According to Twilio Segment's fourth annual Customer Data Platform Report, customer data platforms (CDPs) have become important for companies as they are dealing with more customer data than ever before. The report, which is based on data from over 25,000 customers, shows that businesses are focusing on the vast amount of data they have gathered and using it to drive efficient growth.
The use of CDPs has grown significantly because of the increase in customer data volume. In fact, the report shows that there was a great increase in the amount of data being processed, with a record of 11.7 trillion API calls on the Twilio Segment platform. The report also indicates that companies are shifting their focus from just collecting data to using it to make business decisions and take action.
The study highlights the importance of a CDP for all modern business technology systems. It allows companies to quickly access and use real-time customer information, create a comprehensive understanding of their customers' interactions with the company, and drive significant growth.
“In 2023, brands are faced with conflicting demands: maximize customer retention, activate the product and customer data they are collecting, and do it all while increasing operational efficiencies. This report shows that CDPs are the key to meeting all of these challenges for a wide variety of organizations. In some cases that means using CDPs to leverage product and customer data in order to drive retention and growth. In other cases, it means increasing data efficiency by eliminating redundancies and streamlining their tech stacks. In all cases we’re seeing companies derive tremendous value from collecting, organizing, and acting on data in real-time,”said Kevin Niparko, VP of Product Management, Twilio Segment.
The CDP Report suggests companies are looking for ways to make their data systems more efficient. As 57% of marketing leaders feel they are wasting money on tools that do not work well, the report suggests ways to streamline the technology stack and focus on solutions that will have the most impact.
Key CDP Report findings
1. Companies are becoming more strategic about the data they collect, and they try to get more value out of their investments. Twilio Segment has been working with more and more customers who want to improve the efficiency of their data processing and increase their return on investment. An example is Twilio's recent strategy for one customer, which they implemented after identifying that they were tracking repeat events and sending it to unnecessary destinations. With simple changes to their workspace and by collecting data more efficiently, the customer saved 1.6 billion API calls per month, resulting in significant savings in terms of time and money.
2. Business solutions are seeing fast growth. Twilio Segment allows customers to connect with over 400 different SaaS applications, with popular ones including Google Analytics, Mixpanel, and Facebook Pixel. However, in 2022, the biggest app was June, a product analytics tool, which saw an 83% increase compared to the previous year. Other solutions, such as Algolia, a search and discovery platform, and Vitally, customer success software, also experienced significant growth. With the use of API-driven platforms like Segment, it has become more cost-effective for companies to find and leverage new solutions alongside their existing vendors. This trend indicates that there are still opportunities for specialized solutions that meet critical business needs, even in a challenging economic environment.
3. Data warehouses have become increasingly popular. In 2022, they were the second most popular destination for customer data after analytics apps and before advertising apps. Over half of Twilio Segment customers (53%) use data warehouses as a destination for their customer data. By using a CDP with a data warehouse, non-technical teams can access real-time data without needing to rely on data engineers. Companies can then create a complete and accurate view of their customers and empower their marketing and data teams to work directly on the data they already use, activating it within their existing systems.
4. Consumers are increasingly leveraging data-deletion request capabilities.
Many global privacy regulations now demand organizations to allow customers the option of deleting their personal data. In 2022, Twilio Segment received and processed a total of 23.4 million data deletion requests from users, which is a 69% increase from the previous year.Elsewhere, Twilio has recently revealed its Twilio Segment for Healthcare & Life Sciences, a HIPAA-eligible customer data platform that enhances patients' experiences and health outcomes.