With the growth of data-powered marketing and the ever-greater importance placed on owned data, customer data platforms (CDPs) have become a key enabler of marketing success and business growth.
Not surprisingly, the martech industry has been quick to spot the sales potential here and we’ve seen a wave of CDP options hit the marketplace in recent years. While it’s always good to have choice, it’s become seriously confusing for marketers who just want to buy a CDP and get on with it.
You only have to look at the differing and conflicting reviews of the same platforms by the likes of Gartner and Forrester. And there is clearly no real consensus on the definition of a CDP. It’s a buzz term now, so just about every data management tool wants to call themselves a CDP, and bolt on more and more functionality.
But, with a little help from an expert partner, marketers can cut through the complexity. It’s all about asking the right questions to ensure you are making the best choice. Here are six questions that we tackle with our clients at Luxid so they can make truly informed decisions.
What challenges do you want the CDP to address?
Firstly, you have to assess what you want the CDP to do and what challenges you want it to address. CDPs devour data - and data requirements are use-case specific - so being laser focused on the operational use(s) is critical. And with so many different CDP categories, some platforms are strong in some of these uses, eg data management and analytics, and others are better in areas, such as integrations and orchestration. And beyond the definition of the challenge and identification of appropriate platforms, a base case for a CDP has to be built so that the company can evaluate the impact that technology onboarding will have on key areas such as data, content and channel activation. There’s a price tag with all of these - in terms of operative and change management costs - in addition to the expense of the technology license.
How will the CDP work with your other tech?
Next, marketers need to understand how the CDP platform will integrate and work with their other technologies. CDPs are designed to integrate with a host of other third-party platforms, so from a technical feasibility perspective, all should be good. But if the company has legacy or custom tools – or on-premises solutions - they will have to validate exactly what work integration will require in practice.
Where are the overlaps with your other tech?
And, as part of this type of assessment, it’s vital to understand where there may be overlapping features between tools. A company’s existing tech stack may have similar or the same features and capabilities as the CDP, at least on paper. For example, just about all activation tools have segmentation or segment-building features in them. But the depth of capability that tools offer differs significantly.
What processes do you need to move?
It’s essential to know the potential usage of the new capabilities a CDP will offer versus what can be achieved with existing tools. You can then decide which process need to be moved to work with the CDP and which can remain in other tools. This might open doors for mitigating license costs if the utilisation of some paid features of other existing tools are left unused.
Do you have the necessary skills in-house?
Once a marketer has worked through all this, they have to ask themselves whether they have the skillsets in-house to manage everything. Data literacy and data model understanding have become essential skill sets to have within operative teams simply to be able to leverage the full potential of CDPs. There is also an increasing requirement to understand the underlying business that the CDP is intended to serve.
What does all this mean for your marketing team?
And finally, a marketer has to understand how the introduction of a CDP will affect the processes and operations for the members of their marketing team. They will need to map out the operative process from planning to deployment, per channel - and define which tools are used for which parts of the workflow. New features and technical capabilities - especially in data management - a new user interface, and a new process to deploy operations from planning to go-live often creates skill gaps in marketing teams.
The benefits having a state-of-the art platform to manage your customer data are considerable. But good CDPs are not cheap and there are key technology and business ramifications when investing in this type of data platform. Don’t be blinded by all the sales talk. And consider all the issues before parting with your cash.
If you would like to chat with a martech expert at Luxid, who really knows what they're talking about - and can take all the pain out of choosing a CDP - then contact us here.
