You might need a Customer Data Platform to start of with. Or maybe not?
The term Customer Data Platform was initially coined by David Raab in 2013 to describe various types of marketing systems that shared the capacity to build a unified customer database.
Most of these systems created a database to support an application such as predictive modeling, website personalization, or campaign management. Over time, many vendors recognized that other applications could also use that database. These vendors added features to allow access by other systems, converting their systems into full CDPs. During the same era, several Web analytics and tag-management vendors understood they could transform their data-gathering systems to create a persistent database, creating another sort of CDP.
By 2016, both sets of vendors had united to form the CDP industry. The industry has multiplied ever since as marketers realized the need for unified data and the shortcomings of alternative solutions such as data warehouses, data lakes, CRM, and DMP. Growth in Europe was further fueled by CDP features that help companies comply with the General Data Protection Regulation (GDPR).
In 2016 David Raab founded the CDP Institute to create consciousness amongst marketers and technologists about CDP capabilities. The Institute published its first Industry Update report in January 2017.
The term Customer Data Platform defines as
the marketing-managed technology that can deliver a unified, persistent view of the customer and is accessible to other systems.
During the 5th Conference, Stefan Seghers from Roularta and Gerhard Louw from Deutsche Telekom will elaborate on how they have approached their CDP project and the value it has brought their organizations.
Let’s start by stating that every company will have a different version and interpretation of what its CDP should be and look like, based on the various goals. While every unique context requires a unique approach, some of them are key and relate to the definition in the following ways:
It’s about the individual human being as a customer, not a group of them. The term Customer Data Platform refers to the singular, not the plural.
Notable is that it is a marketer-managed system that differentiates from enterprise data warehouses, which are built and managed by IT departments. CDP adoption will often start with the marketing department because it focuses on marketing needs: customer, prospect, and product data as a driver of growth.
It’s packaged software bought and administered by business users, most often in marketing, with minimum assistance from the corporate IT department or an external vendor. The packaged nature of the system makes it much easier to deploy and change as new needs arise. Even though most CDPs are designed to be marketing tools, they can also have applications across the enterprise that can provide a valuable assist to the Chief Information Officer (CIO) who views data strategically as something that needs governance and efficient management.
CX is dead. Long live Customer Experience fueled by data.
Research by Forrester predicts that “20% of brands will give up on strategic Customer Experience (CX) initiatives and resort to price reduction for short-term gains.” In 2018, customer experience performance stalled for the third year in a row. The study opines that there is a structural mismatch between what CX – the goal of a CDP – needs to do and what is capable or allowed to do. The same research finds that 50% of CMOs bring the brand back as a priority. The bottom line is that most strategic CX initiatives failed to demonstrate ROI.
The final 2019 edition of the State of the Customer Experience reveals that the top three challenges for delivering CX are limited cross-departmental collaboration (44.5%) and siloed systems/customer data (44.2%) as a second.
If a CDP is to function as a marketer-managed system, then the marketer must demonstrate leadership and take the reins. A significant root cause for CX performance stagnation is, according to Forrester, the fact that CX failed to “champion and lead disruption in the existing operations and organizational silos”. So that’s an internal battle, not an external one.
It’s a unified, persistent customer database.
A CDP is unified: it collects data primarily from a company’s own systems about identified individuals. However, it may also include data from multiple external sources, disparate systems, and anonymous individuals. It stores at least some data permanently and can associate data with personal customer identifiers to create and present a unified customer view. ‘Persistent’ means that the CDP is storing the customer data permanently, rather than reading it from the source system or replicating it into multiple customer-facing systems.
In other words, a CDP is the Marketers Single Source of Truth and should contain actionable customer data. It is the starting and ending point for any interaction the potential, and existing customer have with a brand.
These are 6 essential questions you might want to ask yourself when considering using a CDP:
- Who are your primary customers, and what are they trying to achieve? To what extent are you contributing to their achievement?
- What is the business need that arises from you contributing to your customer’s achievements? What are you trying to achieve yourself? What are your purpose and goal? How will you define and then benchmark CDP success? What KPIs do you want to measure?
- How complicated is your current omnichannel environment where your customers and prospects live?
- What are the scenarios you are trying to enable which your current martech stack cannot accommodate?
- How complicated is your current martech stack? How would the new technology fit into that stack? What systems would you integrate through the CDP? Can you make the integrations that matter, and are high-quality & action-oriented?
- How efficiently do you currently manage your marketing data process?
- What is the volume of data you want to manage?
- Is the data clean and reliable? (see this blogpost on data quality for more detail)
- Are the data collection methods relevant to your business and your engagement channels?
- How important are security, governance, and compliance, and do you have the process and team to manage?
- Can I get access to all of my data, at any time?
If you intend to become more data driven – you might consider registering for the workshop with the founder of the CDP institute himself – David Raab.
You’ll understand the definition of a CDP, how CDPs differ from other systems, when you need a CDP, which features are shared by all CDPs and which are found in only some, the most important CDP use cases, how to select the right CDP, how to manage a successful deployment, and where to look next for more information.
It will be a a mix of lecture, discussion, and exercises ensure your questions are answered, and you come away with a working understanding of key challenges and opportunities.
The workshop will cover:
- Why CDPs matter, including how CDP fits into the larger marketing data architecture and the key benefits provided by CDPs
- How CDPs create value, including how CDP relates to business and marketing strategy, primary,n CDP use cases, and uncovering requirements for CDP success
- Selecting the right CDP, including requirements definition, key differentiators, specific features to look for, and running an effective selection process
- The opportunity to ask your questions to a panel of CDP solution experts
Key takeaways will include:
- Clear understanding of CDP capabilities vs. other systems
- When a CDP is needed and when it is not the right solution
- Mapping CDP use cases to CDP system requirements
- Checklist of marketing technology functions needed to benefit from CDP
- 27 Key CDP features and how to know which you need
- CDP pricing, deployment time, and management best practices