How to get the most from a Customer Data Platform in an increasingly diverse market
Competitive markets mean customers’ expectations are forever rising, and brands must find a way to meet these expectations or risk becoming irrelevant. As such, a complete understanding of the customer has never been more important. While we’ve seen the value of first-party data increase, concerns around privacy have escalated. And here is where Customer Data Platforms (CDPs) come in: they promise to be a tool that helps marketers manage data safely.
A CDP is a marketing platform that creates a persistent, unified customer database, i.e. it draws in data, especially first-party data, from many different sources and creates a single customer profile. That profile is then accessible to other marketing systems. But has the industry overreached? What began as small specialised operations quickly attracted the big players in digital marketing, data management and enterprise software. Are some vendors guilty of “pursuing the new acronym” rather than delivering the core functionality that CDPs set out to provide?
The real promise of a CDP is deeply rooted in data and identity – an absolute specialism, rather than a broad generalism across the value chain. But have marketers been sold a product that fails to truly understand their organisation, its readiness and its unique needs?
Where did CDPs go wrong and how can we fix that?
A 2020 “State of the CDP” report indicates that almost 60% of brands who own a CDP are considering switching vendors within the next year1. This signals disappointment and disillusionment. In a category with such promise, it’s a shame that the industry has not done better. But all is not lost. CDPs have a critical role to play in the marketing ecosystem when considered and approached correctly.
Acceleration’s Course Correction report examines the issues and offers advice on how marketers should approach a CDP; how they can embrace the functionality offered to improve customer experience; and how they can ultimately drive competitive advantage for their business.
The starting point is a perceptual shift towards building an internal competence termed a “Customer Data Capability”, rather than thinking about a Customer Data Platform as a solution in its own right.
Key takeaways from the Course Correction report
- There is a critical role for the CDP, but only when applied as a deep specialism, rather than a broad generalism. A CDP should add unique value that complements and connects the ecosystem, rather than disrupting or displacing elements of it.
- Marketers should shift their thinking towards building an internal Customer Data Capability rather than simply selecting and implementing a product. By themselves, products create parity, but it’s capability that delivers competitive advantage.
- Building an internal Customer Data Capability is hard. It’s invasive and disruptive. But this is what true transformation demands. Not all organisations will have the appetite or resolve to deliver one, so this is where the opportunity lies.
28 July 2020
More in Technology & data
The human side of brand growth
Consider the importance of listening to people’s stories before you tell your own
The future of retail formats: pop-ups, pick-ups and unmanned stores
Which retail formats work best for your brand’s experience strategy and what value do they add?
Unlocking the power of online fashion with new technology
How retailers can use tech to remain relevant after COVID-19