
<li>Plan your marketing strategy</li>
<li>Define your supply chain and logistics</li>
<li>Focus on user experience</li>
<li>Consider customer support and engagement</li>
<li>&nbsp;Analyze and adapt</li>
</ol>

Uncovering The 6 Diverse Ecommerce Business Models

Discover the secrets behind six diverse ecommerce business models that are revolutionizing online commerce. Uncover the strategies driving their success and explore opportunities for your own venture.

<p><em>With access to years’ worth of customer data, deep pockets and advanced tech capabilities, big brand ecommerce has been acing hyper-personalization strategies to keep their customers coming back. There is a lot for DTC brands to learn from big brand ecommerce, and this blog post is all about those lessons. And, we have a tip for you at the end. Read on to find out more!</em></p><p><em>"During the pandemic, direct-to-customer brands with thriving ecommerce experiences were able to very quickly and easily pivot their marketing and messaging, their energy. They didn't have to fundamentally rethink their business model."&nbsp;</em>This&nbsp;<a href="https://www.shopify.in/research/future-of-commerce/future-of-ecommerce">insight</a>&nbsp;is from Hana Abaza, the Global Director of Marketing for Shopify. She accurately summarizes the growth of DTC brands in the last couple of years.&nbsp;</p><p>Statistics reiterate this observation. According to&nbsp;<a href="https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/five-fifty-the-quickening">McKinsey,</a>&nbsp;the rise of DTC brands was so accelerated that they achieved their global 10-year prediction for growth in just 3 months – during the peak of the pandemic months in 2020. In the US and in 2020 alone,&nbsp;<a href="https://www.imrg.org/blog/direct-to-consumer-booms-during-covid-19/">DTC sales</a>&nbsp;grew by almost 25%. But with the pandemic loosening its clutches, DTC brands will have to upgrade their marketing and customer experience tactics. They need to pivot to continue capturing the attention of online shoppers.</p><p>This blog will explore three hyper-personalization strategies that DTC brands can adopt. These are tried-and-tested methods big ecommerce brands employ to successfully create tailored experiences for their customers.</p><h2><strong>Let's look at some examples, shall we?</strong></h2><h3><strong>Amazon</strong></h3><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:514px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="514px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac0f4e4840a92dc5f1dec_Ecommerce%20Personalization%20Strategy%20-%20Amazon%20Product%20Recommandation.png" loading="lazy" alt="Ecommerce Personalization Strategy - Amazon Product Recommendation" width="auto" height="auto"></div></figure><p>This user has been searching for an inexpensive black tee as a birthday gift for a male friend. After searching for an hour and giving up, she received this email from Amazon.</p><p>With the price and rating mentioned and the recommendation being right on point, the&nbsp;user is likely to make the purchase. Amazon has mastered the art of quick and relevant recommendations to their users based on their search history.</p><p>This step makes the shopping experience smoother, thus generating affinity among shoppers.</p><h3><strong>Dynamite</strong></h3><p>The customer had been looking for office wear ever since her workplace announced it was time to head back to the office. Dynamite took this as an opportunity to send an email with a curated collection of work-wear with a catchy “Revamp Your 9-5” tagline.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:514px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="514px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac11ae12315b675e3d5a1_Ecommerce%20Personalization%20Strategy%20-%20Dynamite%209%20to%205%20Email%20Campaign.png" loading="lazy" alt="Ecommerce Personalization Strategy - Dynamite 9 to 5 Email Campaign" width="auto" height="auto"></div></figure><p>This is directly relevant to the customer because of their real-time and real-world needs. Dynamite nailed personalization techniques based on the time a potential customer spent on a particular category of products.</p><h3><strong>Instacart</strong></h3><p>Instacart became a lifeline for US customers during the pandemic as stores shut down and delivery became the gold standard.&nbsp;</p><p>While this brand upped its marketing game in general, it employed specific actions too. One such plan was to cross-sell to nudge their regular users to buy sausages in addition to their usual grocery list.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:490px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="490px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac1515ea531065f091972_Ecommerce%20Personalization%20Strategy%20-%20Instacart%20Cross%20Sell%20Campaign.png" loading="lazy" alt="Ecommerce Personalization Strategy - Instacart Cross Sell Campaign" width="auto" height="auto"></div></figure><p>Instacart sent these emails to only those who had purchased meat from them before. Adding the same-day delivery option in their email was a smart move since frozen foods are often a quick alternative to other meals that take longer to prep. This shows that the brand understands the customer's thought process while buying quick meals.</p><h2><strong>What do these ecommerce brands teach us about customer engagement?</strong></h2><p>That hyper-personalization is at the core of their marketing and engagement strategies. Hyper-personalization is easy when you dive into the customer's purchasing history and demographics using a CDP and make a customer's shopping experience stress-free and seamless.</p><p>Ecommerce brands combine the following strategies to form a powerful hyper-personalization approach. With these, each customer feels like their individual needs are being taken care of:&nbsp;</p><ul><li><a href="https://www.lifesight.io/blog/drive-higher-aov-with-upselling-and-cross-selling">Upselling and cross-selling</a>&nbsp;in line with purchase history;</li><li>Creating curated offers based on user behavior;</li><li>Accounting for weather, season, or location when making recommendations;</li><li>Incentivizing the user to opt-in to marketing emails through discounts.