How to choose the right customer data platform

27 January, 2022 | Christophe Lagast


As marketers are trying to overcome a chaotic sea of data, originating from various sources within the organization, customer data platforms are here to remedy their data-related headaches.

As the pandemic raged on for another year, digital business boomed in 2021. As a result, we have noticed an increase in demand for customer data platforms (CDPs). Unsurprising, since they agregate data from a variety of sources, drive real-time personalization regardless of the platform, and help you deal with complex privacy regulations.

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A sea of first-party data

Right now, we are experiencing a big shift towards more first-party data. Eliminating third-party solutions from your insights can still feel like a big hurdle to overcome, but eventually this will lead companies towards a better understanding of their customer journey.

Gathering data, unifying it, and analyzing it correctly continues to be a major task for many organizations. Not only do companies run an increasing amount of technologies that capture relevant data, marketers also tend to waste time on manually integrating data and navigating a chaotic sea of data.

This is where a CDP comes in. But what is a CDP exactly?

Customer data platforms in a nutshell

Look up the term CDP on Google and you’ll find the following definition defined by The CDP Institute:

A CDP or customer data platform, is a marketer-managed system designed to collect, clean, and connect data from multiple sources to create a single customer profile. This structured data can then be send to multiple marketing systems.

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A CDP should be capable of doing at least these six things:

  • Ingest data from any source.
  • Capture full detail of ingested data.
  • Store ingested data indefinitely (subject to privacy constraints).
  • Create unified profiles of identified individuals.
  • Share data with any system that needs it.
  • Respond in real time to new data and to profile requests.

Simply put, a CDP is a platform that allows you to store and manage all data about a customer, which is collected from every touchpoint that customer has with your business. The big advantage of this is that you can build an accurate customer profile and have full control over all the data you capture.

One of the many possibilities with a CDP

Let's make it a bit more concrete with an example. Let's say you want to boost your business by increasing the conversion rate of your booking funnel. Simultaneously, you want to upsell to your existing customers via personalised actions and offers.

To do this properly, you’ll have to collect the data from the booking flow on your website and link it with the other first party data you have stored within your organization, like an ERP, or CRM.

The CDP will be able to merge the history of each customer or prospect into a single profile. Based on those previous interactions, you’re able to categorize certain interests or behaviors into specific audiences with which you can match products, services, and promotions.

The same CDP will then allow you to trigger personalized actions and offers on several touchpoints, based on the matching audience.

It’s just one example on how a CDP could help you activate customer data effectively. However, with over a hundred of suppliers on the market, the search for the right solution can be daunting. So how to choose the one that’s right for you?

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Choosing a CDP that suits you

Based on our experience with a wide variety of clients looking for the right CDP for them, we have distilled the search into three crucial questions.

  • What does your technology architecture look like?
  • Do you need support in terms of GDPR and data governance?
  • What do you want to do with the data?

Every CDP has its strengths and weaknesses, but answering the questions above allow you to look for specific capabilities that will lead you to the solution that fits your needs.

What does your technology architecture look like?

The first question kind of speaks for itself: is the technology architecture you’re working with fairly simple or rather very complex? If you are working with commonly used and established technologies, you probably won’t need a CDP with a set list of +150 APIs to connect it with a plethora of exotic tools and programs.

On the other hand, if the architecture of your organization is quite complex, with lots of existing technologies and tailor-made solutions, you might want a CDP that’s easily integrated. These CDPs typically have many ready-to-use APIs, which often also offers the advantage of connecting with technologies you’ll introduce at a later point as well.

Do we need support in terms of GDPR and data governance?

Even though privacy is top of mind at the moment, and there’s a large sense of urgency for companies to comply to regulations like GDPR, many businesses are still struggling on this front. It’s no easy task to transform your organization and marketing activities according to the ever-evolving privacy standards of today and tomorrow.

There are many ways to approach this. One way could be to collect less data. A difficult choice, since you need a minimum of relevant data to offer your customers the personalized treatment they’ve come to expect both online and offline.

The alternative is to develop a processes that manages the data in a GDPR-compliant way. While you could opt for a complex custom-built solution, or even outsource the issue entirely, you might as well leverage the capabilities of a CDP for the task. The core function of such a platform is to collect and link all data related to an individual, that's exactly what you need to manage your data in a GDPR-compliant way.

What do you want to do with the data?

In the end, everything comes down to what your plans are with the data you’ll collect in your CDP. There are a wide variety of options: should it be sent to your BI-team, for example? Or do you want to use the CDP like a marketing automation tool. A CDP can let you blend data, set up segments, and connect to your publishing and advertising tools. Long story short: there are a lot of use cases for a CDP. Depending on these capabilities, you might prefer certain solutions over others. In the end, it’s what you want to achieve with the tool that dictates what it should be able to do.

With these questions answered and a budget in mind you, you can start a more focused search for the right CDP for your business.

A partner in your search for a CDP?

At The Reference, we remain platform-agnostic to offer our clients the right solutions for their business needs. If you are looking for a partner in your search for the right CDP, feel free to reach out.

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