marketing manager sharing with CIO big picture plan for new customer data platform
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You’re convinced it’s time to make a Customer Data Platform (CDP) the smart hub of your martech stack. But now, it’s time to convince your organization’s Chief Information Officer (CIO), or another C-level executive who controls the budget. Where do you start?

Here are five typical arguments against investing in a CDP that you might encounter — and how you can convincingly respond.

1. 'We Don’t Need Another Customer Database'

The average enterprise uses 91 marketing cloud services, according to Mary Meeker’s 2017 Internet Trends report. Often, these services, such as Customer Relationship Management (CRM) platforms, have their own databases, too. So adding yet another customer database, on the surface, may seem superfluous.

But a CDP isn’t about storing data. It’s about unifying customer data from your various silos, creating individual customer profiles based on real-time behaviors, and offering the machine-learning insights that allow you to deliver the right content to individuals via your downstream martech tools.

The key point is that a CDP doesn’t simply store your customer data; a CDP makes that data actionable.

As a marketer, you’re trying to interpret behaviors and actions your customers take into usable, relevant facts. If a consumer takes an action, a CDP with machine learning gains insights into the customer from their actions and pushes what it’s learned to your downstream marketing tools.

With a CDP, the goal is not so much to create a system of record or of reporting. It’s to facilitate real-time action and engagement leveraging your customer data. It’s about creating experiences at scale and delivering what your customers care about most, however they prefer to engage with you.

Related Article: Solving the Challenges of Fractured Customer Identities

2. 'A CDP is Yet One More Expense'

Yes, a CDP is an additional software investment. And all companies are — or should be — cost-conscious.

However, the more important consideration is, what’s the return you’re getting from your investments?

CDPs give you access to unified customer profiles updated in real-time that you wouldn’t otherwise have. In turn, this lets you tap into the hidden value of your customer data and do things you couldn’t do before.

For example, a large rental car company generated millions in revenues it wouldn’t have earned without a CDP. The company was able to listen across more channels of customer engagement in real-time than ever before to better understand its customers. As a result, the company’s marketers could determine the right thing to communicate to encourage its website users to complete their online reservations, when those users were in a car-renting mindset.

Similarly, a major Consumer Packaged Goods manufacturer leveraged all of its onsite user behavioral data to more precisely target Facebook users. As a result, the company reduced its ad spending by 1/10th and significantly multiplied the volume of consumers it could reach.

Related Article: 5 Reasons to Make a Customer Data Platform the Hub of Your Martech Stack

3. 'A CDP Requires Reshuffling the Entire Martech Stack'

Ideally, a CDP solution serves as the smart hub of your martech stack, while your other tools act as the spokes, an approach that Gartner, Digital Clarity Group and other analysts have advocated.

This could require you to reshuffle your martech stack. But in reality, most organizations are already doing that on a regular basis. They’re constantly re-evaluating their martech tool set, testing new offerings and phasing out unneeded tools. With so many new tools becoming available, why wouldn’t you to test new products and re-evaluate your stack?

The goal shouldn’t be to reach a point of stasis, where nothing changes. The goal should be to always use the best available tools for your organization’s specific marketing needs. Therefore, flux, not stasis, is more the desired state.

Also, CDPs integrate with a wide variety of downstream martech tools. Their connectors take a lot of the work and pain out of adding new tools while giving you the flexibility to try new solutions as they become available or your needs change.

Related Article: How a Customer Data Platform Helps With GDPR and Other Privacy Regulations

4. 'A CDP is Difficult to Integrate into a Martech Stack'

This one’s a non-issue. From a technology standpoint, martech tools can be integrated with a CDP with a few mouse clicks.

But when a CDP is added to your martech stack, it can surface problems you didn't know you had. For example, in the process of unifying customer profiles with your CDP, you may discover that two email addresses actually belong to the same user. So should you send that user two emails or one? What should your policy be in this case? What do you need to do to ensure that user gets the best customer experience, regardless of how many email addresses you have of theirs on file?

In this case, the CDP didn’t create the problem. Instead, it brought the problem to your attention and allows you to choose what you want to do about it.

5. 'CDPs are New and Unproven'

As marketing software goes, CDPs are relatively new. In 2013, Raab Associates, Inc., a martech consultancy, defined CDPs as a category.

But in the years since, CDPs have proven themselves as an important tool — the smart hub, in fact—for a growing number of digital marketers. Consider sharing these CDP proof points with your CIO:

* CDPs have their own institute.

If CDPs were a fly-by-night, flash-in-the-pan fad, they wouldn’t have their own industry organization. Raab Associates manages the Customer Data Platform Institute (CDPI), a respected organization that publishes CDP educational materials, industry news, best practices, and a directory of vendors.

* The CDP industry is growing.

CDPs are poised for explosive growth in the next few years.

The CDP industry earned more than $300 million in revenues in 2016 and is expected to reach more than $1 billion in revenues by 2019, according to CDPI research. In the first half of 2018 alone, the CDP industry added 11 new vendors and $114 million in new funding, also according to CDPI (in a free downloadable PDF report).

* CDPs are seen as the foundation of future marketing.

Research firm Gartner recently published a market guide for CDPs (Gartner account required), which shows that CDPs have become important enough to warrant their own market guide. Gartner maintains that CDPs solve “an acute need for modern marketers” by providing a complete view of the customer beyond the acquisition stage.

Many organizations have already recognized the value of CDPs and adopted them, according to David Raab, principal for Raab & Associates and the CDPI’s chief executive. “There’s no doubt that the industry’s momentum will grow as the benefits of CDPs become more widely understood,” David Raab's comments on CDP adoption.

Noted martech expert Scott Brinker told CMSWire: "To me, CDPs are the data layer for a digital marketing hub. That's enormously helpful for coordinating multiple technologies across a best-of-breed stack. And pretty much every company of any real scale has a best-of-breed stack.”

As Forbes put it: “Customer data platforms are the foundation of the emerging, digitally savvy marketing organization that not only has that 360-degree view of customers but also actively engages with customers across the channels of their choice.”

The Key Takeaways for Your CIO

So how do you summarize CDP’s importance to your CIO?

For digital marketers in 2018 and beyond, it’s not about how many tools are in your martech stack, how much those tools cost, or even how much data you’ve collected about your customers.

It’s about the actions that your customer data enables you to take, and the hidden value of that data you can unlock. It’s about having a single, unified view of your customers that, when combined with machine learning, enables you to understand what your customers wanted from you in the past — and what they’re likely to want from you in the future. It’s about having real-time information and answers about your customers that flow downstream to the martech tools integrated with your CDP. And in the age of GDPR, it’s about knowing where your customer data comes from, where it resides, and how to quickly modify or delete it if a customer demands it.

The ideal CDP can do all that — and more.

Part of a 4 part sponsored article series from Lytics, an organization that helps enterprises automate personalized marketing experiences through the industry’s most advanced Customer Data Platform (CDP).