Are you ready for a CDP?
Buying the newest and coolest products in the market seems like something that individuals do, but does this trend carry over into the corporate world for corporations?
“The global CDP market size is projected to grow from $5.1 billion in 2023 and $7.4 billion in 2024 to $28.2 billion by 2028…” – MarketsandMarkets
I read the above quote, and think of how many people feel “fomo” and the need to start down the path, investigate and eventually address investing in a Customer Data Platform (CDP). This should be a self-reflection moment for decision makers to really mull over. The need is not the same for all companies. The decision relies on factors like data, people and customer operations.
For leadership, rather than assessing a CDP, focus on whether the customer experience will benefit from a CDP in your organization or if you have the same components delivering the same value.
Do I already have a CDP and not know it?
Here is a quick summary about what a CPD is:
- Average cost for a platform: $100,000 - $300,000 annually
- Some reasons to implement:
- Centralize data for marketing
- Real time data processing
- Has integrations with most capabilities
- Improve personalization
- Help implement data minimization practices
- Meet compliance requirements, including consent management and data minimization
- Consistent application of data retention policies
At the core, a CDP uses multiple channels like email, SMS, and marketing platforms (including Google, TikTok, Amazon, LinkedIn, Meta) to communicate content in journeys that can be arranged to handle different paths a customer will take, and providing an experience for designated journeys, all while honouring the customer’s consent preferences. An example is when someone receives an email to purchase, begins but abandons the experience, and then gets an email reminder to continue the purchase and also sees ads for the same brand with deals on shipping. Some CDPs handle consent management and real time consumer interactions. A core benefit is creating great experiences that align with the customer’s consent preferences.
“76 per cent of customers would go out of their way to do business with a company that has better customer service, and 86 per cent of customers would switch to a competing brand if they provided a better customer experience…” – Shep Hyken's 2023 ACA study
Self-reflection
Some companies have separately and successfully set up email, SMS, and marketing platforms. Ideally, all of these channels and the campaigns or services they support would all work together harmoniously, feeding off each other's interactions, producing a great experience for consumers. This is a utopian state, meaning you achieve better experiences and continue to build on these capabilities for consumers. If this utopia has been achieved, you have CDP and possibly didn’t know it. Continue your efforts.
If you have not achieved channel performance and need a solution, a CDP is one step forward. This will activate multiple channels and start a collective of customer profiles that can be leveraged as journeys. But before you do that, you must consider the biggest prerequisite: Data.
Data readiness
Data needs to sync with all channels (respecting the customer’s consent), and needs to be readily available to action at the right time.
Consider whether consent syncs in all channels. Meaning, if you opt out in email, will it persist in SMS or marketing platforms within a reasonable time? Do you centralize your consumer profiles so that changes to contact information or consent updates in all channels?
Enter a CDP, which manages profiles, creates a place for consent to live, and a platform that creates journeys or experiences for consumers at the right moment. Also known as identity resolution, it enables a consumer's profile to be active in more than one channel. Remember, CDP is not just email. It is not a complete solution, but for the channels, it can manage and handle the data centrally and have it work in sync.
Let’s circle back to consent. Remember that the CDP profile and consent needs to sync with the rest of the data not in the CDP. A CDP is not where you want highly sensitive customer data to exist, but at the same time, you want to be able to analyze all data together (in accordance with legal requirements and the customer’s consent preferences) – profiled and up-to-date. Enter a data warehouse – a place where the CDP can update the customer data enterprise-wide, creating an environment that protects data from misuse and has the ability to analyze all the company’s data together in a robust environment for analysts to take action in marketing or other parts of the customer journey.
After all that, is the quality of your data good? This is like “admitting you have a problem is the first step to fixing it.” Poor data leads to poor experiences. Data silos can hinder progress, in addition to issues with ownership and politics at a leadership level.
Operational needs
Now that you have addressed that data is the biggest prerequisite to a CDP, let's talk about whether you have the right operations for a CDP.
There are three types of teams you need for a CDP:
- Owners of the platform,
- People who will set up and get data into the CDP, and
- People to execute the journeys.
Before you had people who managed email, SMS, and marketing platforms all separately, but now you need an all-in-one team. This will require planning when in the transition phase. The recommended course of action is to repurpose, retrain and hire.
I also like the new “agile pod” concept married with a “hub and spoke” model to help address how a CDP can be rolled out operationally. Agile brings the right groups together while hub and spoke keeps them in line with department guidelines to reduce risk, while progressing with speed and agility.
Remember your partners and agencies along the way. Passing off first-party lists to them means they need to be involved in agile planning for media and marketing initiatives. For other parts of a customer journey like service, contact centre, or other customer relations, that requires more partners internally to coordinate.
Leadership support
Top-down goals are a must. If you are a key decision maker for a CDP, this will only get you traction in your world of customer journeys. For silos to be broken and departments to make journeys a goal, it’s important to settle the politics and power struggles that exist whenever the next "cool thing" is desired. Leadership must take this seriously, since this is a larger legacy issue. A tip for leadership is to get your teams to work together and cascade down the priority, because if they don’t, you won’t achieve a great experience any time soon.
Are you ready?
Do not get caught up in all the hype of a CDP unless you feel it will help you achieve channel unity and better manage consumers’ journeys, aligned with their consent preferences.
Make sure your experiences can be coordinated together to build better experiences. This tends to be best served in an agile type of structure because of all the moving parts with internal and external partners. Ahead of all that, data is a foundational requirement. Not having an ID resolution or profile set for multiple channels limits a CDP, so until then, you are not ready to adopt a CDP.
A CDP can transform customer experience—but only if your data, operations, and leadership are ready. Start with an honest audit of your foundations – data, people, or operations – but make sure leadership support is there to break down barriers and fix relationships that hinder progress.
Below are some questions to ask as you go down the path.
So, are you ready?
