In terms of what marketers want right now, we’ve heard several themes emerge over and over again in the past year, and they’re all related to customer data management.
What’s a customer data platform, or CDP? Is it a DMP? Simply, no to the latter. Your data management platform is such a valuable tool for managing first-party data and building your programmatic advertising around. Don’t fall out of love with it just yet. A CDP does something different though – it brings the data about your known customers and prospects into one place.
Maybe you can already identify duplicates in your system – one touch from in-store shopping, another on your site, another through social service – with your existing tools. A CDP will build out that profile of the customer identified – it’ll use data, collected with consent, from point-of-sale, e-commerce, website, mobile app and other sources – and it’ll store a unified profile of that individual. So you can really see them and you can really connect with them.
Of course, the inevitable reaction to the latest martech has already happened.
Last October, Forrester released a report “For B2C marketers, customer data platforms overpromise and underdeliver” – which could be because a recent Winterberry Group analysis found that only about one in five products sold as a CDP actually is.
Customers tell us they are intrigued but also bewildered by what they're hearing about CDPs, from start-ups and pundits alike. We’ve also heard several themes emerge over the past year when we’re talking to marketers about what they need now, and they’re all related to customer data management:
Data integration: marketers use data from so many sources, and each source increases the need for integration of data. And we can quantify this one with hard numbers – according to our State of Marketing report, marketers use a median of 15 data sources, up 25% since 2018.
Customer-based marketing increases tension around personalisation and privacy: moving from segments and personas to hyper-targeted messages requires identity and consent management, and neither is easy.
Predictive analytics are on the rise: Again, we can put some hard numbers around this anecdotal feedback we’re hearing – we project an average growth of 2.6x in the use of AI by marketers, mostly to improve segmentation, propensity models and recommendations.
Marketers want to do better at real-time, omnichannel interaction: in addition to pre-planned campaigns, marketers need to respond better to prospects and customers when they’re engaging with their channels.
Ultimately, I think marketers are asking for help with two distinct but related things – insights and engagement. And this is the second reason that Forrester report may be on the money: existing CDPs deliver parts of one or the other, but none delivers both yet. Marketers need:
An ‘insight platform’: a flexible customer database, storing information from multiple sources and exposing that data to analytics and other systems.
An ‘engagement platform’: the technology layer that takes the customer insights and delivers them in real time to real people. It enables true omnichannel marketing and personalised engagement at scale.
If you’re using Customer 360, you know that Customer A and Customer B in two different systems are the same person. Great start.
With a CDP, you have a unified profile of that person – and it’s built on all of the data they’ve shared with you. In terms of broader business benefits, we know trust doesn’t come solely from collecting data with consent – trust is built on using that data well, not just holding it. It comes from using the data customers have provided to you to show them you know them – to make every interaction easy for them.
To deliver broader business benefits at the same time as increasing the effectiveness of marketing strategies and tactics, an enterprise-grade CDP must first be a tool for marketing, providing a single customer view (insight) and a way to reach customers directly (engagement), and be a tool that holds and identity beyond marketing interactions. Limiting a CDP to marketing data misses the bigger picture – the opportunity to make every customer touchpoint (service, commerce, sales) relevant and engaging.
At the end of the day, the CDP is not really new. It embodies a long-held desire to build a single view of the customer, from common data sources, and to make that view available for analysis and activation.
Each year, marketing gets more complicated and customer data more fragmented. Customers use an average of five devices and engage with brands on as many channels, according to our recent State of Marketing report.
At the same time, the marketer's basic need to understand customers and deliver better one-to-one engagement remains as strong as ever. On the surface it should be easier – so much data! – but managing that data and deriving insights is the challenge.
CDP is certainly hyped, but it ultimately brings something new and transformative to marketing – a solution to one of marketing’s current challenges.
To find out how high-performing marketers are balancing data, privacy and channel proliferation, download the State of Marketing report.