The Relevancy of Customer Data Platforms

Steve Zisk | August 21, 2018

I love a good story, and the rise of the Customer Data Platform (CDP) has offered many good stories over the last 18 months. But I think it’s worthwhile to spend some time (and ink) going behind the story to look at why CDPs have become such a heady topic, and to work to understand how they fit into a marketer’s “bag of tricks,” the marketing technology stack.

The Relevancy Group recently conducted a research evaluation of CDPs that covers both marketers’ needs and various solutions’ capabilities. RedPoint Global was happy to participate as a CDP solution provider, and we just announced the publication of the report. My colleague, Patrick Tripp, described our reaction, saying “Client satisfaction is of paramount importance at RedPoint Global and it’s thrilling to see The Relevancy Group’s research reflect the enduring commitment to our customers’ success.”

I heartily recommend taking a look at the Marketing Quarterly Magazine, published by the Relevancy Group, as an insight into how they think about marketing technology. The current issue covers the CDP buyer’s guide report as well as many case studies written from the marketer’s point of view.

I would like to extend what Patrick says about customer success, and help you examine some choices about what belongs in a CDP and what might work best in other parts of the martech stack. As many of us here at RedPoint Global have said about CDPs, “It’s about data, more data, and how the data can be used by the marketer.”

What Does the Marketer Need?

Let’s start with a look at marketers’ needs. In its report, The Relevancy Group found that 50% of marketers are using a CDP to help manage and leverage their customer data. This statistic has two interesting (and in some sense opposed) nuggets of information in it. First, half of marketers are not using a CDP at all. This is not too surprising, since CDPs are relatively new in the marketing ecosystem, and the hype surrounding them can be confusing for the buyer.

Second, if we zero in on the 50% who use a CDP by looking at marketers’ current and expected benefits from adopting CDPs, we find a broad sweep of benefits, from more powerful queries on customer data to better access and personalization to better security and control. This matches evidence from other analyst reports, marketing industry articles on CDP, and information from David Raab’s CDP Institute: Marketers expect a lot from CDPs and may expect very different capabilities, depending on what they know about CDPs! This, again, represents some confusion and hype about CDPs, but it also shows the centrality of customer data for the core mission of marketers: Improve customer engagement across marketing touchpoints in measurable and repeatable ways.

If we want to cut through the confusion, we should try to understand the most important and central capabilities of a CDP. The Relevancy Group defines Customer Data Platforms as “data management solutions specifically designed for marketers that enable a view of the customer that is Holistic, Integrated, and Persistent… A CDP gives the marketing team full mastery of data usage, control, and security.”

What this means is a CDP must provide the customer data itself as well as some incredibly important capabilities to build, handle, and share that data on behalf of marketers as well as others in an enterprise that might need a source of accurate, up-to-date information about customers.

But why is this so important? Marketers have been handling customer data, creating campaigns, engaging with customers, and measuring results for a long time. What does a CDP add, and how can a marketer balance this with all the other competing technologies and processes that must be managed every day to achieve good results?

A Customer Data Platform is a Single Point of Control

The core difference a CDP offers is a single point of control, providing a real-time, up-to-date and accurate source of customer information under the control of the marketer. This single central source of customer “golden records” unifies data across typically siloed internal and external sources, and handles data of every conceivable type, cadence, and source. This is radically different from other data sources and elements in the martech stack, which are usually channel-specific and narrowly focused, and often are batch-driven or at least much slower to update than the customers’ journeys and actions.

The Relevancy Group’s description of CDP capabilities matches RedPoint Global’s position in this way and in several others. For instance, RedPoint believes a CDP should be operated by and for marketers, but that the details of customer data integration, control, and security require a team effort. The Relevancy Group agrees, saying “specific marketing tech/ops resources are required for most organizations to implement, manage, and make best overall use of a CDP. These resources generally partner with members of the marketing department (49%) and corporate IT (49%) to manage the CDP.” I would extend this expectation with a caution: If you try to manage the entire data integration process for your CDP inside the marketing team (without that critical IT involvement), you will risk missing important data, getting inaccurate results, or violating your organization’s (and your customers’) requirements for compliance, privacy, and security.

The idea that a CDP requires no time or resources to set up is really a reflection of marketers’ desire to be nimble in implementing and changing the martech stack. Quick setup and easy change are important goals, but should be treated as explicit and measurable requirements in evaluating solutions and working with IT or service partners, rather than being part of a risky bet on do-it-yourself.

The Relevancy Group published a “Relevancy Ring” as part of the report, and this includes a scorecard for comparing solutions. RedPoint Global did well in the scorecard (and in other parts of the evaluation), but what we found especially significant was that the Relevancy Group focused on the core capabilities of a CDP, measuring vendors on elements that “encapsulate 2018 marketer aspirations, challenges and themes… Integrated Customer View; Data Matching, Mapping, and Hygiene; [and] Measurement.” These three elements put the emphasis squarely on the data, and on its immediate management and availability. The report recognizes other requirements expressed by marketers and capabilities described by vendors, but the authors rightly recognize that customer data itself is the Sine Qua Non of a Customer Data Platform.

CDPs and Broader Martech Functions

When marketers hope to use the CDP for analytics, decision management, and message activation across channels. they are striving for agility, simplicity, and control. This aspiration makes sense – many previous martech offerings have been found to be complex, inelegant, and incomplete – but martech buyers should beware of “complete, end-to-end” CDPs that may impede flexibility and agility by prescribing a simple but inflexible solution for marketing analytics, decision management (including predictive analytics and machine learning), and campaign or journey management.

In RedPoint Global’s experience, the martech buyer is better served by explicitly surfacing requirements and priorities in these areas and assessing whether a vendor’s solution meets those needs with room for growth and change. An enterprise CDP will almost always be able to integrate easily to other parts of the martech stack, so it can infuse the decision making, analytics, and orchestration components with complete, up-to-date customer data.

With CDPs, as with other martech components, marketers must see past the hype, learn what CDPs can and cannot do well, and match CDP capabilities against market goals, both current and aspirational. Just as some marketing clouds take a walled-garden approach that sometimes hinders marketing innovation, selecting the wrong type of CDP will likewise hinder innovation. This is an opportunity though to select the right CDP, to serve as an appropriate capability to use in conjunction with other technologies to make customer engagement more rewarding for both the customer and the marketer.

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Steve Zisk
Steve Zisk

Steve Zisk is a seasoned technology professional with more than 35 years of expertise in software engineering and product marketing. As senior product marketing manager at RedPoint Global, Steve is tasked with developing messaging and marketplace positioning for RedPoint’s customer engagement platforms. Connect with Steve on LinkedIn and Twitter.