</li></ul><h2>‍<a href="https://www.getmoda.io/blog/12-tips-to-drive-higher-aov-with-upselling-and-cross-selling">‍</a><strong>Three guiding principles dictate how brands should deploy these strategies</strong></h2><p>These hyper-personalization lessons have been the holy grail for big brand ecommerce for years. DTC brands looking to maximize conversions should ensure their campaigns follow one or more of these easy-to-deploy guiding principles:</p><h2><strong>Tip 1: Time the offer right</strong></h2><p>A significant chunk of your marketing and customer-engagement campaigns will go ignored if they are ill-timed. For example, if you send summer wear clothing to someone when it's snowing in their location, they are not likely to open the email no matter how lovely the collection might be.</p><p>Similarly, when someone abandons the buying journey mid-way, a well-timed reminder can bring them back on track (whether through an ad or an SMS) and encourage them to complete the purchase.</p><p>Incentivizing your shoppers with a discount to complete their purchase will help convert abandoned leads into paying customers. If not, simply allowing them to tell you why they didn't complete the purchase despite visiting the website will unlock further insights, as is evident from this Nespresso example.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:612px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="612px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac16a3549a1a44091df5e_Ecommerce%20Personalization%20Strategy%20-%20Nespresso%20Customer%20Survey.png" loading="lazy" alt="Ecommerce Personalization Strategy - Nespresso Customer Survey" width="auto" height="auto"></div></figure><p>Another approach to this strategy is to use audience segmentation to identify which segment celebrates which kind of holiday. Target them accordingly.&nbsp;</p><p>For example, this brand sent Easter-themed offers to customers who searched for or bought something Easter-related the previous year. This level of hyper-personalization leads to high conversions.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:452px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="452px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac181f0eb1cb55573dedb_Ecommerce%20Personalization%20Strategy%20-%20Easter%20Themed%20Offer.png" loading="lazy" alt="Ecommerce Personalization Strategy - Easter Themed Offer" width="auto" height="auto"></div></figure><p>Another golden opportunity to target your customer with an offer is when they have opted-in for your newsletter. Send them an email thanking them for subscribing and throw in a discount code. You have piqued their attention, so leverage that into action by incentivizing them and appreciating them.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:553px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="553px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac198f8115f79bd8faca4_Ecommerce%20Personalization%20Strategy%20-%20The%20Body%20Shop%20Welcome%20Gift.png" loading="lazy" alt="Ecommerce Personalization Strategy - The Body Shop Welcome Gift" width="auto" height="auto"></div></figure><p>A competitive CDP partner will help you automate all these processes to target customers with relevant offers at the correct time and on the right channel.</p><h2><strong>Tip 2: Deploy the 3P model - personalized product pitches</strong></h2><p><br>Personalizing your campaigns no longer starts or ends with inserting the customer's name in the ad (although it does help grab attention!). With marketing automation across the customer journey, you can offer everything from AR and VR experiences and match the in-store vibe to build customer knowledge and make choosing products easier (as done by skincare brands like&nbsp;<a href="https://www.glossier.com/picks/build-a-routine">Glossier</a>&nbsp;through a skincare quiz).</p><p>With actionable marketing communication, reel in customers with new product offerings that match their purchase history. Phrase the email in a way that makes the customer feel you have been thinking about them.</p><p>This ad from Dorothy Perkins does precisely that. The full-length email features a curated wardrobe that appeals to busy moms and professionals who don't have the time to coordinate their wardrobes. Dorothy Perkin’s emails targeted this exact audience cohort.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:716px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="716px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac1a9de864f2ee06437fa_Ecommerce%20Personalization%20Strategy%20-%20DP%20Personalized%20Email%20Campaign.png" loading="lazy" alt="Ecommerce Personalization Strategy - DP Personalized Email Campaign" width="auto" height="auto"></div></figure><p>Such tailored pitches come from data that provides a holistic, 360-degree view of the customer. DTC brands will be able to nail the insights they need for hyper-personalization with a dedicated CDP that compiles customer data from different channels.</p><h2><strong>Tip 3: Identify and solve for customer pain points</strong></h2><p>Ultimately, marketing communication that solves specific pain points will be the most successful.&nbsp;</p><p>An essential outcome you should look for from your customer data is that it should highlight an immediate shopper problem that needs solving.</p><figure class="w-richtext-figure-type-image w-richtext-align-fullwidth" style="max-width:553px" data-rt-type="image" data-rt-align="fullwidth" data-rt-max-width="553px"><div><img src="https://uploads-ssl.webflow.com/62e3888add6d204e844bff40/631ac1bd7add8c1191b5f015_Ecommerce%20Personalization%20Strategy%20-%20Uniqlo%20Workout%20Clothing%20Campaign.png" loading="lazy" alt="Ecommerce Personalization Strategy - Uniqlo Workout Clothing Campaign" width="auto" height="auto"></div></figure><p>Uniqlo sends these emails in the US during the summer, when women struggle to find sweat-resistant workout clothing that is comfortable.&nbsp;</p><p>DTC brands have to keep in mind that different audience segments may have various challenges, and their targeted emails, SMS and all other touchpoints should speak to these challenges.</p><h2><strong>Are these lessons challenging to adopt?</strong></h2><p>New DTC brands using big ecommerce brands' marketing playbooks may find it difficult to incorporate some of these strategies and the three tips. Crafting the perfect set of hyper-personalization campaigns that drive high ROI can be overwhelming, not to mention rather expensive.</p><p>But the democratization of CDP for modern DTC brands is well on its way with a new CDP in the market - Moda! <a href="https://www.getmoda.io/sign-up?utm_source=moda_blog&utm_medium=signup_link&utm_campaign=signup">Sign up&nbsp;for early access today</a>. We’re ready to help you cut through the noise and walk you into the new era of customer engagement for your DTC brand.</p>

