Customer data platforms – they’re so hot right now. With increased attention and research from Gartner in recent months, marketers want to know whether CDPs are the answer to a classic marketing question: “I want to design and orchestrate experiences across tools and channels, but how do actually I accomplish this?” To help marketers answer this question, last winter also marked the launch of the Customer Data Platform Institute. I did a hot take of this research back in December, but the buzz about CDPs continues into 2017 with fresh excitement and perspectives.
But not all CDPs are the same. In fact, many of the vendors now claiming to be CDPs are approaching the category with only a fraction of the necessary capabilities. Most CDPs are straddling multiple market categories (e.g., CDPs rooted in tag management, CDPs rooted in web personalization, etc.), and their bias toward these external categories inherently limits their CDP feature set. You can’t serve two masters.
What features should be requirements of a CDP? For enterprise omni-channel B2C marketers, there are six clear capabilities that must be present in order for a CDP to be fully effective. These marketers should thoroughly examine how exactly CDP vendors provide the following capabilities:
- Data quality and identity resolution. A CDP should offer comprehensive data cleansing, deduping, standardizing, and enhancing of omni-channel customer data profiles. The profiles should be updated continuously and should be accessible for every type of customer campaign and engagement. Some CDPs do not offer any data quality features, and others have only very limited data quality capabilities. When choosing a CDP, marketers should insist on only the highest standards of data quality and identity resolution.
- Complete inclusiveness of online and offline data. For omni-channel B2C brands, customer data spans several digital and physical channels. For example, in-store workshops, community events, call center experiences, in-store browsing or purchasing, as well as digital engagement across the website, email, mobile, and social channels—all contribute to a customer’s identity, and any and all of these experiences and more should be encompassed by a CDP. But some CDPs specialize on digital-only data, or they give lip service to physical channels but are limited to just some aspects of physical-driven data, such as POS transactions or call center logs. A true CDP should be able to integrate all, literally ALL, customer data sources into a clean system of record with a single customer profile that can be used for actionable marketing and engagement. Here is a great example of athletic apparel retailer lululemon doing just this.
- Machine learning and predictive models. Integrating customer data is one thing, but making customer data actionable and intelligently enabling engagement is another. A CDP should be a configurable intelligence layer that marketers can apply across their engagement ecosystems. Some CDPs do not add any intelligence to their integrated customer data, or offer only crude segment calculations or rules to inform customer engagement. An enterprise CDP should include advanced machine learning to power genuine 1:1 relationships with greater lifetime value – as demonstrated by fashion retailer Lilly Pulitzer in their approach to marketing to millennial.
- Robust reporting. Marketers should be able to drill into customer data both at the single profile level and in aggregate across all customers and segments. An enterprise CDP needs to provide customer data reporting and analysis so marketers can understand customer patterns, behaviors, and how to most effectively create segments for campaigns. But many CDPs offer very limited or no reporting and analytics, making it difficult for data-driven marketers to understand how to most effectively reach and engage their audiences. Marketers should choose a CDP with comprehensive built-in reporting and customer analytics.
- Data actionability. A CDP is only helpful if a marketer can actually use it to power customer engagement. Unfortunately, many CDPs focus on data integration but drop the ball on how to make the data actionable across marketing campaigns. And keeping data continuously updated to fuel marketing campaigns in real-time? Most CDPs don’t even attempt this. When evaluating CDPs, marketers should consider their use cases, and thoroughly understand how a CDP can meet their needs—not just for the use cases configured during implementation, but over time as needs change. A CDP should enable marketing agility, future-proof against changes, and make data-driven marketing a straightforward reality.
- Configurability across the entire platform. A SaaS platform-based approach to customer data and engagement provides marketing agility and flexibility. But some platforms only allow limited customization. A truly configurable, agile platform future-proofs the business, supports changing environments, and meets evolving brand needs and requirements. Each brand has its own way to identify, segment, and engage with customers. Marketers should seek customer data platforms that are configurable to specific needs end-to-end. Otherwise, the platform must be supplemented with other solutions, which negates the agile promise of a CDP.
Not all CDPs are created equal. As the category continues to mature, enterprise marketers should fully understand their expectations, their needs, and ask the right questions from CDP vendors in order to separate the wheat from the chafe. I believe 2017 will be a year of huge growth for Customer Data Platforms, and some vendors will help propel the category while others will fall away. It’s up to the marketer to make sure they don’t get caught up in the hype. If you choose your CDP wisely, you’ll reap the benefits through the entire lifetime of your business.