The Reality Behind the Hype: Customer Data Platforms
When Gartner calls a new technology an “innovation trigger” and marketing leaders agree, a real buzz is created. This is the current state of the Customer Data Platform (CDP) market which promises to make it easy (finally!) to get all that customer information in one place.
But do CDPs live up to their promise?
CRM has been saying for years that it provides a single, 360 degree client view, but that was before the potential number of touch points for customers exploded. We all know that keeping customer information cohesive and readily accessible can be a tremendous challenge these days.
But this is not from a lack of trying. To a greater or lesser extent, marketing automation systems help unify customer data collation, especially where there are tight links to CRM. But marketing automation, like many other approaches, can be more of a data shuffle than a common data pool, and can also lead to data ownership and control issues.
As a result, customer data continues to be spread across many systems and bringing it together is often costly, slow and plain hard work. And this is a problem. Without true consolidation marketing is hobbled; analysis is limited, marketing initiatives are constrained, and crucial touch points can remain out of reach.
As for that 360 view and totally personalized marketing approach? Let’s just say that people have been known to fake it.
Enter CDPs. Unlike other attempts to unify customer data, the CDP provides a single, shared pool of data that is accessible to other systems and is characterized by certain attributes.
- It comprises a single database of all information for every customer, whether from an internal or external source, and each piece of data for any particular customer has a consistent and unique identifier.
- The database is designed to be managed by marketers giving them timely and complete control over campaign management, data analysis and business intelligence.
In today’s marketing world the talk is about total customer engagement, client “journeys”, and personalized, responsive interactions across a wide (and growing) range of access points. So being able to quickly, easily and intelligently access all data for a customer is a kind of nirvana. There is definitely a desire for what CDPs aim to provide, but do they deliver?
At this point I’m reminded of Hector Barbossa from Pirates of the Caribbean when he tells Elizabeth Swann that the pirate code is “… more what you’d call “guidelines” than actual rules.” Many different applications say they incorporate a CDP, from marketing automation and campaign platforms to tag management platforms, and some companies actually describe themselves as CDP providers. Without a clear test, however, it can be difficult to ascertain whether providers are delivering a CDP. Like the pirates, we don’t yet have firm rules.
This is set to change with the recent launch of the Customer Data Platform Institute headed by David Raab, a highly respected technology analyst who came up with the idea of a Customer Data Platform in 2013.
The objective of the Institute is to promote the CPD and provide resources for collaboration, education and interaction between interested parties. Although this field is still young and relatively small ($300 million in revenues last year versus, for instance, $32 billion for CRM), it is growing at a healthy 50% per annum. The introduction of this new Institute may well provide the impetus for even faster growth.
Coming from a company that specializes in data movement, I am always interested in systems that may require integration. With a key attribute of CDPs being open access, InaPlex may well have tools and expertise that complement this technology. Who knows, the CDP Institute may even promote agreement on a standard API to further enhance CDP accessibility. At InaPlex we’ll also be looking at how CDPs compare with solutions built around open platforms such as Microsoft’s Common Data Service, and we’ll continue to watch CDP development with interest.
If you’d like to learn more, here a some excellent sources of information: an overview by Barry Levine, Gartner’s perspective (if you have an account), Josh Manion on CDPs in marketing, Paul Greenberg interviewing David Raab, and the CDP Institute’s web site.
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Thanks for reading!