Enter the Customer Data Platform

How would you like to find a magic wand that makes your current marketing systems more powerful, new systems easier to deploy, and all systems run faster? It sounds too good to be true, but that wand actually exists. It’s called a Customer Data Platform (CDP).

Put aside your natural scepticism for a moment – I promise we’ll address your doubts later. Before we can do that, you need to understand what a Customer Data Platform is and how it works.

The Customer Data Platform Institute defines a CDP as “a marketer-controlled system that builds a unified, persistent customer database accessible to external systems”. The key elements of that definition are:

– Marketer-controlled system. This means that marketers are in charge, even though an IT department or external vendor might set up and run the CDP. Being in charge means that marketers make the major decisions, and that in turn depends on the CDP being packaged software that can easily be configured to a particular marketing department’s needs. In fact, there’s a reasonable case that “packaged software” should really replace “marketer controlled” in the CDP definition. But CDPs are almost universally purchased and managed by marketers, so it seems best to leave “marketer controlled” as an explicit condition.

– Unified, persistent customer database. This means the CDP loads detailed data from many sources, links all data related to individual customers, and stores the data permanently. This lets the CDP generate the “single customer view” that is desired by so many marketers but achieved by so few. Detailed data lets marketers use the CDP to answer nearly any question, including questions they didn’t expect to ask when they set up the system originally. Permanent storage means the CDP can find trends, patterns, and changes over time. These features let marketers fully reach customers and provide the best treatments possible. Holding data in the CDP lets marketers replace other systems without losing data those systems store internally.

– Accessible to external systems. This means that data in the CDP can be used by any other system, not just the CDP itself. It’s important because many marketing systems that assemble something resembling a unified, persistent customer database for their own purposes but don’t expose it externally. The ability to share data is one of the most powerful features of the CDP, allowing it to enhance operations of many systems throughout the organization.

That all sounds good, but it may still be unclear how CDP differs from other systems that work with customer data. One way to think about it is to contrast systems along the three dimensions just described:

– Data warehouses and data lakes can build unified, persistent databases that are open to external systems. But they’re custom projects for an IT department or external vendor, not packaged software managed by the marketing team. Custom data warehouses and data lakes are notoriously large, time-consuming projects that often fail to deliver the expected results.

– DMPs (data management platforms) are marketer-controlled software packages that make their data available to other systems. However, DMPs are assemble audiences of anonymous Web browser cookies based on a narrow set of attributes. This is far more limited than the detailed database created by a CDP.

– Data integration hubs and Web tag managers are also marketer-run and do deal with detailed data. But they pass that data from one system to another without storing it in their own persistent database. As we’ve already seen, it’s impossible to track customers effectively over time if you don’t store their history somewhere.

– Marketing automation, CRM, marketing cloud systems and journey orchestration engines (JOEs) do create a persistent database but are often limited to their own data or subsets of data from other systems. Most do a poor job of connecting data from different sources that relates to the same customer. And they frequently place severe limits on access to their data by external systems.

In short, the CDP offers a uniquely useful combination of features, overcoming disadvantages of other customer data management solutions. But now that sceptic in the back of your head is surely waving his arms and demanding to be heard. Let’s listen to his objections and respond as best we can.

Objection: “It’s too good to be true!”

Response: CDPs have been deployed successfully at hundreds of companies. You don’t need to take anyone’s word that they work: you can check references and case histories. If you’re wondering how CDPs achieve seemingly impossible results, it’s because they use “big data” technologies and standardized components that have just recently become available.

Objection: “Our IT staff are smart as anyone. They can build the same thing.”

Response: Yes they can, given enough time and money. But the packaged nature of CDP systems means they can be deployed quickly, cheaply, and with little risk of a project running into unexpected problems. Few people build a custom accounting system today because excellent accounting packages are widely available. It’s the same with CDP.

Objection: “Organisational politics are what really prevents us from sharing all customer data.”

Response: CDP removes some excuses, reduces expected costs, and makes the benefits more obvious. This should make it easier to overcome organizational resistance.

Objection: “We can’t truly unify all customer data because identifiers don’t always match up.”

Response: You don’t need perfect identity matching to create a useful customer database. And CDP does the best unification job possible.

Objection: “Our customer interaction systems can’t use CDP data.”

Response: Many marketers find that analysing their unified customer data is immensely valuable, even if interaction systems don’t connect to the CDP directly. And as you replace those old interaction systems with modern ones that are able to use external data, the CDP will be ready to provide it.

Objection: “Our staff aren’t ready to take advantage of what CDP makes possible.”

Response: They can be trained. CDP vendors are often able to help.

Objection: “Customer data is a corporate asset. It shouldn’t be controlled by marketers.”

Response: Marketers need it more than anyone, so they’re the logical team to spearhead the project. The CDP can easily share its data with other departments once the CDP is running.

Objection: “GDPR! Privacy and security are increasingly regulated. Marketers don’t know how to maintain compliance.”

Response: Data protection, IT, compliance, and other departments can be involved in CDP without owning it. In fact, the central data management offered by CDP can be key to meeting GDPR requirements.

You may have other objections. It’s quite likely that CDP vendors can provide you with reasonable answers. The critical point is that CDPs offer great value to companies struggling to make the best possible use of their customer data. It’s worth spending some time to learn if they can work for you.

This is a sponsored article from BlueVenn. You can find them here.

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David Raab

David Raab

Founder, Customer Data Platform Institute

David Raab is Founder of the Customer Data Platform Institute www.cdpinstitute.org and Principal at Raab Associates www.raabassociatesinc.com, a consultancy specializing in marketing technology and analysis. He can be reached at draab@cdpinstitute.org or @draab on Twitter. He blogs frequently at http://customerexperiencematrix.blogspot.com/

September 4, 2017

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