It looks like everyone, more specifically, marketing professionals and executives, are suddenly discussing customer data platforms (CDPs) nowadays. CDP plays an important role in industries by helping them to better understand and act on data.
CDP says to marketers, you are not alone!
Google searches for CDPs have increased in the past few years as enterprises are taking an interest in the topic. It is a bit unsurprising that CDPs are on the verge of moving from a “nice-to-have” technology to a “need-to-have.” For instance, IBM estimated that insufficient data costs the US about USD 3 trillion each year. Moreover, bad data caused Delta to cancel its more than a hundred flights last year and cost the company about USD 150 million.
If you think I am wrong, you can check your email inbox right away, and I am sure that you will find a number of emails that call you by the wrong name, asking you to purchase something that you already have, or that email was clearly for someone else.
Therefore, enterprises are investing in enhanced software that gives them a unified customer record. For instance, Gartner placed CDPs at the peak of “inflated expectations.” This simply means that the CDP consumers are expecting more from this technology than it’s actually capable.
Before starting with trends, it is equally important to know the basics. Once we are on the same page, everything will make a lot more sense.
But what really is CDP?
It is a marketer-managed technology that unifies different offline and online data sources to produce a single customer view.
As per the CDP Institute, “Customer Data Platform (CDP) is packaged software that creates a persistent, unified customer database that is accessible to other systems.”
The definition simply means CDP can help you with one or ideally all of the below:
- Data collection – is the process of collecting consumer data from various sources.
- Data processing and consolidation – combines collected data to produce unified profiles of your consumers.
- Data activation and execution – to enhance your consumer experience.
For instance, Segment uses CDP to process about 500 billion events every month. In 2019, the total volume of events that consumers have chased through the Segment’s CDP increased by about 60%.
Why does CDP exist?
Data proliferation has created the need for industries to rethink their customer data management strategy. CDP exists for two primary reasons:
- CDPs support the go-to-market teams to produce advanced consumer experiences.
- CDPs break down data silos to create a single customer view.
What are the significant characteristics of CDP?
CDP functionality may fluctuate between different vendors; several core characteristics are:
- Data synchronization and syndication
- Data ingestion
- Real-time segmentation
- Identity resolution
- Data processing
What CDP can do for your business?
CDPs can offer numerous benefits. The major includes:
- Data mining and reporting
- 3600 customer view
- Targeted social campaigns
- Better segmentation and targeting
- Web personalization
- Ad optimization
Now you might be thinking that why does it exist in the first place? Isn’t my marketing stack already complicated enough?!
For that reason, let’s take a sneak peek at four trends that led to rise of CDP –
Trend 1: Unfulfilled requirements for single customer view
Various technologies in the market make claims of fulfilling consumer’s demands. But none of these tech options actually think of the customer journey. Instead, they offer a partial view or one or two dimensions of the customer journey.
Organic Chief Technology Officer (CTO) Sean Brown best utters this gap during an interview:
“The idea that you have one view of the customer and you have all of the data about the customer in one place and available to all of those platforms simultaneously and in real-time is still far away for most of our clients. Frankly, it’s still a way out for the technology capabilities that are out there today.”
But with CDP, achieving this single customer view is realistic; however, it’s how countless enterprises can provide individualized and personalized marketing messaging that converts forecasts and earlier consumers in real-time. For instance, as per the Gartner survey, “In 2019, about 52% of enterprises invested in the customer journey and consumer needs analysis.”
Trend 2: Enterprise foundation service-based architecture model
Enterprises must focus on consumer journey orchestration and decisions, consumer data and segments, operational hubs, and omnichannel content platform. Thus, CDP demands more consideration in the context of the wider environment.
Trend 3: Data commoditization and enclosed gardens
As the data pool is getting bigger, the ability to differentiate your brand is getting harder. For instance, Benjamin Bloom, an analyst at Gartner, states in his “Control Your Marketing Data” report that “marketers remain increasingly reliant on marketing and advertising opportunities powered by the big walled gardens.”
Trend 4: Rapid expansion of CDP use cases
This was trending in 2019 and continues to be a trend in 2020 as well. Several use cases such as digital advertising, customer data management, omnichannel aggregation, behavioral and predictive analysis, Business-to-Business (B2B) marketplace support, outbound marketing campaign, and e-commerce optimization helps in vendor evaluation. CDP also plays an essential role in several enterprise advertising campaigns.
All these trends will continue to lead B2C (Business-to-Consumer) and B2B brands and other enterprises to turn their attention to CDPs.
Uber, Amazon, Facebook, and Google are already using CDP to deliver personalized experiences at scale—from personalized commerce to personalized transportation and hospitality.
If you have already adopted CDP, you are on the right path because it is the newest and hottest piece of marketing technology. The term is getting so much buzz because of the rising number of new entrants in the industry.
With the onset of CDP technology, enterprises are able to position themselves entirely around the client using their own data. Using “3600 customer view,” CDP offers sales and marketing teams the operational agility to boost industry revenue and advanced campaigns.
So, after reading the above information, we can say that it’s not surprising that the CDP market is booming in times of digital marketing.
As per the CDP Institute report, the CDP market is expected to account for about USD 1.3 billion overall industry revenue in 2020, after having reached USD 1 billion in 2019.