Executive Summary 

To CDP or not CDP? That is the question we ask in this white paper. Intended for marketers evaluating, questioning or struggling with customer data platforms (CDP), we dissect what a CDP really is, the value of it, and how to approach recognizing the need for your organization by addressing: 

1. The capabilities and functionality of a CDP
2. The value a CDP brings to different types of organizations 
3. The importance of use cases to demonstrate the need for a CDP 
4. The process for determining whether a technology infrastructure can support a CDP
5. An organization's readiness for a CDP
   

Is a Customer Data Platform (CDP) Right for You? 

An Unbiased Opinion.

What if we were to tell you that your organization absolutely needs a CDP? You would  probably nod your head in agreement. Maybe you would mumble “yes, I know” under your breath, possibly accompanied by a subtle eye roll considering this is the tenth time you have read the term CDP this week.

Now, what if we were to tell you that your organization may NOT need a CDP? What if we were to reveal that the trendiest acronym in marketing technology today may not be worth that hefty line item in your 2020 strategic plan? And what if we were to demonstrate that what you think you know about CDPs is not entirely true because no two CDPs on the market are one in the same?

We can probably all agree that a CDP is an incredibly powerful and valuable tool when executed correctly. But like most big marketing technology investments, without thoughtful consideration and preparation upfront, you will not yield value in return. Even worse, without organizational readiness and having the right people with the right skills and a diligent processes in place, making an impulse purchase on a CDP is setting your team up for failure. How about we avoid failure? Take a few minutes to digest our recommendations on how to best approach CDPs below.

Do your homework. It’s easy to get excited about the promise of a CDP and expect it to be the solution to all your customer data aspirations. On the other hand, it takes effort, diligence and asking the right questions to truly understand its overall capabilities, its approach toward resolving customer identity, and the value proposition of activating a CDP for your organization relative to other marketing technologies.

The definitions of a CDP have evolved over the years, and will continue to over time as functionalities mature and capabilities expand. Today, we generally define a CDP as a software system that centralizes customer data to create a unified customer view for other systems to access.

Originating as packaged software intended solely for marketing purposes, CDPs today are driving strategic business decisioning, operational enhancements and customer experience initiatives. The core capabilities of a CDP will vary depending on who you ask, but four generally agreed on capabilities across the industry today are summarized as: 

1. Interface with other systems to ingest and integrate customer data
2. Provide a unified and persistent customer view including known customer information, anonymous customer identifiers (cookies and pixels), and customer event history
3. Enable real-time segmentation and decisioning to power timely and intelligent interactions with customers
4. Provide access for other systems to distribute the unified data to enable personalized and relevant customer interactions
   

A CDP does all of this by processing ingested customer data through four key functionalities of the software - normalization, identity resolution, indexing and analytics. This process is visualized in the diagram below. Once processed, the CDP delivers the structured data to customer-facing channels through automated connections to enable personalized customer interactions. It is important to note that while the technology does much of the heavy lifting, making sure you have the right customer data strategy in place and technical resources to support the platform is equally (or even more) important.

A question we are often asked is what makes a CDP different from other marketing technologies, and in the same vein, how does a CDP relate to those technologies within our client’s tech stack. It is a common and valid question because while there are key differentiators, there is also a lot of grey area. To provide clarity you should document the primary purpose of each technology, the primary end users, and the related data handled. This structure creates boundaries while also highlighting relationships between the different platforms. For instance, a CRM, CDP and DMP all process customer data, but a CRM system is used for sales enablement, a DMP for programmatic media activation, and a CDP for intelligent interactions. All three platforms provide different, important functions for an organization, and they are all enabled by a different mix of 1st, 2nd and 3rd party customer data - a CDP being the only platform that unifies all three types.

KEY TAKEAWAY

Is a CDP right for you? If you are bringing a balance of curiosity, optimism and skepticism into your research and discovery process, then you are on the right track.

If you happen to be in the boat bypassing a thorough discovery altogether, blissfully hoping for the best as you sign that dotted line, we strongly suggest you turn around now. A storm is coming and you seemed to have left your captain ashore.

Listen to your use cases not the sales pitch. What you need is often different from what others say you need. The MarTech world is crowded and confusing, and the guiding light to navigate you through it is fueled by clarity and prioritization of your organization's goals and objectives. 

Harnessing disparate customer data to power real-time, intelligent customer experiences along with gaining customer insight are key benefits of onboarding a CDP. Although these benefits are constant, the focus, functionalities and requirements vary from one CDP vendor to another. This is because most CDP providers were around before CDPs were known as CDPs. They specialized in providing niche data solutions like tag management or data centralization, and ultimately were woven into “CDPs” over time, but all are cut from different cloths. 

