We live in a data economy. The explosion of data and the ability to use it to make better decisions has changed how we do business for the better.
Many organizations are finding that even though they may have all the information they need, putting it all together and figuring out how to use it can be difficult.
Data solutions are the answer. How can you choose the right tool for your business when there are so many different options? What do each of these tools actually do?
What you need to know about six types of data solutions
Let’s look at six different types of data tools to understand better how they can help your business harness the power of their data. We will also examine the purposes they serve and the benefits they provide.
1. Customer Data Platform (CDP).
What’s it all about? A Customer Data Platform, according to the CDP Institute, is “packaged software that creates an accessible, persistent, and unified database of customers.” A customer data platform is important because it not only provides a central location to store first-, third- and second-party data but also allows for easy action to be taken based on this data.
Who is it for? Marketing teams and sales departments that are focused on retaining and engaging prospects and customers can use CDPs to run more efficient and informed campaigns.
Is it necessary? A CDP can be beneficial to any business that has customer data in multiple systems. This platform combines all the data into a 360-degree perspective. A CDP helps marketing and sales users better understand their customers and act accordingly. A CDP streamlines processes, simplifies reporting, and allows users to take action on the data from one location.
What examples are there of a CDP? Hull, mParticle, Zaius
2. Customer Relationship Management (CRM).
What does it do? It manages your business’s interaction with customers and prospective customers to provide users with insight into the relationship. A CRM is a record of all points of contact with customers and potential clients.
Who Uses It? Sales Teams use CRM systems to maintain their relationship with customers. This makes it a supercharged (and modern) Rolodex. Some marketing teams and customer service departments may also use CRM data to manage interactions with customers and prospects.
Do You Need It? CRM systems are necessary for managing customer and prospect relations at scale. A CRM system logs all interactions with customers, which is an important way to keep track of the actions taken by prospects and customers, as well as what information was shared. This information is essential for salespeople in order to perform their job effectively and report on sales activities. This data can also be used to create a 360-degree customer view by combining it with data from other platforms for the go-to-market (e.g., marketing automation).
What CRM examples are there? Pipedrive, HubSpot, Salesforce
3. Data Management Platform (DMP).
What does it do? It aggregates and organizes data from second and third-party systems. Although the two platforms sound similar, they are quite different. DMPs have one main purpose, which is to segment data coming from external sources and create intelligent groups of clients for advertising campaigns. A DMP only holds data for 90 days (the life of a cookie). A CDP is a tool that can be used to understand data and take action on it. It can also act on first-party historical data at any time.
Who is it for? Marketing agencies and marketers can use it to drive advertising campaigns, such as by creating “lookalike audiences” for customer acquisition.
Do You Need It? You can use both a CDP (for all marketing activities) and a DMP (for paid advertising campaigns), but in some cases, you may want to combine the two. The DMP will focus on data from third parties, while the CDP will concentrate on your first-party customer data. If you’re going to use your first-party data to create long-term campaigns to engage customers and prospects over time, then a DMP is not the right choice.
What examples are there of a DMP? Adobe Audience Manager, Oracle BlueKai, and Lotame
4. Data Integration and Workflow Tools
What does it mean? Data Integration and Workflow Tools carry data between systems, perform actions such as mapping and cleansing data, and transform data. These tools can move data, manipulate it, and then trigger actions depending on criteria.
Who is it for? Marketing, sales, and IT users all have different ways of using data integration and workflows to move data between systems.
Is it necessary? Workflow and data integration tools are important for combining and standardizing information. These tools are especially important if you have a CDP. They can help to transfer data from other systems within the organization into your CDP so that it is accessible for reference and action.
What examples of data integration tools and workflow tools are there? Zapier Automate.io Segment Tray.io
5. Data Lake
What’s it all about? Data lakes store both structured and non-structured data in their original form. Data lakes are highly scalable, and data can never be deleted. This allows data lakes to store historical information for any period. A data lake is not capable of analyzing data.
Who is it for? A data lake can store large amounts of data in its original form. It’s best suited to data scientists, who are able to handle different types of data on a large scale.
Do You Need It? A data lake is a great way to store all types of data for as long as you want. A data lake can be a challenge for businesses without a team of data scientists to manage it.
What examples are there of data lakes? Amazon Web Services (AWS), Google Cloud Platform (Informatica),