# How to Build a Customer Data Platform (CDP) Strategy
In today’s digital landscape, Australian small businesses often have customer data scattered across Shopify, Xero, Mailchimp, and Facebook Ads. A Customer Data Platform (CDP) strategy allows you to unify these disconnected touchpoints into a single, cohesive profile, ensuring your marketing is relevant, timely, and compliant with Australian privacy laws.
Building a CDP strategy isn't just about buying software; it’s about creating a roadmap for how your business collects, manages, and activates data to improve the customer experience and drive growth.
Prerequisites
Before you begin, ensure you have the following:- A clear list of your current tech stack (e.g., POS system, CRM, Email tool, Website platform).
- Access to your privacy policy (to ensure compliance with the Australian Privacy Act 1988).
- Defined business goals (e.g., "We want to reduce churn by 10%" or "We want to increase repeat purchases").
- Key stakeholders (someone from sales, marketing, and IT/Operations).
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Step 1: Define Your Business Objectives
Don’t start with the technology; start with the "Why." What is the primary problem you are trying to solve? For many Brisbane businesses, this is often moving away from "spray and pray" marketing toward targeted personalisation.- Action: Write down three specific goals. For example: "Identify our top 10% of spenders to offer a VIP loyalty discount" or "Automate follow-up emails for customers who haven't purchased in 90 days."
Step 2: Audit Your Existing Data Sources
You likely have more data than you realise. You need to map out where customer information currently lives.- What you’ll see: Create a simple spreadsheet with columns for 'Data Source' (e.g., Shopify), 'Data Type' (e.g., Purchase History), and 'ID' (e.g., Email address or Phone number).
- Tip: Don't forget offline data. If you run a physical store in Fortitude Valley or a service business, your manual booking logs or paper sign-up sheets are vital data sources.
Step 3: Identify Your "Unique Identifier"
For a CDP to work, it needs a way to link a person visiting your website to the person who bought something in-store six months ago. This is called a unique identifier.- Common Identifiers: Email address (most common), Mobile number (great for SMS marketing), or a Loyalty Member ID.
- Australian Context: Ensure you are collecting these in a way that aligns with the Australian Privacy Principles (APPs), particularly regarding how you store and use sensitive information.
Step 4: Map the Customer Journey
Visualise every touchpoint a customer has with your brand. From seeing a Google Ad to receiving a post-purchase survey.- Screenshot Description: If you were using a tool like Miro or Canva, you would see a flow chart starting with 'Awareness' (Social Media/Search), moving to 'Consideration' (Website Visit), and ending at 'Retention' (Email Newsletter).
- Goal: Identify where data is being "lost." For example, if a customer calls your office, is that interaction recorded anywhere? If not, that’s a gap in your CDP strategy.
Step 5: Data Governance and Compliance
With the recent updates to Australian privacy regulations, data security is non-negotiable. Your CDP strategy must outline who has access to data and how it is protected.- Action: Ensure your strategy includes a "Data Cleanliness" protocol. How often will you remove duplicate records? How will you handle "Unsubscribe" requests across all platforms simultaneously?
Step 6: Select the Right CDP Category
Not all CDPs are created equal. Some are "Data-First" (highly technical, used for large-scale data warehousing), while others are "Marketing-First" (user-friendly interfaces for creating email segments).- Small Business Tip: For most Australian SMEs, a "Marketing-First" CDP or an advanced CRM with CDP capabilities (like HubSpot or a well-configured Klaviyo setup) is often the most cost-effective path.
Step 7: Define Your Segmentation Logic
How do you want to group your customers? This is where the magic happens.- RFM Analysis: A classic strategy is segmenting by Recency (when they last bought), Frequency (how often they buy), and Monetary value (how much they spend).
- Example: Create a segment called "At-Risk High Value"—customers who have spent over $1,000 but haven't visited your site in 6 months.
Step 8: Plan Your Data Orchestration (Activation)
Data is useless if it just sits there. You need to decide how the CDP will "talk" to your marketing channels.- The Workflow: If a customer enters the "At-Risk High Value" segment, the CDP should automatically trigger an SMS via a tool like Burst SMS or an email via Mailchimp with a "We miss you" offer.
Step 9: Establish a Measurement Framework
How will you know if your CDP strategy is working? You need to track the lift in performance.- KPIs to Watch: Customer Lifetime Value (CLV), Conversion Rate, and Return on Ad Spend (ROAS).
- Pro Tip: Look for a decrease in "Customer Acquisition Cost" (CAC). As your targeting gets better, you should spend less money on broad ads and more on high-intent audiences.
Step 10: Start Small and Scale
Do not try to integrate 20 different apps on day one. Start with your two most important sources—usually your website and your primary sales platform.- Action: Run a pilot campaign. Use your unified data to send one highly personalised email campaign and measure the results against your old "blast" emails.
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Pro Tips for Success
- Focus on First-Party Data: With the phase-out of third-party cookies, the data you own (emails, purchase history) is your most valuable asset. Prioritise collecting this over relying on Facebook’s tracking pixels.
- The ABN Check: When signing up for enterprise-grade CDP tools, ensure they have Australian data centres if you are handling sensitive health or financial data to comply with local regulations.
Common Mistakes to Avoid
The "Garbage In, Garbage Out" Trap: If your current CRM is full of duplicate entries and fake email addresses, a CDP won't fix that. Clean your data before* you sync it.- Ignoring the Human Element: A CDP is a tool, not a strategy. You still need a human to look at the insights and decide what creative message will resonate with your Brisbane audience.
- Over-complicating Segments: Start with 3-4 broad segments. If you create 50 tiny segments, you won't have enough time to create content for all of them.
Troubleshooting Common Issues
- Data isn't syncing in real-time: Check your API connections. Many lower-tier integrations only sync once every 24 hours. If you need instant triggers, you may need a more robust integration tool like Zapier.
- Customers are appearing twice: This usually happens because the "Unique Identifier" isn't consistent. Ensure every platform is capturing the email address as the primary key.
- The team isn't using the tool: Often, CDP strategies fail because they are too technical. Ensure your marketing team has a simple dashboard that shows them the "segments" they can use immediately without needing to write code.
Next Steps
Once your CDP strategy is documented, the next step is implementation.- Select your software: Compare tools based on your Step 6 findings.
- Integrate your first two data sources.
- Launch your first 'Unified' campaign.
Need help navigating the complex world of data and analytics? Our team at Local Marketing Group helps Brisbane businesses turn messy data into profitable insights. Contact us today to discuss your data strategy.