The rise of the Customer Data Platforms
In the midst of chaos, CDP’s were born
Being a marketer means living in a paradoxical world. We’re constantly being exposed to changing market circumstances which present challenges to our businesses. In this article we will highlight three main market trends that are leading to two business challenges.
The first two trends are linked to the users. On the one hand our clients expect premium user experiences rich in personalisation. On the other hand, the context in which we operate is getting more complex and restrictive from a legal point of view. Complex as the amount of interactions a user can have with a brand grows exponentially (online offline and across customer touchpoints). Restrictive as users expect more control and transparency over what brands do with their data. Which is their fundamental right.
The third trend is linked to the landscape in which we evolve: the rise of third party players (technology providers) that are providing new solutions to help us tackle the challenges brands are facing. These players are highly specialized to tackle specific problems. They provide accurate solutions that the historical players were never really able to provide. This ever growing ecosystem of vendors with overlapping capabilities forces teams to decide on the strategy they want to use to manage this reality. Indeed, if predicting the pace at which this ecosystem will evolve is impossible, it is unlikely to believe we will face less complexity in the future.
Staring at those trends, most marketers ask themselves the following: where do I start and how to start ? As mentioned, earlier, the tree identified trends lead to two main challenges:
1. personalization requires user data unification. Offering coherent and premium user experiences require data unification across the board: online and offline. This data unification comes with the additional challenges of data privacy.
2. The tool integration. According to chiefmartech.com, “integration is by far the most important criteria when selecting marketing technologies - and it's changing the industry.”. Today data often exists in silos, buying top notch technologies is the right choice only if it can all serve a common vision and strategy.
Luckily, customer data platforms (CDP’s) are providing a solid answer for those challenges.
What is a CDP ?
While CDP was an unknown acronym a few years ago. Nowadays, it has become one of the most used ones. To ensure we are all aligned, let’s demystify what a CDP is all about:
(1) At its core, a CDP is a data pipeline. It connects sources of data to destinations. This is how it is solving the integration challenges we mentioned earlier. Sources can be digital assets (website, app SDK, social network, media platforms, CRM, ERP, cloud instances, etc.) and/or offline elements (stores data, weather, surveys, etc.). Destinations are also of different kinds: media platforms, CRMs, cloud instances, data lake, website, A/B testing tools, data visualization tools, etc.).
To summarise it with different words - CDP’s outsource API management from your engineering teams to a SaaS product. Instead of building and maintaining API connections on your watch, the CDP takes care of ensuring two elements can be linked and commits to ensure the links stay operational.
(2) On top of those data flows, CDP’s are building a unification engine to tackle the second challenge we have mentioned. The CDP creates and manages something called an identity graph. An identity graph keeps track of the different identifiers (users ids, emails, cookies, etc) that are linked to a single user. This enables a CDP to unify all users actions across the different touchpoints the user is having with a brand.
This unification engine allows marketers to build user segments based on unified data and across integrated tools. This ensures the activations are consistent and coherent for all clients and users. Concretely, let’s imagine a retailer that sells sports gear both online and in its stores. Using a unification engine will allow that retailer to connect the offline purchase of a bike to the customer’s digital experiences. The result could be bike accessories as product recommendations whenever the customer connects to the sport retailer’s website.
Are all CDP’s alike ?
CDP’s are the new black. Nowadays a large bunch of tools brand themselves as CDP’s while they are often missing the core elements that would allow us to consider them as such. Here are according to us the fundamental elements that differentiate high quality CDP’s from the rest of the flock:
Data Quality - “crap in crap out” is often used to summarise the main issue that arises with automation. As a CDP will be used as the core of your data architecture, it is essential to ensure that the collected data is qualitative and controlled. Moreover data quality is not a static thing. It requires constant effort and a clear strategy.
Data Governance - means “the policies and rules about where and how data can get used”. Looking at the CDP’s definition we gave in the previous section, one can easily understand how a well implemented CDP will allow teams to ensure a strong data governance.
If you are looking into implementing a CDP you should ensure the elements above are part of the solution you are considering.
Finally when it comes down to which solution to choose as today the number of CDP providers on the market is growing exponentially we believe it is important to operate as follows: (1) list the providers that give you the minimum features you are looking for and (2) assess the human aspects behind the provider (the approach to innovation, the values, the positioning, the vision, etc.). Indeed buying only upon features makes no sense as those can be built up over time. When you buy a solution, you commit to a tool at a certain point which includes the current features but more importantly how this will evolve over time.
How should you get started with a CDP implementation ?
Technology and tools are only the means to get to an end. Therefore choosing whether you should implement a CDP needs to be a business driven decision that’s backed with the proper resources. CDP’s are expensive tools. Therefore implementing one should only be considered and realised if the business impact it will bring is positive to ensure the investment is profitable. Having the right partner will help you do so.
At Human 37 we have developed methodologies to accompany our clients to enhance their customer experience. Interested ? Feel free to reach out!