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<p>The Customer Data Platform (CDP) landscape has seen a radical shift over the last few years, with 2023 ushering in a new era of innovation and user-centric approaches. With the CDP market predicted to be worth <a href="https://www.fortunebusinessinsights.com/industry-reports/customer-data-platform-market-100633">$5.5 billion by 2028</a> the technology is sure to grab eye-balls across industries. The rising popularity of CDP can be attributed to:</p>
<ul>
<li><a href="https://www.lytics.com/blog/the-30-most-important-cdp-market-stats-to-know-in-2023/">80%</a> new age customers give weightage to their experience with a brand rather than the product or service.</li>
</ul>
<ul>
<li>Marketers prioritize <a href="https://www.lifesight.io/identity-graph">first party</a> data to deliver personalized customer service.</li>
</ul>
<ul>
<li>Marketers emphasize getting a 360 degree view of customer interaction with a brand to formulate data driven marketing strategies.</li>
</ul>
<ul>
<li>Growing awareness of the importance of delivering stellar customer experiences among marketers.</li>
</ul>
<p>Over the years, CDPs have emerged as a one stop solution for customer data management, thanks to their ability to combine customer data from multiple sources to provide a single view. With features such as data integration, segmentation, personalisation, and campaign orchestration, CDP enables businesses to enhance customer engagement and achieve higher conversion rates.</p>
<h2>Evolution of CDPs: A Brief Overview</h2>

