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Marketers are always looking for better ways to deliver personalized digital experiences using new technologies. That’s because 85% of marketers have said their customers expect personalized experiences, yet only 16% of marketing teams are satisfied with their personalization marketing efforts. 

Many marketing teams, therefore, are turning to customer data platforms (CDPs) to aggregate vast amounts of customer data and enable them to deliver their hyper-personalization strategies. But is a CDP really necessary for hyper-personalization?

With this in mind, we’ve spoken with experts to learn whether these systems are useful for hyper-personalization, and alternatives to a CDP that organizations can consider.

Can a CDP Improve Personalized Experiences?

Andy Zimmerman, CMO at Evergage, says the term hyper-personalization is often used to describe personalization delivered to micro-segments — almost down to the individual level. “A CDP is very useful for this,” he continued, “with the ability to analyze and segment vast amounts of customer and prospect data, and pass this data to other systems for analysis and action — such as personalizing experiences for specific groups of people.”

“When it comes to personalization,” added Greg Cypes, head of product at Zaius, “more data is better, and the more programmatically a brand can uncover relationships among different customer data points, the more efficiently that brand can execute on them.” That’s why a CDP is valuable as a hub for customer data that unifies disparate systems and leverages data that otherwise would have been siloed. “As such,” continued Cypes, “the value the CDP brings to personalization is in surfacing the interactions between data that is normally kept in isolation, and then allowing the brand to act on that information in a consistent and measurable way.”

While the CDP is useful for data aggregation, Zimmerman believes companies can face challenges if that’s all it does. “Not all CDPs are created equal,” he warned, “and some CDPs can go a step further.” Many CDPs, for example, only handle the data aggregation and hand off the data to another solution for the personalization itself — and this can be slow or inefficient. That’s why Zimmerman recommends looking for a CDP with a personalization engine together. “This type of CDP aggregates deep behavioral data from an individual’s current session, historical data and attribute data,” he explained, “and can activate all of it instantaneously — delivering relevant content, offers, emails and experiences that map to someone’s interests and in-the-moment intent.” 

Related Article: CDP vs. DMP: Which is Right for Your Business?

Why the CDP Isn’t Everything

“The modern CDP isn’t a new idea — companies have been collecting and centralizing customer data for years,” explained Mark Smith, president of Kitewheel, “and the presence or absence of a CDP isn’t what is holding up hyper-personalization efforts.” While a CDP can be useful, it’s not the only way to organize customer data and deliver it to the systems that need it. And in most cases, the real obstacle to hyper-personalization isn’t data aggregation, but the actual execution of personalization itself.

“Even personalization engines that aren’t also CDPs are valuable at collecting data and using that data to drive personalized experiences,” Zimmerman stated. He says that these systems aren’t always ideal because they often rely on temporary data instead of unified customer profiles drawn from a wide array of systems. This can result in delayed or inaccurate personalization attempts that frustrate the customer. “On the other hand, when there is one system that can aggregate and synthesize customer data from all your different sources, store it in unique, actionable profiles, and respond in-the-moment with 1-to-1 personalized experiences, you can avoid the costly risk of time delays and potential inaccuracies.”

Smith believes actual personalization requires more than accessible customer data. “Personalization is achieved through business rules and logic,” he continued. Even if the CDP promises to organize and segment customer data, you still need to actually execute personalization by customizing websites, emails and more. Instead of a CDP, “brands should look at federated data models that allow them to leave their data exactly where it is while implementing journey management and orchestration practices to truly deliver personalized experiences to every user, every time,” said Smith. As long as the data is accessible, therefore, it’s not necessary to centralize it to execute a personalization strategy.

Conclusion

“Access to each data system, a curious mind, and a lot of time can uncover many insights that lead to marketing personalization,” Cypes said, but it’s not an efficient approach. 

Zimmerman concluded, “A CDP isn’t, strictly speaking, necessary to accomplish a goal of personalization.” It does, however, make the process of aggregating and analyzing data much easier. In the end, most of the experts agree that a CDP is useful for organizing customer data, but ultimately personalization still requires a lot of additional effort to actually execute upon.