Diving into the CDP selection process is overwhelming considering the variety of options out there, and it will be nearly impossible to pinpoint the right solution without a prioritized set of well-defined use cases to structure your vendor evaluations. 

As stated earlier, CDPs are used for strategic planning, marketing activation, operations and customer experience. Use case categories continue to expand as more organizations across different verticals adopt the technology and onboard it through a strategic proof of concept that is customized to their unique organizational gaps, growth goals and innovation aspirations.

A prominent CDP use case we see across most categories is intelligent personalization at scale. In retail, CDPs are activated to power personalized product recommendations. In eCommerce, CDPs drive real-time customer experience continuity across devices. And in Healthcare, CDPs equip call center agents with near-time data to personalize their call interactions in real-time.

Not only is it critical to identify your use cases, but prioritizing them is also key. It is important to start with a use case that sets you up for success by being attainable within a timely manner and measurable to prove its success. You should also focus your efforts on a particular use case, while keeping in mind the bigger picture, to ensure you have the resources you need to implement and activate.

You can prioritize your use cases using a methodology that is driven by three pillars of your larger customer data strategy: 

1. Organizational Alignment

Align each use case with your organization’s business objectives, and identify the way in which each use case will support them. 

2. Effort and Impact

Score the effort each use case will require to implement, and the impact each use case will have on your organizational goals. 

3. Data Access

Map the data streams and sources required to enable each use case, and route the means of access to that data and/or budget required for obtaining that data.

KEY TAKEAWAY

Is a CDP right for you?” If your well-defined, prioritized use cases depend on a CDP, then you bet!

If you are convinced you need a CDP but you are not entirely sure how you will use it, who will access it, or the logistics required to activate it, then press pause and take a 4x4 breath while we go find a whiteboard. We have some work to do first.

Understand that a CDP is not a stand alone platform. It needs to fit within a well-structured technology ecosystem, it requires strong connections to other systems and, clean, quality data flowing across those systems to function properly.

Like any marketing technology, before choosing a CDP solution you must first have a clear, honest picture of your current state data and technology infrastructure. From there, you can begin to distill needs and design your future state including a strategic map of connections with existing technologies. This is a challenging and critical step for on-boarding a CDP. If you skip it you run the risk of choosing the wrong technology solution and/or duplicating capabilities that you already have access to, creating inefficiencies, wasting cash and effort.

By illustrating your current state and future state design, you give yourself the opportunity to truly weigh all your CDP options, considering off the shelf products and the viability of build your own CDP-like capabilities if your current state infrastructure provides a DIY foundation.

In addition to technology design, data governance needs to be established as part of your larger customer data strategy to uphold the quality and security of your customer data. Creating a governance guide to document processes around data access, consent management, quality controls, ID authentication and deduplication underpins the reliability and value of your CDP outcomes.

KEY TAKEAWAY

Is a CDP right for you? If you have aligned your key stakeholders on its purpose and placement within your technology ecosystem, then a CDP is sure to support your vision.

If you are selecting a vendor without a clear picture of your current technology stack and future state vision, beware: you are bound to hit major roadblocks and risk derailing the entire implementation.

4. Technology alone is never enough. The balanced orchestration of people, process and platforms is fundamental for success.

A CDP implemented without the right supporting people and process will fail. A CDP driven by an operating model incorporating training, roles and responsibilities along the tracks of a strategic roadmap sets your organization up to realize the promise of enhanced marketing activation and customer experience.

KEY TAKEAWAY

Is a CDP right for you? If your organization is ready to embrace a CDP and open to the organizational change that comes with it, then absolutely!

If you feel like you are trying to push forward the effort alone, without the support, resources and funding you need, then today is probably not the day. But don’t worry, we are here to help.

In summary, a CDP is right for you if you have a strategy in place and are approaching evaluation and selection as a process guided by clarity and grounded in your strategic objectives. If you have hopped on the CDP bandwagon because, well, everyone else has, then it is important to take a step back and consider the following: 

1. Do I understand the capabilities and functionality of a CDP? 
2. Do I know the value a CDP would bring to my organization?
3. Do my priority use cases demonstrate a need for a CDP? 
4. Is my data and technology infrastructure set up to support a CDP? And if so, where does it belong and how does it connect to other systems? 
5. Am I organizationally ready for a CDP? 

If you answered “yes”, “not sure” or “no” to any of the above, let’s connect. At Transparent Partners, we specialize in helping our clients understand, evaluate, select, implement and activate the right CDP solutions, while providing the support needed to prepare. Learn more at Transparent.Partners or contact us at info@transparent.partners. We would love to hear from you!