A Customer Data Platform (CDP) is a software system that helps present a unified, persistent and updated view of an individual customer, based on data from interactions across multiple channels, platforms, and devices.
CDPs also let data flow back and forth between various customer data systems to execute campaigns and manage experiences.
Though a relatively new concept, CDPs are undoubtedly already central to customer experience (CX), and they continue to evolve at an unprecedented rate. The term has reshaped itself from when it was originally defined by David Raab, founder of the CDP Institute, as the ‘marketer managed technology that can deliver a unified, persistent view of the customer and is accessible to other systems.’ It has been interpreted in different ways by different vendors and even users. So, choosing a CDP software is never about the ‘best CDP’ in the literal sense of the word but it’s about the ‘the best CDP solution for you.’
Your choice of Customer Data Platform partner stems from your unique context, use case(s) and desired outcomes. A limited comparison of vendors based on a limited list of features can never be comprehensive or even fair; and will not provide you – the prospective user – the perspective needed to shortlist vendors. In addition, it’s important to acknowledge the way CDP vendors themselves are reinterpreting CDPs based on their knowledge of their preferred markets; and positioning or aligning themselves into different areas of specialization.
Who Needs a CDP and Why?
Even though, as a marketer, you aim to be as data-driven and customer-centric as possible, you’re still wondering whether a customer data platform (CDP) is the right solution for you. Why not a CRM, Marketing Cloud or even what is being called an Experience Cloud that lets you do all that in other ways? Does your organization specifically need a CDP, or would some other data engine be a better fit?
Anthony Botibol, Marketing Director at BlueVenn said, “A CDP is an evolution of something all modern marketers (should be) familiar with – a marketing database. In this case, a CDP is a marketing database, purpose-built for the API-driven world and ‘pick and mix’ marketing technology stacks in mind, while also allowing for the integration of offline sources and legacy database and infrastructure”. This gives you some idea of who could use a CDP.
But we propose a set of 5 core questions to ask yourself to better understand if a CDP would be the right solution for your unique organizational context.
Top 3 reasons why marketers need CDPs
Even though each marketer has a unique context, some of the core reasons why you may need a CDP include:
- Marketing complexity: you operate in a complex marketing environment with multiple channels, platforms and devices, with complex customer journeys – characterized by a high volume of prospects and customers, with a high volume and velocity of customer interactions, and where customers expect to receive relevant and timely marketing messages to help them make the best buying choices. These could include retail, travel and hospitality, D2C (direct-to-consumer) industries such as fashion, cosmetics, etc. For example, if your data requirements, as well as the omni-channel interaction platforms, are wide, diverse and evolving, a CDP will help set up a robust foundational platform for the ever-evolving and growing data, and data sources. If you had extremely limited, regulated and industry-specific data requirements, from a very limited set of pre-defined sources, you could probably work with a CRM or even the broader organizational data warehouse. If your data sources, internal data applications/ users, and martech stack are all growing in volumes and complexity, you want to have a single reservoir that can ingest, transform/ enrich and make accessible the data to this expanding user base.
- Regulation, compliance and privacy are central to your customer operations and business viability: in sectors such as banking, finance and insurance; healthcare, legal etc, it is crucial to maintain prospect and customer privacy, as well as have the most real-time, up to date customer data available to communicate with them accurately and securely. In such cases, a CDP could be the most robust way to build a strong, secure and persistent data foundation for not just marketing but all customer interactions.
- Leveraging customer data more strategically: most marketers find that their data and marketing operations have both become extremely siloed over time, with data stuck in pockets and marketing campaigns running so distinctly as to deliver fragmented customer experiences. For marketers who have invested in data collection or at least build reliable channels to collect customer data, it could be a very real competitive advantage to find ways to unlock the power of that data for customer-centric marketing and run orchestrated marketing campaigns
How to Choose the Right Customer Data Platform (CDP) Vendor / Software?
- Define your context
- Define your use-cases and outcomes
- Define your own list of must-have features and capabilities
Categories and types of CDP :
As we said, the CDP vendor landscape is rapidly evolving, and vendors are claiming new areas of specialization to better meet the needs of their ideal user.
- Data management: these CDPs specialize in managing and organizing complex data
- Data analytics: these CDPs specialize in segmenting, targeting and predictive modeling using the data
- Data orchestration: these CDPs specialize in helping to activate the customer data using your existing marketing technology stack to run complex cross-channel campaigns.
- Deeper specializations: In addition, CDPs today tend to organize by specialization:
- CDPs specializing in B2C or B2B industry applications
- CDPs focused on specific industry verticals, such as healthcare, BFSI or ecommerce
- CDPs designed for the distinct needs of enterprise, mid-market or SMB scale organizations
Depending on the complexity of operations and business needs, marketers today are even adopting a combination of different kinds of CDPs – a data focused one for the customer data management and a marketing activation focused CDP for the actual last-mile customer interactions.
Coutersy: Martech Advisor