Customer Data Platforms, a must-have for marketeers?

In collaboration with NG Data, represented by Edwin Madou, three Squadra professionals (Roger Wegh, Mark Cartigny and Michel Brakenhoff) hosted a CDP workshop at the Beeckestijn Business School. CDP stands for the term ‘Customer Data Platform’, first introduced by David Raab in 2013, who later founded the CDP Institute. By 2018, the term had been universally adopted by the marketing analyst, vendor and buyer community. Nonetheless, CDP is not necessarily new. The capabilities of a CDP already lived within a range of tools and systems. Yet, what is different, is the new packaging of those capabilities into one integrated solution, which is the glue that connects all parts of the customer data ecosystem. Currently, the CDP market is rapidly growing, and is predicted to grow to $1 billion in revenue by 2019.

What is a CDP?

The definition of a CDP according to the CDP Institute is the following:

 “a marketer-managedsystem (packaged software) that creates a persistent, unifiedcustomer database that is accessible to other systems

A CDP exists out of three core tools. First of all, it connects and unifies customer data from a variety of channels and sources to create a single customer profile (stored in a persistent database, with real time access). Secondly, a CDP understands customer behavior, needs and expectations using data analytics. Hereby, a CDP is able to create (dynamic) segments within a customer group. Lastly, a CDP delivers relevant content and highly personalized offers across channels and possesses the tools to execute these (application, devices).

What drives companies to implement a CDP?

There are 7 main incentives for companies to implement a CDP, and they are listed below, each accompanied by a short explanation.

1. Growing MarTech fragmentation

A reason to implement a CDP platform is the growing MarTech fragmentation with systems that are not capable of communicating with each other. A CDP can offer the solution by becoming a single point of integration among existing and future marketing tools.

2. Customer data is stored in silos preventing a full single customer view

Marketers don’t have access to all customer data because data is siloed, locked inside the organization and scattered within a complex system landscape which negatively impacts the creation of a full customer profile. These complex system landscapes can become more organized by implementing a CDP, resulting in easier access to customer data, and an improved creation of a full customer profile.

3. Customers expect unified experiences across channels

Due to high customer expectations, a need to deliver unified experiences across channels has developed. Delivering unified experiences can only be done with a unified and comprehensive customer profile and full customer insights, something a CDP can provide.

4. Customers expect real-time personalization

CDP’s have the right capabilities to segment and act on the right audience based on their personae and behavior, enabling real-time personalization.

5. Organizations want Data Driven Marketing

There is need for a solution, given by a CDP, that supports data driven marketing, including customer insights.

6. CRM, Marketing Automation and other systems lack complete overview

CRM, Marketing Automation and other systems lack some of the capabilities possessed by CDP’s. Resulting in the lack of a full customer profile, real-time access and the ability to combine all types of data (offline, online, unstructured, structured and semi-structured data).

7. Need for marketer controlled solutions with less dependency on IT

A CDP provides a controlled solution for marketers to have direct access to data and make them less dependent on an IT department.

What are the different levels of CDP’s?

In order to illustrate and further explore the functionalities and architecture of a CDP, have a look at the image below.

There are several CDP platforms on the market, therefore, it is important to know how to pick the one best suited for your organization. Moreover, there are three levels of CDP’s, as listed below, each with their own capabilities.

1. DATA Assembly

A data assembly system is the standard CDP, including the following features:

  • Collecting customer data from several sources
  • Connecting with customer identities
  • Storing in persistent database
  • Available for external systems

2. Analytics

An analytics system is slightly more advanced, with the additional analytics functionality, including:

  • Segmentation
  • Machine learning
  • Predictive modelling
  • Revenue attribution

3. Customer Experience

Lastly, a customer experience system is the most advanced, with the additional customer treatments, including:

  • Personalized messages
  • Real time interactions
  • Product or content recommendations
  • Outbound marketing
  • Customer journey orchestration

What needs to be taken into consideration before deciding on a CDP system?

In order to make the right choice, three steps need to be followed. First, define your business vision, afterwards, define use cases and requirement, and lastly, define must have features, compare the different systems and select the best suitable system for your organization.

What is the difference between a CDP, a DMP or a CRM system?

Last but not least, a comparison has to be made between a CDP, a DMP (Data Management Platform) and a CRM (Customer Relationship Management) system. The image below illustrates the most important differences. The most important differences are the fact that a CDP is the only system providing real-time data, and personal-level customer profiles based on attributes and behaviors.

We hope hereby, we gave you a sufficient overview of what a CDP is, what the advantages are of implementing a CDP, and its most important features and functions. If you have any questions regarding this topic, don’t hesitate to contact us!