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PHOTO: Andrea Tummons

Customer data platform (CDP) technology is rising in popularity for good reason: CDPs try to address chronic difficulties marketers have endured around obtaining reliable access to a centralized store of information about their customers and prospects.

The CDP technology marketplace has expanded substantially. At Real Story Group, we evaluate 25 players, with more each quarter. This expansion is partly because large enterprise vendors (e.g., Adobe, IBM, Oracle, Salesforce) have arrived late to the party, and partly because initial barriers to entry remain relatively low. Just remember that building a comprehensive CDP offering with suitable connectors and marketer-friendly segmentation and activation interfaces takes years, not quarters.

Value of CDP Independence

One of the key questions facing enterprise CDP customers today is whether to purchase the technology separately, or as part of a larger, more complex commitment. This is not a new dilemma in world of digital engagement, and as always the answer is, it depends.

Just remember that a core value proposition for CDPs comes from decoupling data from engagement and management systems. So I do have one specific piece of advice: avoid getting bound vertically to a bundled stack of services that mitigates against the value of your customer data living independently.

This advice has become increasingly urgent because a slew of vendors in adjacent markets are adding CDP-like services to their platforms — and then in some cases productizing them as distinct offerings.

Related Article: What Can You Do With a Customer Data Platform?

Look, It's a CDP!

Here's a short tour of other vendor segments incorporating customer data platform services into their incumbent environments, and why you should remain skeptical of each.

DMPs

Data management platform vendors host shared, third-party (i.e., anonymized) data among customers, mostly to support things like direct mail marketing or advertising. Some are building first-party (PII) data as custom, and customer-specific, extensions to their platforms. This is likely not a core competency and you'll want to make sure they have suitable controls in place.

Data aggregators and enrichment vendors

There are a lot of these vendors ... I mean a lot. They help enhance your customer information by enriching it with other known data about those individuals, like shopping history, creditworthiness, social signals, co-workers and much, much more. These suppliers want to have a single place to attach their data to, and when it doesn't exist, they might just offer you one. 

These vendors have the same problem as above: it's not their core competency. Don't buy the car because of the roof rack. (Also, do you want these vendors hosting your PII? Probably not.)

CRM Vendors

This is an interesting alternative because historically, CRM and salesforce automation platforms often served as a default customer data store, especially in B2B enterprises. There are at least three big problems with this:

  1. They're usually pretty bad at data management.
  2. They tend to just have customer and lead data and nothing on prequalified prospects.
  3. They don't scale well for B2C volumes and extended data models.

Journey Orchestration Engines

At RSG we're seeing JOE vendors slowly offer CDP services, though typically as an optional add-on. You can understand why: in order to direct traffic among diverse engagement environments, you need to have an authoritative store of information about the customer embarking on the journey. These add-ons can become problematic, however, particularly since your CDP will need to serve many systems, and not just your JOE.

MAP/ESPs

This is an intriguing alternative because historically, many enterprises maintained their "digital marketing databases" in their marketing automation platform (MAP) or email service provider (ESP), since that's where they ran outbound campaigns.

The problem, of course, is that this approach tended to lock that data into a particular engagement channel (messaging), and like CRMs, MAPs are not very good at holistic data management. Many early CDP buyers cited getting out of this prison as a primary motivation for adoption. Some people do in fact like to go back to jail. But you're not one of them.

WCM/Portal/DX Platforms

Some big-time web content and experience management (WCM) vendors and other wannabe DXPs are starting to create persistent customer data stores, partly to simplify their personalization efforts, and partly to charge you for yet another module. Don't do this. It's a bad idea. See MAP above.

Related Article: Customer Data Platforms: A Contrarian's View

Don't (Always) Blame Vendors

Let's acknowledge that sometimes the devil is us: Vendors respond to customer requests and the reality is many different stakeholders across your enterprise need a CDP, and some of the vendors they partner with will try to scratch that itch. This is a time for leadership — stepping up to the governance plate and creating an enterprise-wide CDP solution.

The good news is you have many bonafide CDP choices. It's a fragmented marketplace, but the key players are well-funded.

Related Article: Customer Data Platforms: The Truth Behind the Hype

CDP Overreach?

Of course, you should also avoid the reverse problem: asking your customer data platform to do more than it should. CDP vendors themselves are expanding, and the potential use case set is already quite wide, from aggregating and managing data to supporting engagement services to actually activating them. If the purpose of getting a CDP is to "liberate" your customer data from restricted silos, then by the same logic, don't weigh down your customer data platform with a variety of extraneous services.