CDP: The purpose and evaluation

A CDP, or customer data platform, has long played a central role in the modern retail marketer’s tech stack. If you want to really understand your customers to serve them with content that resonates, you’ll need to pull data from multiple sources into one centralised hub to get that real time snapshot into your customer’s activities and preferences. This then informs your marketing and is, in essence, the role of a marketer’s CDP.

If you’re thinking that sounds great, why is it no longer important? Then I’m here to tell you it is, but like everything in life, the CDP has evolved and for a worthy cause.

If your aim as a retail marketer is to create best-in-class customer experiences that truly resonate, then a standalone CDP is no longer enough. A traditional CDP meant you had to integrate with your marketing execution platform to pass the data into an orchestration platform, like an ESP, before you launched your marketing comms. This is no longer the case. Fusing together a CDP with a marketing experience platform (a CDXP) allows brands to create and deliver next-level customer experiences at speed and at scale. No data push and pull. 

To CDP or CDXP?

CDPs still exist. But for retail marketers, they may not be the right approach. Let’s examine some of the reasons why. 

1. Your goal is to create best-in-class customer experiences, not a database

To create a compelling customer experience, you need to understand each customer. That means bringing together every single data point you have on them, and connecting that into a customer data infrastructure. This had led to marketers choosing a standalone CDP with multiple integrations pulling in data. 

But all that means is you’ve now got a hefty store of data with varying degrees of relevance and it may not be necessary to collect all of those data points. Which begs the question; what is your end goal for the data? Assuming your answer is to create actions off the back of your customer data, with a CDP, you have to sift through data points to find specific insights about those customers you can take action on.

2. Most CDPs are not built with retail or marketers in mind

Retail marketers have very specific needs for their marketing platforms that are unlike marketers in other industries. They generally require a wider selection of channels, a wider range of products and product ranges as well as ease of execution for scenarios like cart abandonment campaigns, replenishment campaigns and broadcast campaigns based on category affinity. 

The problem most CDPs have is that they are not built with ease of marketing execution in mind and creating complex journeys built on these insights will require engineering to drive marketing outcomes for marketers. 

Extracting actionable insights while making custom configurations to increase ease of use both take time and result in decreases within operational efficiency while increasing CAC. 

What’s more, Gartner® found that “marketers with a CDP deploy 2.3 CDP vendors, on average. This indicates a likelihood that marketers rely on multiple vendors to support complex use cases, and that there is still confusion around CDP capabilities.”

This suggests that many marketers are struggling to find a CDP that suits their specific needs, and are looking to stitch together multiple suppliers to create a complex tech stack. This further drives up the costs that marketers face. 

3. You could create a disconnect between your CDP and marketing platforms

If your goal is to create better customer experiences, you’ll need to have customer data accessible within your marketing platform to not only trigger automated campaigns with a click, but to segment your customer base and tailor customer journeys to individuals.

Having a CDP that is separate from your marketing platforms fosters a disconnect between the different platforms which makes building the customer journeys required nearly impossible. 

How?

Let’s imagine that you want to build out a simple retail use case such as a basket abandonment campaign. If you have a separate CDP, this will involve creating a filter within your CDP to create an audience (if your CDP is not retail-specific this will be particularly complex). Once you have your audience down, you’ll then need to sync this audience into your marketing platforms to execute the campaign.

From there you would create your audience that get hits when certain conditions occur within your CDP. 

By this stage, you have no data within the marketing platform to sub-segment the campaign and send different versions of the campaigns based on their history, tastes or interests. 

True personalization becomes impossible, as does agility. For marketers today doing more with less (groan), efficiency is everything.

4. You may need a separate platform to manage all of your channels

Having a CDP separate from your marketing channels means that you need some sort of orchestration capability to bridge the gap. The modern customer journey involves multiple channels, which all need to work in harmony to create the best possible experiences.

This requires coordinating which combination of channels are used for different use cases, as well as the specific order that different messages are deployed. All of this on top of balancing the quantity of communications sent so that customers are not overwhelmed.

For CDPs that aren’t built for retail, any degree of orchestration they have is often built for different use cases in different industries. For more complex orchestration, another separate platform, such as an email service provider (ESP) or marketing cloud, is required to work across the various channels you use, with marketers having to dip in and out of each platform. All of this creates a disconnect in experience. 

5. A Customer Data and Experience Platform unites the CDP with the marketing experience capabilities

The good news is that retailers don’t have to choose a CDP set up that may be sub-optimal now that the customer data and experience platform (CDXP) exists. A CDXP combines the customer data capabilities of a CDP with the cross-channel orchestration capabilities of an ESP or marketing cloud. 

These platforms give marketers the ability to easily use customer data to personalize the customer experience across every marketing channel. Retailers can get campaigns to market quicker while optimizing CRM revenue all within one platform.

In practical terms this means that the relevant data is at the marketer’s fingertips when they look to build out different customer journeys. Segments are easy to build and then action. With central control of both the data and the marketing channels, as well as how different channels interact, retailers should be better positioned to deliver relevant, personalized experiences for their customers with a CDXP. 

Not sure about next steps?

Having a separate CDP might be the right solution for your business. But if you’re struggling to bridge the gap between data and executing customer experience in a way that differentiates your brand, you may want to consider an alternative. 

If you’re not sure about the best combination of technologies for your business, or you want to find out more about different options, you can take a look at the CDXP Buyer’s Guide which takes you through different marketing tech-stacks and even offers an RFP-style checklist to make your life easier during evaluation.