Aug 30, 2022

Customer Data Platform (CDP): A game changer or just another acronym?

Rob Queenan

Rob Queenan

Customer Data Platform (CDP): A game changer or just another acronym?

In this blog we discuss what Customer Data Platforms (CDPs) are and aren’t, the value they could potentially bring to your organisation, and the things to consider if you are thinking about implementing one.

 With the rapid increase of customer expectations forcing companies to become more user-centric, the evolution of Marketing technology has not only been an enabler for this improvement, but also a necessity. 

It simply wouldn’t be possible to act upon customer interactions quickly, execute campaigns at scale, or provide customers with content that is relevant to their personal needs without marketing technology (MarTech) – not least without the massive operational overhead anyway.

Read next: Whitepaper: Are you failing to deliver a single view of the customer?

I already do all those things with my existing MarTech stack, so what value will a CDP really add?

To better answer this question, we’re going to take a quick trip down memory lane. As stated in this History of the CDP article, the birth of the CDP is intrinsically linked to better-known acronyms in the marketing technology space, such as CRM, CDM, and DMP.

CRMs (Customer Relationship Management) have been around for almost 40 years and were originally introduced to provide a digital replacement for the old school ‘Filofax’ of contact information (something that remains a challenge to this day).

Then came CDMs (Customer Data Management) and DMPs (Data Management Platform) in the 2000s, enabling companies to scale much more easily with cloud-based SaaS solutions, as well as providing a location for masses of anonymised data to be stored and activated.

What became apparent, however, was that these tools were deeply technical. They were often managed by IT departments as opposed to Marketeers themselves, which meant they were usually deployed without the customer-centric mindset of a true Marketing SME. It was these limitations that led to a significant fracturing of the MarTech landscape.

Fast forward a little over a decade, and nowadays it’s possible that companies can have dozens, if not hundreds, of different MarTech software. They can simultaneously execute campaigns, create content, manage contact information, and provide customers with the omni-channel digital experience they demand.

Now we’re not suggesting using different software to perform specific activities is necessarily a bad thing. Often it can be better, and even cheaper, than committing to a single company who claims to do it all.

 Think about something as simple as your weekly shopping. Of course, it’s possible to pick up cakes from the supermarket with all of your other essentials, but if you want the high quality cake for a special occasion, you might decide to pay a baker or cake maker a visit instead.

Whilst it’s easy to combine your specially designed birthday cake with cheese and pineapple bought from Tesco (other suppliers are available of course) at a party, it’s nowhere near as straightforward combining data housed within the myriad MarTech software your company uses.

 This is where the CDP comes in. CDPs have been specifically designed to enable marketers to aggregate their customer data in one place, and use it for things like personalisation, segmentation, and predicting next best actions. 

CDP diagram
CDP diagram

Wait, so I can replace those other pieces of MarTech software if I buy a CDP?

The answer to this question is at the forefront of many CMOs’ minds right now. If I spend thousands of pounds on a CDP, will I be able to save millions by getting rid of all this other tech?

Sadly, the answer isn’t quite as straightforward as that.

 As with a lot of software, the answer is you potentially could  replace all those other pieces of technology with the right CDP. The real question is whether you should.

Much like our cake analogy above, there is functionality within some CDPs that could replace other MarTech software to store customer data, for example. A CDP does give you the ability to store customer data, but it does so in a much less practical way than a native CRM which will restrict lots of key sales and marketing business activities. There are other elements of functionality you could leverage as well, but the majority of these, whilst serviceable, will limit other business activities that specialist technologies enable as well.

 So, whilst in most cases purchasing a CDP would be in addition to already owned MarTech software, that doesn’t mean there aren’t cost savings to be had. You just need to dig a little deeper.

You mean I might spend money adding a CDP to my MarTech stack, but could still actually save money?

It is possible yes, however those cost savings might not be so apparent.

 One of the key drivers behind wanting a CDP is to connect multiple data points to provide that omni-channel, seamless, personalised customer experience we talked about at the beginning.

Whilst this may be enough for some of you to use a sizeable chunk of that annual budget, the added benefit of this also means that you can review how you’re currently attempting to integrate all that data together.

 The objective of this review would be to reduce, or even remove, the need for complex, and often expensive, technical solutions such as middleware or API layers, that are usually managed from within more costly IT departments.

 CDPs are providing a key and much needed role in the modern MarTech stack, both in enabling that fantastic customer experience we all crave, as well as empowering Marketing teams by removing technical costs and barriers to how that experience is delivered.

It sounds like a CDP is the answer to all my problems and the sooner I get one implemented, the better?

This is probably the most common mistakes that is made when buying and implementing any MarTech software, but especially a CDP.

Back in 2020, CISQ reported that unsuccessful IT / Software projects were costing US companies $260 billion dollars - an increase of almost 50% since 2018. This is a trajectory that continues to increase. To understand how to avoid falling into this trap when it comes to your CDP implementation, take a moment to think about your success outcomes.

 If you look at any CDP software using comparison sites such as Behavioural Response, you will see a common thread across all of them. Whether it’s predictive analytics, personalisation, segmentation, or omni-channel engagement you’re looking for, every single one of these is reliant on you building a Single Customer View (SCV).

Unfortunately, building a Single Customer View doesn’t just happen overnight. You don’t plug in your CDP, switch it on, and then ‘bang,’ you can see a 360-degree view of every customer you have on file.

Before you can fully realise a Single Customer View, and maximise the value of something like a CDP, you need to have a clearly articulated, documented, and governed customer data strategy. What customer attributes do you want use for your segmentation? To personalise your content? Which are most relevant to help you make AI driven product recommendations?

Without a customer data strategy, you may still achieve some of the benefits of a CDP, but you are just as likely to be asked why such a significant investment still hasn’t resolved some of the issues that you are trying to address – for example, multiple communications being sent to the same customer, content that doesn’t appear to match the customer’s preferences, or worse still, sending a customer something who has legally opted out of communications altogether.

Solutions to all these common marketing challenges are certainly within your grasp with the right CDP, but without the necessary customer data strategy to compliment it, all you’ll end up with is another new piece of expensive technology your staff will have to learn how to use with little value to be gained.

 Okay I get it now, getting a CDP is only half the solution. Looks like I’m going to need some help with this…

At Credera, we recognise the difficulties that can arise in selecting the right technology. We can help organisations understand how to get the most out of not just their CDP, but also the data it needs, to avoid it simply becoming yet another piece of MarTech to add to the pile.

With over 30 years’ experience in transformation, we support organisations in their transition to providing an omni-channel, automated, and personalised experience that fulfils their customers’ needs. Together with the right CDP, a Single Customer View will help organisations to realise the full potential of their marketing strategies and retain brand loyalty for years to come.


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