<p>Before delving into 2023&rsquo;s trends, it's essential to understand how <a href="https://www.lifesight.io/cdp">Customer Data Platforms </a>have evolved to meet the dynamic needs of modern businesses. CDP made its debut in early 2010 in response to the limitations associated with CRM systems. Below is a snapshot of how CDP has evolved since its arrival.</p>

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<p>As technology evolved, consumers started interacting with businesses through multiple channels like mobile apps, websites, social media, chats, instant messenger, emails, and more. There was an urgent need to collect data from all these sources in one place and create a unified customer profile to get a better understanding of the customer. In 2010, CDP entered the scene with the sole aim of collecting, organizing, and integrating customer data across all touchpoints.</p>
<p>The next phase involved adding features that enabled brands to connect both online and offline customer interactions to enable marketers to get a holistic view of customer preferences. In order to deliver highly personalized experiences, the focus has now shifted to personalization and segmentation capabilities. Adding marketing automation and analytics enabled businesses to design data (demographics, customer behavior, and preferences) driven campaigns.</p>
<p>With more advancements in technology and the rising popularity of social media and chats, customers now expect real-time responses. To accommodate customer preferences, CDPs incorporated real-time data processing capabilities, which enabled businesses to respond with relevant communication to customers in a timely manner. Next was integrating AI and ML (artificial intelligence and machine learning) into CDP platforms, which made them capable of conducting customer behavior analytics and predictive analytics.</p>
<p>In their current avatar, customer data platforms support omnichannel marketing, enabling businesses to deliver consistent communication and experiences across all customer touchpoints. They can seamlessly integrate with other existing systems, tools, marketing technologies, and the entire tech ecosystem, enabling businesses to leverage customer data across a broader spectrum.</p>
<p>Modern data platforms do more than just collect data in one place. They help businesses make sense of that data and utilize the goldmine of information to drive highly personalized, effective marketing strategies and, in the process, drive customer engagement.</p>

<h2>CDP in 2023: Latest Trends</h2>

![](https://mighty-basketball-fd4aeed960.media.strapiapp.com/image3_5a12e7d4c3.webp) 
<p>CDPs eliminate traditional data silos and create unified and centralized <a href="https://www.lifesight.io/cdp">first-party customer data</a>, making businesses capable of better leveraging consumer data and making it more accessible to teams that require the information for the campaign launch, analytics, and customer service.&nbsp;</p>
<p>The last two years have seen customer data platforms evolve by leaps and bounds. With CDP becoming so popular, one can expect the following trends to emerge:</p>

<strong>Rise of Real-time Data Processing</strong>

<p>Gone are the days of delayed analytics; 2023 marks the dominance of real-time data processing, allowing businesses to make instant, informed decisions. Organizations today cannot undermine the ability to gather, process, and analyze data in real time in the realm of consumer data management. With real-time analytics, businesses can capture and evaluate client interactions and behaviors as they occur. This enables them to quickly respond to client needs, anticipate new trends, and make data-driven decisions in a dynamic business environment. A plethora of big names, such as Airbnb, Expedia, and Sephora, rely on real-time data analytics to optimize their services and improve client experiences.</p>

