Enterprise Customer Data Platforms: A Marketer’s Guide
Editor’s Note: The following is an excerpt from the MarTech Intelligence Report, “Enterprise Customer Data Platforms.” If you are considering licensing a Customer Data Platform, this report will help you in the decision process. You can download the entire report by filling out the registration form at the bottom of this page.
The customer data platform (CDP) market is expected to generate $1 billion in revenue by 2019, according to the CDP Institute, as both employment and the number of CDP vendors doubled in 2017. Driving growth is a perfect storm of increasing complexity in the customer journey, the martech stack and data governance.
A CDP is not a CRM, DMP or marketing automation platform
There is still some market confusion about how a CDP differs from a CRM, a DMP (data management platform) or a marketing automation platform. A CDP provides the following three core features that together make it unique from other systems:
- A unified, persistent customer database that provides data transparency and granularity at the known, individual level. A CDP can identify customers from many different data sources by stitching together information under a unique, individual identifier. The CDP then stores its own copy of the data.
- Marketer control over customer data collection, segmentation and orchestration through native (out-of-the-box) integration that does not require IT or developer help.
- Data integration of both known and anonymous customer data with any external source or platform, including CRM, point of sale (POS), mobile, transactional, website, email and marketing automation.
CDPs can be used as systems of record, storing both known and anonymous customer profiles in a central hub that integrates data from all of the organization’s various software systems. The data is accessible for marketing analysis, segmentation and insight discovery, with the goal of increasing the velocity and effectiveness of omnichannel marketing campaigns.
In this report, a CDP is defined as a marketer-managed system designed to collect customer data from all sources, normalize it and build unique, unified profiles of each individual customer. The result is a persistent, unified customer database that shares data with other martech systems. (Sources: CDP Institute and LUMA.)
Vendors ranging from tag management solutions to personalization platforms to pure-play CDP providers currently offer CDPs. Virtually all of the CDP vendors profiled in this report provide the following core capabilities:
- Data management (collect, normalize and unify customer data in a persistent database);
- Identity resolution to stitch customer data snippets from disparate sources;
- User interface (UI) and features designed for marketing organization use, without the aid of IT or data science resources; and
- Data access to all external systems on a vendor-neutral basis.
CDP vendors differentiate by offering more advanced capabilities that include – but are not limited to – the following:
- Structured and unstructured data management;
- Online and offline data management;
- Analytics that enable journey mapping, audience segmentation and predictive modeling;
- Orchestration for personalized messaging, dynamic interactions and product/content recommendations;
- Compliance with vertical industry and international data regulations.
The benefits of using a CDP
Marketing executives today are in charge of dozens of martech applications to manage, analyze and act on a growing volume of first-party customer data. But instead of increasing efficiency, the emerging martech ecosystem has created problems with data redundancy, accuracy and integration. Automating customer data accuracy and integration through a CDP can provide numerous benefits, including the following:
- Expanded enterprise collaboration
- Improved data accessibility
- Streamlined systems integration
- Increased marketing efficiency
- Faster marketing velocity
- Stronger regulatory compliance
How to select the right CDP
Understanding your current marketing processes, knowing how to measure success and being able to identify where you are looking for improvements, are all critical pieces of the CDP decision-making process. The following section outlines four steps to help your organization begin that process and choose the CDP that is the right fit for your business needs and goals.
(Get a full list of questions and checklists for these sections when you download the complete report.)
Step One: Do you need a CDP?
Deciding whether or not your company needs a CDP calls for the same evaluative steps involved in any software adoption, including a comprehensive self-assessment of your organization’s business needs, staff capabilities, management support and financial resources.
Step Two: Identify and contact appropriate vendors
Once you have determined that a CDP makes sense for your business, spend time researching individual vendors and their capabilities. Talk to your peers, attend industry events, read up on various vendors. Decide whether you’ll want a formal RFI/RFP process, and narrow your list of prospects to three or four solutions you want to demo.
Step Three: Scheduling the demo
Set up demos within a relatively short timeframe of each other to help make relevant comparisons. Make sure that all potential internal users are on the demo call, and don’t be shy about asking any and all questions.
Step Four: Check references, negotiate a contract
Before deciding on a particular vendor, take the time to speak with several customer references, preferably individuals in a business similar to yours. Use this opportunity to ask any additional questions, and to find out more about any questions that weren’t answered during the demo. Make sure that the person you’ve been referred to is a primary user of the platform.
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