Do you have access to customer data but don’t quite know how to transition from having them to actually using them? Then a Customer Data Platform (CDP) could be the right solution for you. Find out what customer data platforms do, why they play a key role on the journey to digital success, and how they differ in their focus depending on the provider.
Key CDP facts & vendors
We are in the midst of a digital transformation that means one thing above all for businesses: It’s time to rethink the world and reinvent yourself as an organization – with all the new tools at your disposal. This multitude of new technologies presents managers with a considerable challenge.
Where do I start? What tools do I need? How do I manage ever-increasing amounts of data? This is where we’d like to start today. Data is the oxygen of digital transformation, as it – digitalization approached from a holistic perspective – creates and evolves its very own ecosystems. A viable strategy for the use of data is the prerequisite for companies to meet the challenges of our time. The solution to bring order to your data jungle: customer data platforms (CDPs).
Why do we need CDPs?
The underlying problem are so-called data silos. These data pools are created as a side effect of a decentralized organization and separate data storage within individual departments. It is the task of CDPs to consolidate these heterogeneous data from different sources and to make them usable for their respective applications.
The overarching goal is to create a holistic customer experience and achieve successful data-driven marketing. After all, the correct handling of data promotes an understanding of customer behavior. And sustainable customer retention is one of the keys to long-term business growth.
Definition: What is a CDP?
A customer data platform is used to collect, consolidate and segment customer data from different sources. This creates a solid database from which short- to medium-term use cases (action scenarios) can be derived for marketing and other purposes. The advantage is that the CDP is accessible to other systems. This means that the data can be used to distribute personalized, user-relevant content on all digital channels.
The prerequisite for this: The stored data has been obtained in compliance with data protection regulations and with the consent of the user, for example, via a cookie bar – the magic word, in this case, is consent management.
What can CDPs do?
Customer Data Platforms can have different focuses:
- Pure data management: data CDP
Data from different sources and of different quality are consolidated into a uniform database (customer profiles). Systems in this category can already be used to extract and transfer data to third-party systems, for instance, to e-mail marketing tools.
- Segmentation & predictive modeling: analytics CDP
Data segmentation is the preparation of the data for their actual application. By breaking down the data into relevant sub-segments, companies create their own insights and, depending on the provider, can already access more advanced functionalities such as journey mapping or revenue attribution.
- Real-time interaction planning & communication orchestration: campaign CDP
With the help of artificial intelligence (AI), immediate measures and campaigns can be derived from segmented data – for example, by means of live integration. In some cases, different actions can already be triggered within a segment for different people in the segment and managed via a variety of channels.
- Focus on distribution across a large number of channels: delivery CDP
The mobile-first approach has significantly increased the number of available channels. In addition to email communication and text messaging, it is now primarily push notifications from apps that are gaining in importance. The trend shows that, in many cases, more channels are included in the communication strategies of companies than are taken out. The delivery CDP addresses the core of this increasing channel complexity.
- CEP – customer engagement platform
Engagement expertise includes the targeted integration of all available channels with a corresponding data response tool. Special CEPs facilitate communication with customers based on their activities and the storage of all interactions.
Important: A CDP should always be looked at in the context of the overall stack of marketing technologies used at your company.
Similar, yet different: What are customer experience platforms (CXP)?
The customer data platform cleans up, consolidates and segments customer data and thus forms the basis for the tasks of a customer experience platform (also called digital experience platform or DXP). The CXP is responsible for utilizing the processed data to deliver relevant, personalized content to users at the right time and via the right channel. All in the spirit of and for the purpose of an optimal (digital) customer experience!
Customer experience platforms can also be connected to analytics, e-commerce and marketing automation tools. This offers exponential benefits for companies.
Note: The clear demarcation between CDP and CXP is still a subject of debate in the software market. We at valantic believe that these are two disciplines that should be distinguished from each other, whereas another common usage of the terms sees CXP as part of the CDP genre.
CDP vs. CXP: the differences at a glance
- Customer data platform (CDP): consolidation of unified, high-quality customer data from diverse sources
- Customer experience platform (CXP): using the data records from the CDP to distribute personalized content to different channels with pinpoint accuracy
When do I need my own CDP/CDXP as a company?
The introduction of a CDP makes sense if …
… your company works with a tangled mess of data, and you want to finally put things in order.
… you would like to provide your contacts with relevant marketing content in a more targeted manner.