<strong>Integrating AI and Machine Learning Capabilities</strong>
<p>Artificial intelligence and machine learning are no longer mere buzzwords; they've become integral parts of CDPs, offering smarter data insights and predictive analytics. AI &amp; ML have totally transformed how businesses manage and perceive customer data management. They enable businesses to automate data analysis, extract insights, predict customer behavior, segment clients, and detect patterns. Businesses today leverage AI and ML to make data-driven choices, improve consumer experiences, and propel corporate growth. All of this information helps businesses create highly engaging content that resonates with their customers.</p>
<p><a href="https://www.lifesight.io/cdp">Lifesight&rsquo;s CDPs Measure</a> module gives businesses access to advanced measurement techniques like multi-touch attribution, marketing mix modeling, and incrementality experiments.</p>
<strong>Enhanced Data Privacy and Security Measures</strong>

<p>We are all aware of rising cybercrimes, data protection, and privacy issues. CDP is all about customer data; hence, with growing concerns over data breaches and privacy, the latest CDPs of 2023 must prioritize robust security measures without compromising on data accessibility. Being compliant with regulations such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) is the first step towards ensuring data privacy and security and is non-negotiable. Transparent data handling, consent management, data privacy, and compliance are also legal requirements and differentiators in the realm of eCommerce.</p>
<p><a href="https://www.lifesight.io/connect"><strong>Lifesight&rsquo;s CDP platform</strong></a> integrates data into client's own data warehouses, giving them control over their data while ensuring they can derive maximum value from it.</p>
<strong>Omni-channel Customer Journeys</strong>

<p>The new-age tech-savvy customer uses multiple channels, both online and offline, to communicate with a business and expects the experience to be seamless. Mapping and understanding the omni-channel customer journey have taken center stage, enabling businesses to offer a seamless and personalized customer experience. Today, CDPs integrate data from both online (websites, mobile apps, and social media) and offline (physical stores) channels, providing a holistic view of their customers and becoming enablers of delivering consistent and personalized experiences both online and offline. Nike, Marks &amp; Spencer&rsquo;s, H&amp;M, and many other retail giants have embraced omnichannel strategies to deliver consistent experiences to their customers.</p>
<p>Lifesight&rsquo;s CDP platform, with its comprehensive data integration and omnichannel marketing automation capabilities, is capable of orchestrating seamless <a href="https://www.lifesight.io/engage"><strong>omnichannel customer journeys</strong></a> and experiences.</p>
<strong>Improved Data Unification and Quality</strong>
<p>The emphasis has shifted from merely collecting data to ensuring its accuracy, consistency, and reliability, ensuring businesses act on quality insights. The traditional third-party data (which is primarily demographic-based) no longer works when it comes to executing highly personalized campaigns at scale. Not to mention the garbage one collects in the form of duplicate and incorrect emails and other contact information. Unifying independent databases using the right technology helps a business get a holistic and accurate view of data and eliminates any duplicacy whatsoever. New-age CDPs such as <a href="https://www.lifesight.io/">Lifesight</a> ensure accurate and quality data by integrating the data sources and destination. Getting data from different sources to a single location ensures all departments within an organization are aware of the entire customer journey.&nbsp;</p>
<strong>CDP's Integration with Other Tech Tools</strong>

<p>Technology is a big investment, both in terms of time and money. Most organizations are already using some technology systems and tools. But this also poses the challenge of data lying in silos, and this siloed approach is a thing of the past and for a reason. The sources from which data is flowing in and the amount of customer data companies are handling today are unimaginable. CDPs need to up their game and seamlessly integrate with other marketing technologies in 2023 and beyond if they are to position themselves as the single source of truth for all customer data. A unified marketing ecosystem is what businesses are looking for in this digital era.</p>
<strong>The Growth of First-party Data</strong>

