4 Factors That Can Help You Choose the Right Customer Data Platform
Recent data found that through the first half of 2019, the customer data platform (CDP) industry added 19 new vendors and was on pace to eclipse $1 billion in revenue through the calendar year. This brings the total CDP vendor count to 96.
Having a range of choices does not make it any easier for a marketer to select the right capabilities, nor does it promise better results. The key is finding the right CDP that can best drive ROI.
What Will a CDP Do for You?
For CDP buyers in 2020, this means they will need to identify their individual business needs and then determine which solution will best drive the results they are looking for.
Once the business need is established, buyers should rank CDPs based on their ability to drive key use cases and corresponding metrics. These may include revenue growth, cost reduction, or other measures of effectiveness and differentiation.
To narrow down the market of CDP vendors, the CDP Institute bestows a ‘RealCDP’ distinction on 44 vendors that meet five specific qualifications: ingests data from all sources, retains full detail of all ingested data, stores the ingested data as long as the user wants, converts the data into unified customer profiles, and makes the profiles available to all external systems. These qualifications serve as the foundation for achieving real-time customer engagement.
Added Features: Dig Deeper
In addition to the above prerequisites, marketers should outline which experiences they want to deliver to remain competitive, now and into the future. For example, do you want more timely communications to be in sync with shortened delivery time windows? Do you want to tailor messages for partially abandoned cart items? Do you want offers that are relevant to a consumer’s real-time context? For these and other innovative experiences to be in line with consumer expectations, the following capabilities are key when evaluating CDPs.
1. Dynamic application of customer data
Perhaps the most important consideration when evaluating CDPs is that the functions listed above can be performed dynamically. A solution can ingest, retain, store, and convert data and also make it available to external systems—but if done statically, it will not keep pace with a dynamic and constantly shifting customer journey.
2. Data enrichment for deeper insights
An enterprise-grade CDP should offer a broad set of data enrichment capabilities. Data ingestion is a core requirement of a CDP, but data enrichment is needed to improve the quality and depth of data. This adds additional layers of detail to first-party data, providing the deep understanding that is critical to delivering a more personalized customer experience.
3. Advanced identity resolution
Identity resolution—the foundation for an accurate customer profile—is another key variable when evaluating a CDP. Given the complexity of underlying data, both probabilistic and deterministic matching are needed. Advanced identity resolution requires understanding, tracking, and connecting the complete range of identity elements—offline and online, anonymous and identified, shared and individual—to build identities in the context of households, organizations, and changing preferences.
4. Creation of a golden record
Finally, a CDP must have the tools required to convert data into a comprehensive and accessible golden record of each customer. This includes managing normalization, validation, and transformation of data from structured and unstructured sources along with identity graphs. The golden record must be accessible in real time so all enterprise touchpoints can use it to create personalized engagement.
Not Just Another Solution for the Martech Stack
Evaluation should begin with an understanding that a CDP is not just another martech solution, but rather an enterprise tool that can significantly improve business processes and help organizations achieve real-time, hyper-personalized customer engagement that drives revenue. Accordingly, CDPs should offer connectivity to all enterprise sources of customer data and should not be limited to just martech or channel operations.
An investment in a CDP is a major decision, but with the above guidelines in mind, businesses can successfully operate at the speed of the customer and meet (or exceed) business goals for 2020.
John Nash is chief marketing and strategy officer at Redpoint Global. He has spent his career helping businesses grow revenue through the application of advanced technologies, analytics, and business model innovations. At Redpoint Global, Nash is responsible for developing new markets, launching new solutions, building brand awareness, generating pipeline growth, and advancing thought leadership.