… you want to get more out of existing data in the areas of marketing, sales and customer service.
… you lack the data foundation for meaningful, personalized marketing campaigns.
… you would like to have all customer data collected on a central platform that is accessible to all key stakeholders.
Providers of customer data platforms / customer experience platforms
The number of CDP vendors keeps growing. Big players have entered the business alongside start-ups. A selection of the most important platforms can be found below.
Spoiled for choice?
When selecting marketing technologies, valantic offers a best-of-breed approach. That means: We prefer creating a flexible and customized selection of platforms instead of offering a one-size-fits-all solution. Why? Because this allows us to provide our clients with a mix of technologies and tools tailored to their company. We are convinced that going this extra mile for our clients is well worth it.
Before deciding on the right MarTech package including CDP, the following steps should be taken:
- Comprehensive business and marketing discovery
Let’s find out exactly where your company is at! We recommend an in-depth workshop with all stakeholders. The goal: consistent information among all stakeholders and a binding roadmap
- Clear scoping of requirements
It pays to visualize the actual as well as the target processes for various system applications – with a clear focus on functional process relationships. This allows us to specify the technical requirements more precisely.
We recommend: a technology-agnostic approach
Take a transparent and solution-oriented approach and consider all technology providers on the market! Which vendor meets your company’s functional, technological and organizational needs? Who strikes the perfect balance between meeting today’s requirements and mastering tomorrow’s challenges?
Tip: Try different customer data platforms, and get all stakeholders involved in the decision-making process!
CDP-/CXP providers – a selection
We familiarized ourselves with a few providers and have assigned the individual providers’ strengths to the above-mentioned CDP genres with their respective focuses. Since CDPs – as a young but nevertheless powerful software category – are increasingly becoming the focus of smaller and larger providers, this selection can, however, only be a snapshot (as of March 2022). Considering the high development dynamics, it only serves as a rough guide.
Bloomreach Engagement is a fully integrated customer data and experience platform (CDXP) with a focus on events. Every interaction can be registered; segmentation of customers and definition of appropriate communication actions is possible in seconds.
- Focus: data & experience
- Suitable for: B2C
- Strengths: product recommendations, AI, analytics, standard integration with more than 90 tools
This customer engagement platform from Berlin is an ideal campaign tool thanks to strong segmentation filters.
- Focus: campaigns & engagement
- Suitable for: B2C
- Strengths: segmentation, many standard integrations
Salesforce CDP has only been on the market for a relatively short period of time and is therefore not 100 percent “mature” yet. We recommend it if other Salesforce products are already in use.
- Focus: data and analytics CDP
- Suitable for: B2C
- Strengths: integrates well with Marketing Cloud, CRM and other Salesforce tools
SAP’s customer data platform is still relatively young, still in the development stage, and thus new features are constantly being launched. In addition to the CDP, SAP Solutions also offers a Marketing Cloud with the core function of a campaign CDP and SAP Emarsys, a CEP as a complement to the CDP.
- Focus: data and analytics CDP
- Suitable for: B2C
- Strengths: pure data processing, queries the reason for processing
Other providers at a glance
- Tealium: data CDP for B2C with more than 1,300 standard integrations
- Segment (Twilio): a market leader in B2C with a focus on analytics; extendable with Twilio Engage (CEP)
- Lattice: a market leader in B2C with a focus on analytics and data enrichment; pure CDP, bundled only
- Leadspace: pure analytics CDP and one of the market leaders in the B2B space
- Terminus: a B2B market leader; CEP with CDP features (data enrichment)
Once you have found the right customer data platform, the next step is its agile implementation. At valantic, we are convinced of the agile approach because it offers the following advantages as an undogmatic and reliable project methodology:
- perfect fit and optimum quality of the implemented system
- higher efficiency and shorter project duration due to parallel conception and implementation
The final stage in the implementation process: adoption and engagement. Organizational development based on the predefined target processes can be carried out, for example, by means of training and newly created positions (e.g., CDP experts).
Conclusion on customer data platforms
The marked growth of the market for customer data platforms is the best indicator of the current relevance of CDPs. This makes the deliberate and careful choice of a platform that meets your company’s individual requirements all the more important. One thing must be clear: Implementing a suitable CDP is one of the most crucial steps on the path to a holistic customer experience and sustained business success.
Got any questions? You’re welcome to contact the IT experts at valantic!