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Which Flavor of Customer Data Platform Is Right for You?

4 minute read
Dom Nicastro avatar
Customer data platforms (CDPs) come in many different flavors, but knowing which one is right for your business may be a challenge.

Most agree that customer data platforms (CDPs) come in different flavors. The trick is picking the right flavor for your organization and marketing team. “Not all CDPs are alike,” Omdia researcher Mila D'Antonio wrote in her report, 2019 Ovum Market Radar: Customer Data Platforms. “Some concentrate on data ingestion, some on data management and journey mapping, and others on orchestration or engagement.”

What’s the one thing they must all do, according to D’Antonio? Manage the scale of customer experience data expanding from new sources such as the Internet of Things (IoT) and connected devices rather than just website clicks and transactional histories, she wrote in the report. “CDP vendors must also have the capabilities to analyze these expanding data sets in real-time to enable relevant interactions and proactive engagements.”

So which flavor are you picking? Let’s look at the choices.

The Different Types of CDPs

David Raab, founder of the CDP Institute, reported last year he saw a very distinct split in the CDP market between companies that focus on data assembly and those that focus on activation. In its report in January, CDP Institute grouped CDP vendors into four categories based on the functions provided by their systems:

  • Data: Gather customer data from source systems, link data to customer identities, store the results in a persistent database available to external systems. Often employ specialized technologies for data management and access.
  • Analytics: Provide data assembly plus analytical applications. Include customer segmentation and sometimes extend to machine learning, predictive modeling, revenue attribution and journey mapping. Often automate the distribution of segment lists to marketing automation or advanced analytics products.
  • Campaigns: Data assembly, analytics and customer treatments. Specify different treatments — personalized messages, outbound marketing campaigns, real time interactions, or product or content recommendations — for different individuals within a segment. 
  • Delivery: Data assembly, analytics, customer treatments and message delivery. Delivery is typically through email, website, CRM or several of these.

Related Article: What's Under the Hood of a Customer Data Platform?

Checking Against Unmet Needs

Regarding which type of CDP you may need, the answer depends on what you want to do and what’s stopping you from doing it, Raab told CMSWire. “If you have all the tools you need but lack unified, accessible data, then a Data CDP. If you have no data, analytics, or campaign engine, then you need a Campaign CDP.”

Answering which flavor of CDP you may need requires buyers to define their goals, define what’s needed to execute against those goals and then determine which of those needs are unmet by current systems.  

Raab provides a quick reference list:

Learning Opportunities

  • You need a Data CDP if…you can’t access a unified customer view.
  • You need an Analytics CDP if…you need more predictive models than you can currently create.
  • You need a Campaign CDP if…you can’t generate messages tailored to specific individuals.
  • You need a Delivery CDP if…you can’t deliver personalized messages in your desired channels.

Trends Within CDP Selection

Companies turn to CDPs for a variety of reasons, according to Dave Frankland, managing director at Winterberry Group. They may need to combine cross-channel data; enable omni-channel orchestration; enable non-technical or non-marketing colleagues to glean audience insights; use insights to inform real-time customer interactions; or gain data visibility and compliance. “The right type of CDP for any given organization,” he said, “should start with the company’s needs and use cases."

At the enterprise level, CDPs tend to specialize in solving for these business challenges, emphasizing data management, analytics or engagement use cases, Frankland added. “At the mid-market,” Frankland said, “we see more of a stack approach, with mid-market CDPs adding email and personalization capabilities to their data management and segmentation capabilities.”

Watch the market, he added. It matters. The current market environment should accelerate market maturity, Frankland added. “We don’t think that all of the firms that currently position themselves as CDPs will survive,” he said. “Some will continue to expand. Some will merge. But those that fail to deliver client value will be forced to dissolve.”

Related Article: How to Use a CDP to Engage Customers Outside the Realm of Marketing

CDPs Based on Verticals

It may also make sense to find which flavor of CDP you need based on your industry. Raab said he is seeing a rise in niche market CDPs. “We’re seeing many CDPs that are tailored to a specific industry such as financial services (NGDATA, Lemnisk), telecommunications (Meiro, Firefly), healthcare (Healthgrades, Symphony RM), travel (Boxever, OpenJawTech). “The advantages include prebuilt connectors to industry operational systems (e.g. ticketing for travel), industry-specific data models and system functions and industry-expert staff,” Raab said. “It's also a way to avoid head-to-head competition with existing leaders and big new entrants like Salesforce and Adobe.”