<p>Before we delve further, let's understand first-party data.</p>
<p><strong>First-party data:</strong> Every click, scroll, browse, add to cart, comment, or anything else that your customer does on your website, mobile app, or social media handle is first-party data. There is a reason it is gaining more popularity over third-party demographic data. First-party data collects customer behavioral and affinity data, which helps you decode what resonates with your customers and provides more predictive value.&nbsp;</p>
<p>No wonder that in the age of cookie-less marketing and privacy regulations, first-party data has become the gold standard for businesses aiming for effective customer engagement.&nbsp;</p>
<strong>CDPs to be utilized beyond marketing</strong>

<p>In the cloud-first world, a unified database system like CDP is not just relevant for marketing teams but also for other verticals like IT, sales and customer support teams as well. Giving access to customer data to all parties directly or indirectly dealing with them helps them get an in-depth understanding of customer needs, preferences, and behavior, which ensures omnichannel personalization and effective customer engagement.</p>

<h2>Must have CDP Features in 2023 &amp; Beyond</h2>
<p>In the modern business landscape, CDP plays a pivotal role in providing businesses with customer data that they can analyze and act upon with ease. However, with a plethora of CDPs available, choosing the right fit can be an overwhelming task, to say the least. However, given the current CDP trends, make sure you choose a platform that provides you with the following features:</p>

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<strong>Identity Resolution</strong>

<p>Customers today, though operating in a digital space, expect personalized preferential treatment and instant gratification. Hence, your CDP must be able to comprehend how your customers interact on your website, app, and all the touchpoints in their customer journey and create unique customer profiles. It should be able to match a customer's identity across various touchpoints, applications, and communication channels, which can deliver a personalized experience on every interaction.</p>
<strong>Integration with Existing Marketing Tech-Stack</strong>

<p>A good customer data platform must be able to integrate and utilize data from your existing marketing and advertising tools at a single location to make more sense of it. Furthermore, it should be able to do custom segmentation of customer data points to help you create highly personalized interactions across different communication channels and search engines.</p>
<strong>Perpetual Tracking of Customer Behavior</strong>

<p>Every customer is unique with their own preferences regarding products, prices, discounts, and even browsing habits, which change with time. <a href="https://www.lifesight.io/server-side-tracking">Tracking customers</a> is, therefore, not a one-time activity but an ongoing process. CDPs must therefore continuously track customer behavior across various touch points so that they get real-time insights on what is influencing their purchase decision at that very moment.</p>
<strong>Analytics</strong>

<p>A modern-day <a href="https://www.lifesight.io/segments">CDP</a> should harness the capabilities of AI and machine learning to provide you with information that is easy to navigate and act on. It should allow you to generate reports in real-time that are easy to share and use.</p>
<strong>Ability to Integrate Online and Offline Data</strong>

<p>Physical retail stores will never be out of fashion; they will continue to coexist with the online marketplace. To get a holistic picture, businesses need to integrate both online and offline data in a single place to create unique customer identities and engage them effectively both online and offline. Your CDP must have the ability to create a single source for both online and offline data points.</p>
<strong>Compliance with Privacy and Security Matters</strong>
<p>Make sure your CDP is privacy and security compliant. Do check for ISO 27001, ISO 27017, ISO 27018, CSA Star certifications, and the GDPR seal.</p>
<h2>Epilogue</h2>
<p>The CDP market will continue to evolve given the rapid pace of digitization and technological advancements. Data is the new gold and effectively utilizing data is the way forward for businesses to stay relevant and for long-term success and growth. Businesses today need to steer away from redundant technologies, embrace the latest trends and invest in a customer data platform that helps them stay relevant in the current scheme of things. <a href="https://www.lifesight.io/demo">Book a demo now!</a></p>
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