Choosing the Right CDP For You

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The development and evolution of Customer Data Platforms (CDPs) in the last few years has generated a lot of attention from marketers.
INTRODUCTION

The development and evolution of Customer Data Platforms (CDPs) in the last few years has generated a lot of attention from marketers. With the capability to bring customer data in from multiple sources, unify it, and package it for actionable, real-time use, a CDP should be an integral part of your marketing strategy.

But once you’ve recognized your company’s need for a CDP, how do you go about choosing the best one to meet your needs? There are literally hundreds of CDP vendors, and several different types of CDPs to choose from, not to mention data solutions that claim to have “CDP-like” capabilities but aren’t technically CDPs. It’s a lot to sort through! In this article, we’ll break down what is (and isn’t) a CDP, the different functions of each type of CDP, and where the big-name companies are headed with their CDP solutions.

WHAT IS A CDP?

Many people think of a CDP as data storage software, or maybe an upgraded DMP or CRM. But in order to qualify as a “Real CDP” according to the CDP Institute (1) it must create a customer database that is persistent and unified, and be accessible to other systems. Some DMPs or tagging software have tried to capitalize on the current hype.

TYPES OF CDP

Because CDPs evolved from other technology, their capabilities have increased over time, leading to different types of CDPs. These types are tiered, meaning each subsequent type includes the capabilities of all the preceding types, as well as additional features. 

DATA CDP

Sometimes referred to as an “access” CDP, this is the most basic type of CDP. It provides a means to store and unify customer data, and a way to access that data. A data CDP can link customer data from an anonymous source with a specific customer identity, and format data for access by other systems, but nothing further than that. 

ANALYTICS CDP

In addition to assembling data, an analytics CDP provides analytical applications for your customer data. It can segment customer data and often works in conjunction with a Marketing Automation Platform to automate the distribution of segment lists. Their capabilities can also extend to predictive modeling, revenue attribution and journey mapping.

CAMPAIGN CDP

A campaign CDP shares the qualities of an analytics CDP, but goes further by allowing the CDP to specify different treatments for different individuals within a segment. This enables customized marketing campaigns from the CDP, including personalized messages, real-time interactions and tailored recommendations. Many campaign CDPs are capable of directing omni-channel customer treatment.

DELIVERY CDP

With a delivery CDP, you can take your data assembly, analytics, and customer treatment further to enable actual delivery of messages. This can be through email, Web site, CRM, or a combination of these. Many of the CDPs in this category started as delivery systems and added CDP capabilities.

WHAT IS AN OPERATIONAL CDP?

The CDP Institute defines operational CDPs as “Primary customer-facing systems that include CDP capabilities.” What this means in practical terms is that in recent years, operational vendors such as Salesforce, Adobe, Oracle and others have anticipated the direction the market was heading, and invested resources into developing or acquiring CDP software to interact with their existing offerings. 

You might find operational CDPs categorized as campaign or delivery CDPs, since they include the capabilities of those types of CDPs, however, they also offer operational integration at a level that is impossible with independent CDPs. As far back as 2019, David Raab, founder of the CDP Institute, said that vendors of operational systems would be motivated to add CDP offerings to their capabilities, because, “It’s just going to be something to add on to an existing product that’s not that hard to add on to.” (3) Since then, his prediction has proven true. In other words, all the other pieces for an operational CDP were in place, and creating a CDP to interface was a logical next step.

We’ve seen this happening over the last few years with Adobe, Segment, Salesforce and others taking steps to acquire existing CDPs or filling in gaps in their offerings to be able to develop their own CDPs that work with their existing operational software. Salesforce especially has been on an acquisition drive since 2016 (4), with many valuable acquisitions making the Salesforce CDP one of the best contenders on the market. Salesforce already had CDPlike capabilities since 2018, with Datorama and Tableau offering analytics, Krux for data management, Salesforce Journey Builder and Interaction Studio for customer journey mapping, and most recently Evergage, a built-to-purpose CDP acquired in 2020. Since then, Salesforce has focused on making sure they have the software to meet each use case, acquiring MuleSoft to enable custom integrations through APIs, and Einstein to make the whole process easier with machine learning. In short, as an operational CDP, Salesforce provides the most usable solution, especially for existing customers.

WHICH CDP IS BEST FOR YOU?

Clearly, not all CDPs are created equal. The overarching consideration should be gaining access to the most quality data possible, and having a means to use that data effectively. The ultimate goal for a CDP is to develop a single, 360-degree view of the customer, with all their relevant data being unified and available. This single view of the customer is only as worthwhile as it is comprehensive and actionable. Therefore, a CDP’s effectiveness hinges on the number of quality data sources it draws on, and the available execution integrations. According to one blog, “You want to have the broadest possible base of data, along with the broadest ecosystem to put that data to work.” (6) While a less advanced CDP might meet your current needs, it’s important to consider where the growth of your company may take you. Certainly an operational CDP, which can seamlessly integrate with sales clouds, customer clouds and more, will prevent costly and potentially confusing upgrades in the future.

CONCLUSION 

With CDP offerings growing at an unprecedented rate, it’s no surprise that there’s confusion about what qualifies as a real CDP, and what different types of CDPs are available. In order to choose the CDP that best meets your needs, it’s important to understand what different CDPs can and can’t do, and to consider the value of an operational CDP that can incorporate all the capabilities of the most advanced CDPs, while interfacing with existing software applications in order to draw on and execute the best data possible.

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